“One would think that given all of the industry attention on direct booking, there would be a more uniform way of looking at what it actually is. The most obvious type of purchase that all hotels clearly count as direct is the booking that occurs on the brand.com website or app where there is no third party involved in facilitating the transaction.” (Skift, May 2017)
Yes, after so many years of debating the booking issue—an argument that has resulted in the “direct booking wars,” a phrase even consumers now recognize—we should all be agreeing about the definition of a direct booking. However, we are still far from a robust (or profitable) understanding of website direct bookings. Out of the many myths about direct bookings, let’s break down a few.
Big Myth #1:
A direct booking is a website booking.
Direct bookings existed long before OTAs came along, even before websites existed. While they include bookings on brand.com, the most obvious direct booking is the one that happens when a guest either dials those ten digits or uses click-to-call to reach a reservations agent. Aside from old-fashioned walk-ins, phone calls are the oldest form of direct booking, and contrary to popular belief, they still matter—quite a lot.
While supplier websites yielded 27 percent of bookings in 2015, calls to hotels were at a valuable 17 percent (much higher for private accommodations). Combined with bookings at the property and metasearches, non-brand.com direct bookings were 31 percent of all bookings, outpacing website bookings (U.S. Consumer Travel Report Eighth Edition, Phocuswright, 2016). We can debate the inclusion of metasearch as a direct booking; however, we’re inclined to include it because it’s closely related to pay-per-click or click-to-call.
While we can argue about what to consider as direct bookings, the category comprises far more than brand.com. Imagine what these percentages might be if we cast the direct booking net wider than just websites and included those third-party numbers?
Big Myth #2:
Online bookings are profit engines; everything else is a profit drain.
This might be true if the guest went straight to your website and booked without ever seeing your property via Google pay-per-click or on a metasearch site or an OTA—or without a quick phone call to verify something about the property, which happens 71 percent of the time, according to HomeAway. These views have a price, but few properties are tracking the full path to purchase and attributing their earnings appropriately. Most managers just assume that, if the booking came through the website, it had some vague website marketing costs attached to it but that it’s cheaper than an OTA or paying the overhead on a reservations agent. Not true. Every online booking has costs attached, and understanding those costs is essential to understanding how to spend dollars on visibility and training. NAVIS tracks the entire path to purchase so managers can trace exactly how many dollars were spent and which dollars spent were most profitable.
Regarding direct booking via a website or the voice channel, note that:
Direct bookings via phone have a higher value, generating $3 for every $1 generated online.
Reservations agents convert at an impressive 42.5 percent when they are properly trained in the art of sales.
Agents can add another 10 percent to that if they are trained to handle outbound calls in their downtime.
Not performing at these levels means you’re losing significant revenue every day.
Big Myth #3:
If you build a website, direct bookings will come.
Here is the notion about direct bookings that can be their biggest drawback. A website neither creates nor converts demand. Desktop and mobile websites can be frequent parts of today’s complicated path to purchase; however, as Google notes, to “earn (and re-earn) each person’s consideration . . . you’ll need to do more than just show up” (Think with Google, July 2016).
Capturing and converting guests requires giving them all the information and tools they need across all available channels and devices, including voice. Expedia’s The American Traveler’s Path to Purchase notes that travelers use online resources 20 times per week in the 45 days prior to booking and, on average, three resource types. Notably, these resources are both online and off-line. Think of the path to purchase as a zigzag from online to off-line and back. Keeping travelers on the channels you own, rather than letting them wander off to OTAs or metasearch sites, is essential. If you prominently include a clickable phone number and chat options on your mobile website, you can steer customers toward your most profitable voice channel.
Looking clearly at direct bookings opens up more opportunities. As a hotel or vacation rental owner, when you embrace the off-line channel and tune in to the evolving habits of travelers, you can increase demand as well as increase conversions with your existing demand.
Get downloadable worksheets, webinar recordings, and e-books on this topic and on the latest vacation rental industry trends at Learn.TheNavisway.com.