Last updated on 19 Jan 2023
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.
Word-of-Mouth Remains King
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 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 social media with your potential customers does influence people more than 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. Being present on social platforms and regularly pushing out content 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 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 their website.
TripAdvisor: The Second Most Important Source
TripAdvisor comes second after friends and family as a source of direct hotel bookings. According to a survey by PhocusWright, 92% agreed that TripAdvisor hotel reviews helped them pick the right hotel. It specifically caters to enhancing the visibility and sales of small hotels by providing them exposure on an international platform. Small hotels can advertise their own booking engine based on the TripConnect tool and extend the outreach of their website to potential guests. Reviews play a major role in driving audience to the platform, and this is where small hotels can score above the big guns. A recent survey of independent Indian hotels suggests there was a 100–300% increase in traffic to their direct website by leveraging this platform.
The Declining Influence of OTAs on Direct Bookings
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:
- OTAs are building some brand loyalty and preventing guests from booking with the hotels directly.
- OTAs are offering a better interface which allows travelers to make a secure transaction more confidently — which stand-alone hotel websites are not offering.
- 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.
The first factor can be of little relevance since according to a recent study, travellers visit up to 21 sites before booking hotels for their travel itinerary.
The second and third factors could be playing an important role 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 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 — since there would be one platform from which hotels can keep an eye on room rates quoted across all OTAs and act quickly in case of disparity.
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 room sales. This can be effectively done by the use of a fully integrated 360° 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 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.
