Are you ready to take back your business from the online travel agents?
As an industry, hotels have failed to keep their business in house. Too much inventory is being given away to OTAs. This is not the fault of the OTAs – it is the complacency of the hotel industry.
Michael Schäffner is leading a roundtable discussion called, “Take back your business – boost direct with true personalization” at the HSMAI Revenue Optimisation Conference (ROC) in Amsterdam on 10 April, 2018.
Too many hotels are giving recurring business to the OTAs. That should not be the case. OTAs have their place, but it is not for facilitating repeat bookings. Once a guest has stayed in your property or with your brand or collection they should not be booking via Expedia or Booking.com again. OTAs should be used as a door opener – and for smaller chains and independents they can do a great job at promoting your properties to a global audience. But after that, hotels should be taking action to win back their business and get the guest booking direct.
How do hotels compete?
Priceline Group and Expedia have overtaken the biggest hotel groups in terms of global reach and advertising spend.
Priceline plunged even more money into advertising Booking.com in 2017. By the end of the year, the OTA was running TV advertising campaigns in 30 countries, up from 12 the year prior. The end result of the increased marketing spend was that Priceline saw a 19% increase in Q3 2017 room nights, at 178 million. Expedia put in similar investment. According to Statista, the OTA spent $5.3 billion dollars on sales and marketing in 2017.
How can hotels compete with that?
The hotel industry has not kept pace. There has been a:
- Lack of innovation
- Lack of efficiencies
- Lack of loyalty
And if we let this continue the gap between your OTA derived business and your direct bookings will only continue to grow. What’s more, as the millennial generation comes through to become the largest travel consumer market, the need to innovate and communicate with this new traveller is even more important. We can’t keep doing things the same way and expect better results.
I’m not a big fan of the term ‘loyalty programme’. These work for the big names. For example, Marriott Rewards and the Starwood Preferred Guest programmes combined have millions of members, collecting points to use in a portfolio of more than 6,000 properties in more than a hundred countries around the world. This makes sense if you have thousands of properties, but if you are a small, boutique brand with 15 hotels, there is less incentive to collect points to redeem at your properties.
Instead, hotels need to look at personalisation and instant benefits and perks.
Tailored, personalised offers will do more to attract your guest than a piece of plastic pre-loaded with points. For example, if I travel with my family, a room that comes equipped with baby amenities would be much appreciated. On the other hand, if I am travelling on business I want high-speed Internet. It’s about knowing the guest and knowing their reason for travel.
Harness the power of 1-2-1
Successful hotels do one thing well – they delight the guest. The importance of a 1-2-1 interaction cannot be undervalued. If you have the tools or people to make the stay memorable, that is what the hotel business is about.
However, as the world becomes more digital, we have to transform that 1-2-1 interaction into the ecommerce landscape. By personalising your online offer, your means of communicating with your guest, even the language you use, you can increase conversion rate, guest satisfaction and total spend from the client.
Hotels own the guest data. We should know what buttons to push to help consumers convert on our sites and book direct.
It’s about knowing the guest’s requirements and not just offering everyone the same package. Know their persona, their stay habits, and you will know what to offer them to get them to convert.
In order to build out a persona for each guest, you need to have the IT landscape to facilitate this. Hotels need to be operating on open and agnostic platforms, where all systems can talk to each other, and everything feeds into one database that owns the customer information. This is the precondition for successful ecommerce.
Know your customer. Personalise your offers. And stop giving repeat business to the OTAs.
Michael Schäffner and the Duetto team will be at the HSMAI ROC conference. Meet with him to find out how Duetto’s Revenue Strategy Platform can help you drive more direct bookings through personalisation. Click here to arrange a meeting.