Hotels today are constantly trying to find new hotel incentives and programs to drive direct bookings from customers and become less dependent on online travel agencies (OTAs). Ah OTAs, can’t live with them, can’t do business without them. On the one hand, OTAs have massive marketing budgets that allow them to rank at the top of every hotel search and entering a partnership with them means your hotel will achieve a reach that they most likely would not be able to alone. But the cost of doing business comes at an arm and a leg to hotels as the OTAs take a decent chunk of commission from those bookings.
When a customer books directly, they cut out the middle man, in this case - the OTA, making the cost to acquire much lower, the revenue share higher, and thus increasing the bottom line. Customers that book directly also creates an opportunity for the hotel to build a more personal relationship with that customer and be able to communicate directly with the client to ensure a seamless experience. We’ve all been there before - being tossed back and forth from the OTA to the hotel when it comes to simple things like changes in the itinerary, it is inefficient, and when things slip through the cracks, OTAs and hotels run around in circles playing the blame game.
Because of this tug-of-war, hotels are constantly looking to develop strategies to increase direct bookings and wein off their reliance on OTA bookings. We’ll take a look at top hotel incentives to drive direct bookings at your hotel.
What is a direct booking?
When a traveler is looking to book a hotel at a specific destination, they will most likely enter the destination name followed by the word “hotel” into the search engine. The top 5-10 suggested links are typically OTAs like Expedia.com, Booking,com, Agoda, Hotels.com etc. Typical customer purchasing behaviour dictates that a consumer will research the best location that fits their needs based on pre-chosen criteria, at the best price. By clicking on an OTA, they can view multiple properties at once and compare based on that criteria they’ve set. When it comes time to book and pay, they can do so through the OTA, or they can look the hotel up directly on their website and book through there - which is one more extra step. If the guest has chosen to book on the company’s website, that means they chose not to book through a middle man and has chosen to book directly with the hotel.
As a traveler, there are many advantages to booking with an OTA. They offer competitive pricing, filters for all your criteria, images, reviews, and comparisons with the competition. Hotel’s are now in a situation where they need to create more value to potential guests to book directly with them and ensure the customer understands that the value of booking directly with the hotel outweighs the value they are receiving from booking with an OTA.
7 top hotel incentives for direct bookings
1. Everyone loves free stuff
It’s all about creating value for your guests. Additionally, there are many things you can offer as complimentary to your guests as hotel incentives that come as a small cost to you compared to the commission you would have to pay to the OTA for that booking. Things like free airport pick-up or drop off, complimentary continental breakfast, free parking, or a free drink at the hotel bar are all things that guests love as a little ‘extra’. Please note: offering free wi-fi is no longer compelling to guests, as this is a more of a customer expectation now compared to the past.
2.Discounts on direct
There are many ways to create value for your guest without actually discounting a price on your room. According to the above diagram, almost 50% of guests would be motivated by a room upgrade to book direct. Offering a free upgrade as an incentive to the next tiered room (subject on availability of course) would make a great incentive for guests to book direct.
3.Your website is your store front
Social media and brand presence are becoming the top priority for how millennial travelers book. If your website is even the slightest bit shabby, outdated or hard to use, you can trust the millennial to move on. The first impression really does matter here. If a traveler has shortlisted you on their OTA search, and has made the next step on checking your social media channels and homepage to further contend you as their choice, then the last thing really sealing the deal here is how they perceive you on these fronts. Invest in your branding and social media marketing - it will mean the difference between a booking and simply being on the “maybe” list.
4.Tech advantages
We are in the ‘experience’ age and anything that your hotel can do to create a seamless experience from the moment the hotel name is entered into that search engine, to the booking, to the initial communication via emails. Hotels should be looking to leverage their hotel to automate, and efficiently facilitate this entire process. This hotel incentive essentially means that the easier it is to do business with you, the more people will do business with you. Things like mobile apps, remote check-ins, and live-chat are things that are becoming more of a customer expectation rather than an innovation, especially with millennial travelers. Investing in technology here is a means of staying competitive.
5.Offer Flexibility
Travelers nowadays have a different criteria when booking travel. Many would forgo the comforts of booking flights with ideal departure times to get up extremely early or take the red-eye for a great deal on a flight. By offering flexible check-ins upon direct booking, you’re offering that traveler the comfort of not having to wait for the clock to hit 3pm while they wait tired, hungry, covered in airplane stench in your lobby. This is something that consumers are looking for that aren’t typically offered, especially on OTA websites so you can use this as your bargaining chip to drive those direct bookings. Choosing a great PMS and channel manager for your tech stack here will greatly help with offering flexibility as it gives you room information in real-time.
6.Last minute ‘hot’ deals
The numbers here don’t lie: Criteo’s Summer Travel Report deduced that 70% of last minute reservations that hotels received were booked on mobile devices. Additionally, Skift found that 52% of millennial business travelers booked their accommodations on their mobile device and of those 52%, 60% of those mobile hotel reservations were made at the last minute. This is a great way to offer those unoccupied rooms at a reduced rate and make revenue that otherwise would have either been not booked at all, or booked at the expense of an OTA.
7.Make sure your customer gets it
Offering these hotel incentives are only as effective as the communication your potential customer is receiving to actually understand it. Optimize your social channels and website to ensure that it is clear to your guest what they will be receiving if they book directly with you. Again, we reiterate: the easier it is to do business with you, the more people will actually do business with you.
Knowing your market and audience to find out what hotel incentive is most effective is key when developing strategies to increase your direct bookings. Ensure you’re doing the right type of research and base your decisions on data before experimenting with different incentives. Also, don’t be afraid to try out different things - it typically takes a few strategies that work well together to be an effective strategy. Lastly, get creative - you know your guests best and what they’re after so don’t be afraid to innovate, you might just be on the next big thing.
