Simon Bullingham, MD of Journey, the Hotel Marketing Agency, looks at how hotels can cut down on their dependence on the Online Travel Agents whilst also increasing occupancy rates and boosting bookings direct.
The growing dominance of online travel agents (OTAs) is one of the biggest challenges currently facing hotels, notably how to overcome reliance on them while also increasing room occupancy rates.
Originally hailed as an easy method of increasing room occupancy and as useful providers of extra revenue, OTAs have now become the go-to booking method, leaving hotel websites trailing behind.
OTAs, such as Booking.com, are often the first port of call for people searching for rooms in a specific town or region. By offering offer price visibility and presenting a range of different options, OTAs make it simple to then convert this search into a successful and cost effective booking. This simplicity and ease of use creates a loyalty among prospective guests, leaving little room for hotels themselves.
A common misconception
In our experience, people who book via an OTA leave it for a time and visit the hotel’s website directly in order to make a more informed choice, presenting hoteliers with an opportunity. But we have also found the majority of those people will then return back to the OTA to complete the booking, meaning a percentage of the rate price subsequently accrued is lost as commission, presenting hoteliers with a big challenge – how to make them book directly with you and save money on commission costs?
Ask yourself, is your website mobile responsive? Perhaps your booking engine is complicated and unwieldy? Or perhaps guests believe that OTAs offer the best deals?
The latter is a common misconception. The visibility of comparable prices allows visitors to make an instant cost-based judgement, thereby assuming they’re getting the best price.
OTAs often employ aggressive marketing techniques to ensure dominance of the market share. Using Pay Per Click (PPC) adverts that reference specific brands or hotel names places the OTA above organic search results, meaning traffic to the hotel’s website is directed to the OTA instead, potentially adding commission costs to a booking that would have happened anyway.
But, with poor occupancy rates a key issue facing hoteliers, it’s important to maintain a positive relationship with OTAs. There are still things that you can do to increase the number of direct bookings, improving revenues as a result.
Influencing website metrics
There are three main metrics to look at: quantity and quality of unique visitors (QQUV), IBE (‘into the booking engine’) and CRP (conversion rate percentage). Understanding how these aspects relate to one another will inform how they work together in a favourable manner for your hotel.
A number of factors can influence these metrics, such as website design, being mobile responsive, using the correct tone of voice and providing a well-defined user journey. A hotel marketing agency with sufficient digital nous can help to improve the realisation of your website, thereby improving these metrics.
A hotel website can effectively be split in two – the website itself and the onsite booking engine. As booking engines are usually provided by a third party, there’s not a huge amount a digital agency can do to increase their impact but there are two metrics a digital marketing agency can directly influence, QQUV and IBE.
Every website has a conversion rate. If the QQUV and IBE can be increased while maintaining the conversion rate, then naturally the volume of bookings will go up, resulting in greater revenue.
Employing sophisticated methods
There are also a number of tools an agency can utilise to improve QQUV, such as Search Engine Optimisation (SEO), PPC, banner remarketing and metasearch (compiling searches from other search engine data), plus new offerings such as TripAdvisor’s tripconnect. These latest approaches to marketing, combined with the more traditional forms, such as email, to target a specific demographic, will result in attracting more visitors and the right visitors to your hotel website.
Of course, an agency’s methods should be more sophisticated than simply doing these things. For it to be worthwhile, there needs to be a strategy, producing a comprehensive plan that sees all elements working in harmony to maximise the results.
But while your strategy is improving QQUV, how can you improve IBE? Once a prospective guest is on your website, there is an array of weaponry in your agency’s arsenal that can be employed to get guests directly into your booking engine.
Tweaks and changes make a big difference
A key aspect is analysis. Heat mapping allows you to see where on your website users are most active, allowing you to position aspects, such as the booking engine call to action, accordingly. Another possible tool is split testing – for example, changing the colour of the ‘book now’ button to blue for 50 per cent of visitors and green for the remaining 50 per cent, for example, allows you to monitor which colour converts best, determining the final choice.
While tweaks and changes to a website might only make minor percentage increases here and there, when added together they create a compelling increase in conversion, helping to improve the flow of the revenue stream.
There are also techniques an agency can employ to up the conversion rate once guests are in the booking engine. It’s a difficult task due to third party ownership of the engine itself, but an agency can design the front end, pulling the data through and presenting it in a more effective and user-friendly manner, thereby increasing the likelihood of a booking.
While price parity agreements with OTAs often restrict hotels when it comes to offering the best rate, they can certainly look at offering more attractive deals, such as a free breakfast or credit on the room tab, if guests book direct.
Using advertising to shout about the fact you offer the best rates discourages prospective guests from returning to OTAs. Displaying current room rates from various OTAs on your own booking page adds price visibility that obviously works in your favour.
‘Cart abandonment rescue’ is another instrument at your disposal. Target people who have left your site part way through their booking with pop ups encouraging a hesitant guest to finalise a direct booking. Other potential tools could be a Live Chat function on your website to actively engage with site visitors in real time. Not only does it reflect good customer service, but research has also proven that it improves the likelihood of a booking.