As property managers and homeowners rally to promote direct bookings and build OTA independence, so too are the vacation rental industry’s comrades in the battle: hotels. Triptease, a direct booking software provider for hotel accommodations, is one of the key players in the hotel #BookDirect movement. The company’s Direct Booking Summit last fall provided an inside look at the hotel industry’s perspective on OTA independence, which revealed some similarities and some striking differences from that of vacation rentals.
Generally speaking, the summit made clear that third parties are here to stay for hotels, and hoteliers largely accept them as a standard and necessary part of their marketing mix – a “necessary evil,” as many of them said. Hoteliers also acknowledged that direct bookings may not always be the best bookings. Many are willing to let some OTA guests continue to book through third-party sites as they weigh the costs of OTA commissions against the primary and secondary costs of direct bookings, including websites and booking engines, staff salaries, and others.
Still, direct bookings are important to hotels, and at the summit, they looked at driving more direct bookings through four main lenses:
- Looking at data in different segmentations and with better visualization
- Removing the silos that keep data and knowledge from being shared between marketing, sales, revenue management, operations, and other departments
- Leveraging their strength in local, expert content on their properties and destinations
- Focusing ever more closely on guest experience and customer service to compete with third-party channels and win repeat guests
Ahead of 2019’s #BookDirect Guest Education Day on February 6, VRM Intel spoke with Lily McIlwain, Triptease’s head of content, to dive deeper into the direct booking movement from the hotel industry’s point of view.
What is the current state of the hotel industry in direct booking?
Lily McIlwain: The hotel industry is in a very different space to where it was a couple of years ago. Many hoteliers are actively pursuing book direct strategies like managing their parity, introducing exclusive offers, and optimizing their websites to ensure booking direct is an attractive proposition for potential guests.
Many hotels still see their commissions to online travel agencies (OTAs) growing every year, squeezing their budgets and making it more difficult to spend time and money on the guest experience. OTAs have vast data scale, which makes it hard for hotels to compete when it comes to acquiring and converting their high-value guests. The direct booking movement has come a long way, but for many hotels, there is still further to go until they reach their optimal business mix.
Is there an industry standard ratio of direct to indirect bookings that Triptease recommends? How can hotels increase their direct booking percentage?
LM: The optimal business mix will be different for every hotel. The most sophisticated hotels are analyzing their channels to see how guest type and value varies across them, then tweaking their channel mix accordingly. There is an in-depth webinar on this topic available on the Triptease website. This type of analysis should be ongoing across different periods. As a general rule of thumb, OTAs should be used to reach and convert guests that a hotel would never be able to convert themselves – e.g. in a geographic area that they don’t market to. An unhelpful OTA balance is one where OTAs are cannibalizing bookings that hotels could convert themselves. For example, previous guests.
Where are hotels getting stronger with direct booking and where are there still challenges?
LM: Hotels are increasingly aware of the need for parity management and ensuring that they always have the most compelling rate for guests. Many are investing in tools like Triptease’s parity management software to track their disparities and rectify them on their OTAs. However, a major challenge in maintaining parity comes from the practice of OTAs (often smaller sites without partnerships with the hotels whose rooms they sell) buying wholesale rates and selling them onto guests without the knowledge or consent of the hotel. This means hotels are often undercut significantly online, which is a particular issue on metasearch engines where guests are primarily making comparisons based on price. A major challenge for 2019 will be for hoteliers to regain control of their downstream distribution.
What is the outlook for 2019? What is Triptease keeping an eye on or looking forward to?
LM: Metasearch is going to be a major focus for many hotels in 2019. Google is investing heavily in its metasearch option, which means there is an increased opportunity for hotels to reach guests when they’re just beginning to plan their trip. The best hotels will expand their book direct strategy to include metasearch advertising and invest in solutions that allow them to provide a full-funnel direct booking experience to high-value guests. Hotels must align their on-site conversion efforts with their top-of-funnel acquisition strategy if they are going to win back bookings from OTAs. At Triptease, we’re looking forward to our three Direct Booking Summit events in Singapore, Paris, and Miami where we’ll be bringing the hotel industry together to discuss strategies, compare case studies, and push the direct booking movement forward.
For more on metasearch, check out Triptease’s recently-launched Hotel Metasearch Handbook.
Read more about Direct Booking Summit insights: Are Hotels Obsessed with Direct Bookings?