The debate over direct bookings is amongst the hottest topic of debates between all hoteliers and OTAs since the past two years. After living in harmony for almost two decades, both have gotten into an open and outright competition on this issue and are striving to tilt the scales in their favor.
Having followed this debate on direct bookings for a while now, I came across a remarkable piece of write-up — rather a solution for hoteliers to make more money. Evan Davies, founder of thebookingfactory.com, has brilliantly offered to fix the problem in his article “Giving a 15% discount for hotel direct bookings will make more money than a booking from the OTA with 15% commission”. Behind his logic, lies no rocket science, but a simple computation. Davies explains why all hotels should adopt direct booking and how it will save them extra bucks. By reducing their dependency on OTAs and saving on that 15% commission, they can re-invest in something much better. His strategy of giving 15% discount instead, to customers on directly booking with the hotel website looks like something that would work just fine for both hoteliers as well as customers.
Let’s have a look at the digits that direct booking would fetch you, according to him.
There you have it, you can profit by giving a 15% markdown on direct bookings. You are losing business to OTAs anyway when it comes to customer information and guest profiling — why not get that in your pocket too. A small discount for your customer would hurt no one. In fact, you’re working your way up to growing and acquiring loyal customers. Believe it or not, the cost of acquiring a new customer is much more than retaining an existing one.
He also offers a booking engine fully integrated to hotels’ websites free of cost. This is a strategy you cannot miss out on — by offering maximum offers on direct reservations to guests like discounts, or even perks like room upgrades, complimentary meals, spa and many more, you are on your way to see those profit digits grow by the day.
He has also taken into consideration the fact that OTAs might be upset with this action of the hotels. He gives a thumbs up to all hotels to go ahead with the discount strategy and suggests that a balance be maintained and things be done the right way, even though OTAs might seem a bit nasty at first. “OTA cancellation policy has 24-hour free cancellation while your offer has 15% off and 3 day policy attached” is how Evan confirms that the customer is going to prefer booking with the hotel directly where he is offered a discount and a much bigger cancellation policy attached.
Further, he recommends optimizing your hotel’s website to the maximum as potential guests browse for information, once it catches their interest on OTAs. Talk about new features of your hotel with images, what guests have to say about their stay, nearby attractions and holiday related events, additions to your menu or even add a video tour of your hotel. Don’t forget to add a comment box or a survey where you ask them what information they require to make their stay better.
Sounds like a lot of good things, but a lot of hard work too? Well, technology has again come to the rescue as we are constantly advancing towards automation of interaction with the environment around us. Say hello to Chatbots-the future of hospitality industry which will be a game-changing option to serve several purposes — from booking rooms to concierge services, to sight-seeing trips and understanding negative guest sentiments. While the hospitality chatbot is still at its infancy stage, Trilyo is one of the few players in the industry to provide chatbot solutions for small and big hotels.
With this strategy, you are not just building your finances, but also a great customer loyalty and marketing your brand the right way. Build your hotel website and encourage customers to book directly with you. Choose the right booking engine that suits your budget, keep adding incentives for customers, deploy your own brand’s chatbot with Trilyo, and deliver happy customers all the way!
Share with a hotelier friend or anyone who you think might be interested. Let us know your thoughts or drop us a comment below or on Twitter. If you are looking at increasing loyalty and guest experience through Chatbots, get one with us here — its free, simple and easy!