New research into the relationship between hotels and booking sites provides the latest insights into the frustrations and positive side of this often hard-to-balance relationship.
Distribution strategies for the hotel industry or “through which channels do I sell my rooms” is today’s hot topic, especially for independent hotels.
Independent Hotel Show and Avvio have collaborated by speaking to hundreds of hoteliers about how the industry feels about the rise of OTAs (Online Travel Agencies). 150 hoteliers participated in the research, together accounting for millions of online bookings each year.
In general, the OTAs are considered an important part of the marketing mix, however the frustration regarding high commissions means the vast majority of hotels take the stimulation of direct bookings very seriously.
Responses came from the Netherlands, UK, Belgium, Ireland and Germany, with more than sixty percent of the participants being hotel owners or managers. Other respondents are involved with reservations on a daily basis.
Almost a third of the hoteliers own more than a hundred rooms and a large number say they own more than fifty rooms. Three-quarters of the hotels are managed independently and responsible for their own revenue or yield management.
Hoteliers are working hard to encourage direct bookings; 70% admit that they take securing as many direct bookings as possible seriously or very seriously. And the main driver of this seems to be the commissions charged by booking sites; the majority find these rates unacceptable. #DirectBookingSurvey
The Top 10 Frustrations
- Big players are able to monopolise the market.
- Commissions have risen to an unacceptable level.
- A marketplace that is controlled by dotcom companies without hotels being at the heart.
- ‘Rate Parity’ means there is no freedom to adjust prices yourself.
- The position and ranking of independent hotels are weak when working alongside large international chains.
- Lack of guest data means there is often a slow response for guest questions from the front office, with direct guest contact impossible.
- The dominance of booking sites on Google and the effect on individual hotel websites – hoteliers feel OTAs should not be allowed to buy individual hotel name in Google Ads.
- Public perception is that they get the best deal through booking sites.
- Offering prepaid rooms without indicating that this cannot be cancelled.
- Booking sites failing to take into account the cancellation terms of hotels.
Cooperating with the OTAs
Almost all the hoteliers surveyed (93%) work with booking sites and realise the benefits of doing so. Only 7% refuse to receive bookings via OTAs because of excessive commissions.
From the 93% of the hotels that receive reservations via OTAs, more than 60% think that booking sites ensure a structured offer for the hotel guest that can be easily compared by timing and region.
Despite the high commissions, OTAs bring hotel guests from all over the world and more than half of the hoteliers surveyed acknowledge they can save on marketing costs due to the international reach of OTAs.
Finally, the majority (60%) of the hoteliers say they also rely on the booking sites to check prices of their competitors.
Meeting in Middle?
Over half (58%) of the respondents think a mix of 70% direct bookings and 30% OTA bookings is optimal, as almost half of the hotels consider the commission of the hotels as unacceptably high, especially when it comes to returning hotel guests.
Hoteliers often assess communication with OTAs as ‘neutral’, which is also the outcome on the question of how they feel these companies handle guest data.
Securing Your Own Bookings
Hotels put a lot of energy into the content of their own websites in order to improve the findability – with 73% stating this is how they hope to secure more direct bookings.
Having a “best price guarantee” on the site is then the most popular promotion used to stimulate direct bookings (71%) followed by incentives such as a welcome drink, late check-out and a discount for repeat bookings (70%). More than half of the respondents use loyalty programs to maintain direct contact with guests.
Almost 65% believe the most effective way to secure direct bookings is through promoting rooms on Social Media, followed by 50% who recommend using email marketing campaigns, aimed at returning guests. For Social Media channels; 60% say Facebook has been most effective followed by Instagram (33%).
Explore Direct Bookings at the Independent Hotel Show
On day two of the Independent Hotel Show, Frank Reeves, Avvio’s Co-founder and CEO, will give a workshop on this topic to attendees- get your ticket to join him.