One of the main reasons establishments choose to work with us is to drive their own brand online and to get more direct bookings. We achieve this together with our clients once they are committed to put the direct booking strategy at the heart of their entire business strategy.
Our comprehensive approach to this strategy, including our own proprietary booking engine, brand development, digital marketing, web design and distribution management, ensures that all these elements of an establishment’s online marketing strategy form a cohesive system.
Travel is now a commodity with no room for brands to portray their unique experience they offer. OTAs have largely commoditised travel into location and price, with little opportunity for establishments to project or control their brand. Unable to pitch their uniqueness on OTAs, establishments are forced to compete on price only and their own website prices also continue to fall, further eating into already tight margins after the deduction of commission. It is however only the perception of intangible benefits of your brand that can put you back into control of your pricing strategy.
Today, most establishments are over-reliant on online travel agencies (OTAs). The difference between OTA commission and your direct costs, for a typical booking, can be substantial. Suppose your typical booking is a two night stay at R1,600. Then a direct booking can easily save you R280 in commission compared to the same booking via an OTA. If you can influence just one guest every day to book directly, you will be saving over R100,000 over the period of one year, which you can reinvest in your direct booking strategy and other areas of your business to further enhance the overall guest experience.
The key benefit of a direct booking strategy however is, that you will "own" your customers. The reason why online distribution via OTA’s can be a threat to your business is that establishments do not realize the danger of losing control of customer ownership.
Just because a customer stayed at your establishment does not mean it is your customer. For the online customer, the OTA presents a compelling option with great choice and good pricing. When a customer books on an OTA and then gets great service at the hotel, they are on the whole pleased with the OTA as much as with the establishment. If the booking process was convenient and efficient, customers will most likely return for their next booking to that very same process (to the OTA), which they already know and have confidence in, confidence that you as the establishment have helped to built.
Even if you obtain the guest’s details at check-in, you cannot match the data and tracking the OTA has already gathered. As an establishment, your chance to influence an OTA guest, to reward them or to encourage repeat bookings is slim. OTA’s are consistently better at remarketing than the average establishment. Guests who book your establishment indirectly are targeted on many occasions by the OTA following their visit with incentives to stay in other properties, most likely your competitors, for even better deals. The pitch on price is relentless and OTAs encourage loyalty to their brand, not to any one specific establishment.
If customers are already familiar with your property/brand, then their direct booking is an endorsement of what this stands for. If they are booking as a result of a marketing campaign of yours, then you are definitely doing something right. If they are booking because their online search has led them to your website and your content has convinced them, then your digital strategy is working positively. All of these reasons point to the guest’s mindset being under your influence, and on this you can build.
For the direct guest, you are in control once they are on your website. With pre-stay contact, and everything you do from arrival onwards, you can work towards demonstrating the positive link between brand and price that ultimately enables you to hold your rates in a competitive environment. You are in control of the future customer relationship and have an open line of communication with your guest from enquiry stage through to repeat booking and referrals. You can built brand distinction and charge for the difference and have the possibility of creating brand ambassadors on social media to further encourage more direct booking referrals.
Your own distribution policy probably means that all your distribution partners take your rooms, and your best pricing, and then use this to compete against you for your own direct guest on the search results right alongside your hotel. In many cases, they will do a better job at attracting that guest in (and charge you for doing so). It’s like you’re encouraging multiple hands to go up when your name is called out, instead of just allowing yours. Your strongest chance of seizing customer ownership is already jeopardised and you are allowing it to happen. The irony of distribution is that while you widen your exposure, you also actively compete with yourself online (and often lose) and threaten this direct customer relationship.
OTA’s are not only a threat when it comes to online distribution, they also constantly come up with more creative ways of benefiting from your own marketing efforts, for example by providing "free" certificates in form of widgets establishments are overly eager to place on their own websites, not realizing the threat to their own business.
OTAs have also begun to offer "free" booking calendars and buttons for establishments, which on the face of it may look like a pretty good deal, but are more like a Trojan horse. All these "free tools" allow OTA’s to collect customer data and customer tracking from right under your nose on your own website and in doing so can profile your guest and offer much more targeted alternatives. While the zero cost may look attractive, the real cost is coming down the line in lost data.
The focus on direct bookings is usually argued with the need or desire to reduce commissions, to increase your margin, and to increase gross profit. While these are all critical and important issues, they are not the only benefits of that focus. The advantage of building direct bookings lies in the guest data you are gathering and in the relationships you are fostering and ultimately in the client base you are building for your business.
Are you taking advantage of these major opportunities to build your establishment’s client base and to capitalise on it? If not, these lost opportunities directly affect your bottom line and thus the value of your business. It is the regaining of the customer ownership that is key; and it is customer ownership and what you do with it that will ensure growth and sustainability of your business.