Improving Direct Bookings in the Wake of COVID-19
Following an extremely challenging period, as we begin to reopen and rebuild as an industry – and whilst desperately hoping to avoid a second wave of infections and any further lockdown – we’re starting to see some positive signs emerging.
One of which centres on direct booking.
Hotels have long been in thrall to intermediary booking channels such as Online Travel Agents. The OTAs dominate Google search rankings, meaning that casual guests, when looking to book a hotel stay, find these results first and foremost. And although this generates bookings for hotels, the major drawback is, of course, the high commission fees they charge.
The mantra of hotels to guests in recent years then has been to ‘book direct’.
But while it’s all well and good saying this, how do you make that the reality in practice?
Well, in the wake of lockdown and with hotels reopening, we’re seeing some very encouraging trends emerge with guests now opting to book directly via hotels’ own channels.
Via our live dashboard analysis tool, which evaluates bookings from 3,500 hotels across Europe and the UK, helping to give us invaluable insight into guest booking preferences we’ve clearly seen a move towards booking direct.
Why do we think this is?
Well, like with the hotels themselves, OTA bookings also disappeared as lockdown began. And it wasn’t just confirmed bookings either – web traffic and searches for hotels dried up almost immediately too. People simply weren’t looking for hotel stays, let alone making a booking.
Now though, since lockdown measures began to ease, not only are they looking, they’re looking to book directly with the hotel and bypassing OTAs entirely.
One of the advantages to being slightly behind Europe in terms of reopening, is that we can take insight from those countries that have already reopened. For instance, Poland and Germany lifted their lockdowns in early May. Using booking data from both of these, we can see a gradual recovery in booking volume, as well as a clear move towards a faster turnaround in direct bookings – with guests opting to book more ‘last minute’ stays thanks to the booking window being shortened through March and April’s closures.
A Polish hotel group called Grano Hotels offers an example of how direct bookings have improved. Having previously experienced a healthy 50% share of direct bookings, Grano hotels are now seeing highs of 65% since reopening – a proportion of bookings that’s really helping to enhance their margins.
General web traffic for hotels (from a low of almost zero), also rapidly bounced back once lockdown eased. People, seeing the opportunity for a summer holiday after all, were keen to assess their options and this offered a prime opportunity for hoteliers – especially those with an efficient direct booking strategy, as it enabled them to reap considerable rewards.
One particular example of impressive results is Port Lympne, a hotel and wild animal reserve in Kent. In the wake of the UK Government giving the green light for hotels to reopen, Port Lympne saw a booking almost every 11 seconds.
Having been closed for 3 months, this created a very welcome flood of revenue to help Port Lympne recover. However, this only materialised thanks to having a robust strategy already in place. Incorporating online sales tools, automated booking quotations and a genuinely appealing booking engine, the hotel was well placed to handle the influx, and it allowed them to maximise the demand. If they’d been relying on receptionists or an outdated booking engine they would have both missed bookings and frustrated prospective guests who may simply have looked elsewhere.
Of course, one thing Port Lympne benefits from is the diversity of its offering, which, with many aspects focused on outdoor experiences, does serve to give it an advantage during the pandemic. However, demand is booming for the more traditional hotels too, especially those on the coast.
For hotels in general, there are ways of encouraging direct bookings, which helps to give additional value to guests. These often take the form of enticing extras, such as added meals, free bottles of wine, spa treatments, ‘best rate guaranteed’ and other bonuses, all of which are only made available through a hotel’s direct channels.
Even factoring these extras in, hotels will still benefit when compared against OTA commission fees. Via our analysis tool, we’ve seen an average increase in the Average Room Rate of 50% when using direct channels as opposed to OTAs.
One element that’s also proved crucial is the ability of hotels to create interest in their offering when natural demand and overseas visitors have been absent.
Those hotels with a strong brand and extensive databases (with the appropriate marketing consents in place) have had a clear advantage in generating bookings. Via CRM led dedicated marketing, they’ve been able to put their brand in front of those who have already engaged with it. Familiarity helps with trust, and this has become an ever more important factor since reopening. People want to feel safe, so re-engaging with a brand they already know is a much more appealing prospect than taking a chance on the unknown.
This trust also leads into a sense of security. Uncertainty still abounds, and one of the benefits of booking via a hotel directly is that they can shape their own returns policies, communicating directly with guests to offer alternative options; be that to rebook, a refund or something else. OTAs, by contrast, don’t offer that level of flexibility.
For those hotels who’ve worked hard to establish direct relations with guests and developed their brand then, they’re seeing real benefit now. Indeed, our data shows they’ve been the first to see booking increases, thereby paving the way for the wider industry and helping to convey that hospitality is open again and ready to embrace business.
So, what can hotels/hoteliers do to take advantage of the current high demand? With guests currently bypassing OTAs, now is the time to encourage change – and there are several key steps you can take.
1) Create engagement – talk about what you’re doing, and generate a sense of loyalty. By keeping guests informed, you’ll stay foremost in their mind and encourage them to come back.
2) Utilise a CRM – these offer a great way for hotels to create regular, authentic contact, but one that’s heavily automated to take the burden off your team.
3) Make booking easy – a simple, straightforward booking engine is essential. If guests find it easy they’ll not only go ahead and book but, hopefully, they’ll come back.
4) Make it look good – don’t forget aesthetics. An appealing, attractive website with clear CTAs that then moves into an easy to use booking engine will work wonders.
5) Reward loyalty and direct bookings – offer those extras for either coming back or for booking directly. Create a good impression of booking directly now and you’ll reap the rewards in the future.
Establishing a comprehensive direct booking strategy now will not only enable you to generate more bookings at lower cost, it will also help to change the approach to future bookings. So, not only can you create better margins as you rebuild now, you’ll also be setting yourself up for the long term as more and more guests recognise that approaching the hotel directly will see the best reward, thereby taking the power away from OTAs and giving it back to the hotelier.
Samantha Williams is the UK Market Owner for Profitroom, a leading SaaS provider of hospitality booking solutions and direct strategies.