Tuesday, 18 May 2021

Don't Hesitate To Prioritize Hotel Direct Bookings Over OTA Bookings


Hotel room booking performance is based on a channel mix and these channels are the foundation of any hotel's sales and revenue strategy

A sharp revenue management strategy is the keystone to building hotel direct bookings

You as a hotelier are in charge of this and you must be committed to implementing the strategy and stay the course when doubt comes into play. 

The result of brilliant revenue management is an increase in direct bookings for your hotel which ultimately means higher profits as this channel provides the lowest cost of acquisition. 


Why should boutique hotels prioritize direct bookings? 

OTAs have massive marketing budgets that allow them to wield substantial influence as gatekeepers, imposing fees and charges for acquiring room bookings for hotels. 
The combination of higher booking volumes passing through intermediaries, the costs that require for intermediation and the pressure on rates will challenge any hotel revenue manager to maintain profit levels never mind increase them. 
These high charges and increasing OTA strength should encourage all boutique hotels to turn to hotel direct bookings which come at the lowest cost of acquisition and crucially, allow them to stay in control of their own guests.

luxury independent hotel direct booking


Read on to learn out tips on revenue management to help increase your direct bookings. You can also listen to our podcast with Patrick O’Flaherty who provides excellent insights.

1. Optimise your own website

Make sure you have a website and booking engine which are setup to deliver hotel direct bookings. 

This is not straightforward – while you may want your site to look beautiful it also needs to be optimised for online bookings. 

There are hundreds of factors which feed into this, from your own online review scores, through the site’s loading time to the placement of call to action buttons on key pages. 

Ask your agency to benchmark your site its effectiveness on acquiring direct bookings.


2. Define clear goals 

A key indicator showcases the revenue and profit per channel. 

Driving direct bookings is a team effort and requires that you keep the team focused on an overall strategy. 

This involves defining and monitoring your budget plans, revenue/profit KPIs, and other metrics such as occupancy, offers, and rates.


3. Know your guests 

You must know your customers. Ask all your staff to help out with this. 

This will help you to define your market segments and add them to the plan. 

Not only that, other departments in the hotel e.g. F&B can then strategise how they can cross sell most effectively to those segments. 

From these insights you will gain a wealth of data on your guests, be able to differentiate them, predict their booking behaviours, and manage them.

Your guest data is a rich source of competitive advantage over the OTAs.


4. Build a demand forecast 

The information you have collected will help you predict consumer behavior and price. 

You can then build a strategic plan related to rate and distribution. 

This will tell you how to deliver the right bookings through the right channel at the right time. 

You will likely need to check progress against this plan on a daily basis.


5. Have a balance in your booking channels 

Increasing sales, reservations, and profit needs a clear balance in your revenue management approach and to be fully aware of each department's goals.

What are the right KPIs in the boutique hotel industry? 
Knowing what issues you face helps you to define relevant KPIs and achieve your goals based on data-driven decisions.

If you want to measure the effective changes in your strategy, you must be clear about the end goal and relevant KPIs. 

Get More Direct Bookings

OWN Your Luxury independent hotel Direct Booking Strategy


There are four categories, each with defined metrics, which specifically lead to direct bookings:

1. Hotel website traffic 

  • Traffic per device 
  • Traffic per location 
  • Traffic per source 

2. Hotel website engagement and conversion rate

  • Conversion rate of searches to bookers 
  • Conversion rate of visitors in every channel to bookers 
  • Key website pages at the top of the search funnel 
  • Drop off points in the sales funnel 
  • Target for direct bookings in every channel, especially on key demand dates 

3. Profit per channel 

  • Maximum commission you are willing to pay daily 
  • Net average booking value (ABV) per channel 
  • Net average room rate (ARR) per channel 

4. Where your bookings are coming from

It's vital to understand what bookings you are getting from each channel. Set a benchmark to analyze and compare the findings for each channel. 

The booking pattern analysis consist of patterns such as:
  • What guests book through each channel? 
  • What is the difference between midweek VS weekend bookings?
  • What is length of stay per channel? 
  • What is cancellation percent per channel? 
  • What is peak booking time for each channel? 
  • What is geographical breakdown of each channel? 
  • How can you identify the lead in times? 

Aro Booking engine for luxury hotels

to sum up 

Hoteliers need to know how they can identify and then control each core revenue source of their hotel. 

It starts with setting clear goals and having thorough data analysis on bookings, guests and opportunities in the marketplace. 

To build a demand forecast and a strategic plan based on your goals you need data analysis, relevant KPI's and also input from staff in all the departments in your hotel. 

To maximise your revenue all your team should be involved. 
  
Last but not certainly least, it is vital for boutique hotels to get advice on their revenue management strategy from an agency who understand how the direct book channel fits into an overall strategy and how it can be optimised using the the hotel’s own website.