While working for an independent hotel booking engine company, I quickly learned the many challenges of convincing consumers to book directly versus booking with an Online Travel Agent (OTA). Many seasoned hoteliers have figured out online strategies to encourage direct booking, but not all these tactics easily apply to the vacation/short-term rental industry. So, let’s talk a little bit about my experience and what my customers have had experience with in counteracting the OTA movement to boost your direct bookings and increase your revenue per stay.
1. Optimize Your Direct Booking Engine and OTAs
You need to ensure your online booking engine is easy to find and navigate because this will have an impact on your bookings. Ensure that you are “mobile first” and not “mobile friendly” – meaning that your website is first optimized for a mobile experience, which has become the number one way guests access your site. It is thought that if your booking process is more than 3 steps, people will abandon their cart. When was the last time you went through and tested your booking engine? When was the last time you updated your content? Have you checked your Google Analytics recently to see where people are navigating? Also consider optimizing your presence on your OTAs and having content that encourages guests to visit the website and ideally book directly.
In my experience, there are two choices you can make when it comes to booking engines:
Option 1 – Free Booking Engine
Most PMS (Property Management System) companies offer a free booking engine with their software. The best feature here is that it’s free and you’re guaranteed to have the guest details transfer into your PMS. The downside is that usually, booking engines aren’t their focus – most PMS companies care about operations and finances, and they put very little effort into building and maintaining other software. You cannot guarantee their booking process is going to suit your guests and your offering.
Option 2 – Third Party Booking Engine
When it comes to differentiating yourself and offering a rock-solid and aesthetically pleasing booking experience, you may need to consider third-party booking companies. What’s important here is that you shop around and ensure that they have the necessary integrations to make your booking process as seamless as possible. When you have limited unit availability, make sure that the integration is two-way. Manual entry is not your friend. You may need to put in a little more effort to customize the booking engine to your liking, but it should result in higher booking conversions.
One last important tip: don’t forget that OTA’s typically require rate parity with your direct booking engine (more on this below). Check your contract with your OTA’s before you start pricing your channels.
2. Build a Marketing List
To acquire more direct bookings, you first need to build a presence and accumulate data on people interested in your offering.
To collect guest data, consider using some of these approaches:
- Use a lead magnet on your website or social channels and ask people to share their details with you. Consider an area guide, a checklist, or some local tips.
- Offer guests something if they engage with your social media channels. Perhaps a share or a like enters them into a contest.
- Collect guest data during the WiFi authentication process. This ensures you collect guest data for everyone staying versus just the booker details.
- Ask for guest contact information should they forget something behind. A great tactic because no one likes losing things!
Don’t forget though: you need to follow your local email legislation so you aren’t accused of spamming and receive a large fine (Canada legislation, US legislation, UK legislation). Always include an unsubscribe button in any of your emails. You should also know that sometimes third-party email systems are automatically blocked because of spam filters, so marketing emails should not be your only approach.
3. Use PMS, Text, and Marketing Automation to Reach Guests
You often do not have enough time in the day to tackle everything, so make sure you rely on automation to help complete these tasks.
- Your PMS should be your central repository of information about your guests and their details, and every other system should be connected to it.
- Your marketing and communication tools should pull guest details and be configured to send customized emails to encourage repeat guest bookings.
- Your social channels should be connected to your social management system (like Later.com or Hubspot), which relate back to your marketing strategy.
- Your booking engine should be dropping guest details into your PMS.
Another fantastic tactic is to send a thank you text message upon guest departure giving them a repeat booking code and encouraging them to book directly. Or perhaps you provide them with a repeat guest code upon completion of a survey. Simply put: everything should be interconnected to make your life easier.
4. Market Something Extra on Your Website and Social Channels That’s Not Available Through OTAs
This is an old tip my former city center hotel clients used to use. They offered free parking when you booked with them directly – something they didn’t offer on the OTAs. My own parents book directly with a specific hotel to stay close to the airport for this exact reason. Note that this does not conflict with rate parity on your direct channel versus OTA’s. The idea of rate parity is to price your direct channel at the same level or higher than that of your OTA. This is one of the common aspects of OTA contracts, and you should pay attention to it when pricing.
The other important (and obvious) aspect of this is that whatever you offer cannot exceed the added revenue you receive from a direct booking. Make sure that whatever you offer still allows you to make extra money (duh).
5. Offer Something to Repeat Guests That They Can’t Get With OTAs
Another useful tactic is to provide repeat guests with an offer that they otherwise wouldn’t get from an OTA. This is where your marketing list becomes important. Like the point above, be sure that you have a way to make more money than you would with a guest who books via an OTA. Research suggests that guests who book directly typically spend more money with you overall, so ensure that you have upselling opportunities to engage the guest with your brand. Perhaps this is free parking, a discount code for a local establishment, or an extra amenity. Whatever it is, it needs to be worthwhile for the guest and promoted on your channels/website, so guests are aware of it.
Even though it pains managers to send these large monthly fees over to the OTAs, I don’t think we’ll see them going away any time soon. I recently read some comments that direct bookings are important but that shifting away from these channels entirely isn’t likely your best strategy. The OTAs do a lot of advocacy and outreach in a broad range of markets to help promote a positive image of vacation/short-term rentals and ensure the legislation doesn’t eradicate the market. On top of that, the platforms serve as a fantastic way to acquire new customers, which gives you the chance to win direct business later.
You use can use technology to grow your revenue by increasing direct bookings, knowing you likely won’t get 100% there 100% of the time. Consider implementing one or more of these technology tricks and don’t forget to measure their success so you can see how much they add to your bottom line.