It is agreeable that online travel agencies (OTAs) are inevitable for the growth of a hotel business. But, they charge you a commission out of your profit, which eventually reduces the money that goes to your pocket. The remedy is boosting hotel direct bookings alongside advertising your rooms and services on OTAs.
Direct bookings are carried out through your brand website or mobile application. Every booking through these direct channels will credit the entire profit to your pocket without any commission or cut. You do have to implement a perfect marketing strategy to make sure that people visit your direct platforms to find you instead of any specific OTA.
Most small and medium-sized hotels are still unaware of the power of hotel direct bookings. It is always good to partner with OTAs and have a steady flow of guests at a fixed or variable commission. But with passing time, this sole dependency on OTAs will impact your profits, and you will have low capital to invest in hotel upgrades.
Hence, this article is here to educate you on the importance of boosting hotel direct bookings.
Reasons Why Direct Bookings Matter for Hotel Businesses
Successful hotels in the hospitality industry are already aware of how proficient direct bookings are over OTAs. Now it is time for you to integrate your online hotel booking engine into the property management system and accept direct bookings through the website and mobile applications.
To help you be firm on your decision, here are a few reasons to prove its importance:
1. Promote Direct Relationships
Hospitality is a business for people, and when you solely depend on third-party businesses to market your rooms, you are missing out on building a direct relationship. People will remember the OTA they used to book your hotel but might not remember you.
Slowly, OTAs are upgrading their policies and are refusing to pass on all the guest details to hotels, and only the necessary booking information will be passed on to them. Hence, this relationship-blocker for your hotel business will deteriorate your ability to understand and serve the customers.
So with direct bookings, the guests will connect directly with you and share all the important key data for your database. They will book directly with you and will highlight the purpose of the visit, special preferences, and service requirements. Based on that, you can build a direct relationship with your guests to personalize their services. Hence, it will increase the chances of repeat business opportunities from those guests.
2. Lower Costs of Customer Acquisition
OTAs charge a commission cost ranging from 10% to 30%, depending on their popularity. Your profit will take a toll as this commission is included in your customer acquisition cost. If you keep paying such a high amount for acquiring new customers through OTAs, you won’t be able to increase your profit markup.
To avoid it, you must integrate the hotel booking engine software into your direct channels and promote bookings through them without involving any third party. Keep yourself available on OTA platforms, but at the same time, you should market your rooms and services to the target audience for booking directly with you.
You can do this by offering a discount or complimentary service on booking through your website or mobile application. Nothing attracts your potential guests more than discounts on hotel rooms. As a result, you will save part of your commissions with direct customers, lowering your customer acquisition cost.
3. Lower Cancellation Rates
Most people prefer OTAs to book multiple properties at different destinations because they are not yet finalized on which destination they want to visit. As a result, they pick one and abandon all the other bookings, which increases the cancellation rate. OTAs give an option of room bookings without any advance payment, for which these cancellation rates increase.
OTAs keep prompting offers such as ‘Free Cancellation’ and ‘Pay at Hotel’ to lure customers into booking with them. Hence, it is the ideology of people to prefer those platforms to be able to cancel themat the last moment. And that affects your occupancy rate and triggers a loss of revenue for your hotel business.
Promoting more direct bookings will help you ensure that your guests are sure of traveling to the destination where you operate your business. Moreover, you can put up a request to pay an advance amount to confirm the booking and have cancellation charges. Hence, this will lower the cancellation rates, and your revenue will not get affected.
4. Protect Your Brand Impression
You have spent a fortune building your website and designing it to replicate your ambiance. Anytime guests visit your website, they will feel like they are in your actual property space and like your unique way of representing everything. But it is not the case with OTAs.
OTAs display your hotel listing the same way they do for all other hotels in their database. And that doesn’t build any kind of emotional connection with the guests. Your brand’s reputation might not be affected because the guests will observe your hotel listing in a comparative ideology to choose the best, without judging how the ad looks.
But, the effort and money you spent building your ambiance on the website will go wasted, as your potential guests won’t get to see what you have built for them. A website portrays the face of your brand, and it is important for your guests to land on your website to help you with a positive brand impression.
Therefore, direct bookings are pretty much important, and you must integrate your booking engine to PMS and get started with the job.
5. Promoting Digital Innovation
You ought to promote digital innovation in the future. You will be starting with mobile check-ins, digital room keys, and other such facilities in the future to ensure that you are keeping up with the trend. If you are already a few years into the hospitality industry, you probably have these facilities on your premises.
The problem with the OTAs is that your guests won’t be on your application or digital platforms unless they physically check in with you. So, it will be a hassle for you to make the guests adapt to these services while they are on the property. The guests might feel the transition is complex.
Therefore, direct bookings will help hotels recommend guests install their digital apps before checking in with the hotel. You can educate them about the digital facilities of your hotel long before they even check-in, which will save time and hassle. As a result, you will be able to enhance the guest experience.
Start Your Pursuit of Boosting Direct Bookings for Your Hotel Business
If you are convinced of the necessity of direct bookings alongside OTAs, it is time you should take action for it. As stated earlier in the article, you must get your online hotel booking engine integrated into a PMS to make the booking facilities accessible through the website and mobile application.
AxisRooms can help you with affordable and feature-loaded booking engine software. You can check out the website and take a demonstration before finalizing on integrating it into your hotel operations. Your revenue growth will be visible when you start emphasizing boosting hotel direct bookings.