In Pursuit of an Effective Direct Revenue Strategy For Hotels

Last updated on April 24th, 2019 at 08:57 am

A recent survey released by the WIHP, a hotel marketing agency, compares the sources of direct hotel bookings from 2011 to 2014.

Here are some of the observations and their implications that we derived from the survey which would be of relevance to Direct Revenue Strategy for hotels.

• It can be observed that word-of-mouth remains the most effective method for direct bookings, with friends and family contributing 23% to the direct booking sources for the year 2014. While for the most part, it is a result of direct interaction with and positive experiences of guests with your brand that leads to such direct bookings, one might also consider that a hotel’s social media engagement activity has also a role to play in this. However, exclusively attributing this to organic exchanges over social media platforms of the hotel still remains debatable.
• Successfully engaging and maintaining conversations on the social media with your potential customers does influence people more than the paid ads, but one cannot ignore the fact that it takes a good amount of time and investment to build a loyal following of relevant audiences. This can be of little value to small hotels that normally have a tight marketing budget and less time on their hand due to limited human resources. Having said that, completely ignoring your virtual social identity would not be a wise solution in itself. Being present on social platforms and regularly pushing out content on those platforms does help in reassuring visitors about the credibility of the hotel.
• If you feel content generation would not fit into your budget, then the least you can do is to post your latest offers, deals and rates. In such a scenario, small hotels would at least have a presence on social platforms which could be indicated to visitors by embedding social media widgets on the home page of its website. Also, such widgets can be made to appear with every blog post, providing the visitors an easy way to share your content with their network.
•  TripAdvisor comes second in the place after friends and family as a source of direct hotel bookings. According to a survey by PhoCusWright, 92% agreed with the statement that TripAdvisor hotel reviews helped them pick the right hotel for their travel needs. It specifically caters to enhancing the visibility and sales of small hotels by providing them an exposure on an international platform. Small hotels can advertise their own booking engine based on the recently launched Tripconnect tool and extend the outreach of their own website to potential guests in an easier way. Reviews play a major role in driving audience to its platform and this is where small hotels can score above the big guns.A recent survey of independent Indian Hotels suggests that there was a 100-300% increase in traffic to their direct website by leveraging this platform.
• Next thing to be observed is that there has been a steadily declining trend of direct bookings coming after travelers were influenced by OTAs.This could imply 3 factors:

1. OTAs are building some brand loyalty and preventing guests from booking with the hotels directly.
2. OTAs are offering a better interface which allows travelers to make a secure transaction more confidently which stand-alone hotel websites are not offering.
3. Cut-throat competition among OTAs due to which guests are finding the best deal on an OTA rather than on the hotel’s own website.

First factor can be of little relevance since according to a recent study conducted by a web analytic firm, travelers visit up to 21 sites before booking hotels for their travel itinerary.

The second and third factors could be playing an important role here because of the raging price war among OTAs, where they sometimes end up selling at losses just to retain their market share. However, this strategy of OTAs can have only a limited run now with the emergence of hotel meta-search engines that allow hotels to expose their booking engines directly, thereby competing directly for their rooms. Also, the impending consolidation in the hospitality industry through channel managers and centralized reservation systems would cool off the rate disparity war between OTAs and hotels as well as among the OTAs themselves, since there would be one platform from which hotels can keep an eye on their room rates quoted across all OTAs and act quickly in case of disparity instead of getting stuck in a downward spiral of rates due to automated bots of different OTAs competing with each other.

Closing Opinion

What this implies for small hotels is that they should be presenting themselves effectively on as many online platforms as possible. Complete description, coupled with appealing pictures and decent reviews goes a long way in building credibility among visitors. Hotels that sell more do manage to climb up the ranks faster on OTAs; hence, they should be exposing more inventories in order to increase the room sales. This can be effectively done by the use of a fully integrated 360° degree platform which directly interacts with all OTAs off the actual booking chart of the hotel.

An important point which cannot be emphasized enough, more so in the Indian context, is the continued losing battle that the offline travel agents are fighting against the massively omnipresent online travel portals in terms of being the booking source of choice. Small hotels need to start looking beyond offline travel agents and adapt to the new age environment as soon as possible and start getting familiar with new age hospitality products, such as channel managers and centralized reservation systems, which can help them boost sales.