The quest for higher profitability and increasing TRevPAG is an ongoing challenge for hoteliers. One key strategy that has gained prominence in recent years is the emphasis on driving direct bookings. Not only does this approach empower hotels to establish a direct connection with their guests, but it also has a substantial impact on cost savings. In this article, we will delve into the importance of driving direct bookings, explore the potential savings, and provide five actionable tips to boost direct bookings for your hotel.
The Importance of Driving Direct Bookings
Cutting Out the Middleman
When guests book through third-party online travel agencies (OTAs), hotels incur significant commission fees that can range from 15% to 30%. By encouraging guests to book directly through the hotel’s website, these hefty fees are bypassed, allowing hoteliers to retain a larger portion of the revenue. This not only improves the bottom line but also provides greater control over pricing and promotions.
Establishing a Direct Relationship
Direct bookings foster a direct line of communication between the hotel and its guests. This connection enables hotels to better understand guest preferences, anticipate needs, and build long-term relationships. Personalized experiences, loyalty programs, and exclusive offers can be tailored to individual guests, enhancing customer satisfaction and loyalty.
How Much Could You Be Potentially Saving?
To comprehend the magnitude of potential savings, let’s consider a hypothetical scenario. Suppose a hotel has the following:
- Number of rooms: 100
- ADR (Average Daily Rate): $200
- Average Occupancy: 80%
- OTA Commissions: 20%
- Increase in Direct Bookings: 20%
The hotel would be saving a whopping $233,600 in commissions each year. These funds could be reinvested in enhancing guest experiences, staff training or increased marketing efforts.
Want to find out how much savings your hotel could be gaining? Use our free Direct Booking Savings Calculator to find out.
5 Tips to Drive Direct Bookings
1. Invest in a User-Friendly Website
A visually appealing and user-friendly website is your hotel’s digital storefront. Ensure that your website is easy to navigate, responsive across devices, and provides a seamless booking experience. Implementing an intuitive booking engine simplifies the reservation process, reducing the likelihood of potential guests abandoning their bookings midway.
2. Offer Exclusive Direct Booking Incentives
Entice guests to book directly by offering exclusive incentives. This could include discounts, room upgrades, complimentary amenities, or flexible cancellation policies. Highlight these perks prominently on your website to capture the attention of potential guests, motivating them to choose the direct booking route.
3. Collect Guest Data and Preferences
Before considering strategies to boost direct bookings, establishing a comprehensive guest database is paramount for effective marketing. Hence, the critical first step involves gathering essential guest information, including email addresses, nationality, age, and other pertinent details from your existing guests. Equally vital is the collection of guest preferences, as this not only enhances the overall guest experience but also enables effective segmentation for future targeted marketing campaigns. This can be easily accomplished with the adoption of KAI Guest Engagement, to collect and create an enriched guest database.
4. Leverage Email Marketing
Use solutions like KAI Marketing CRM to harness the power of targeted email marketing to engage with your audience directly. Regularly update your followers with enticing promotions, regular hotel updates, and guest-specific offers. Use targeted email campaigns to communicate exclusive offers to your loyal customer base, encouraging them to book directly for added benefits.
5. Monitor and Respond to Guest Reviews
Guest reviews play a pivotal role in influencing potential bookings (both direct and OTAs). Actively monitor and respond to reviews on various platforms, showcasing your commitment to guest satisfaction. Positive responses demonstrate your dedication to addressing concerns, while negative feedback provides an opportunity to showcase your hotel’s commitment to improvement. This engagement fosters trust and encourages potential guests to book directly, confident in the quality of service they can expect.
Conclusion
In the competitive landscape of the hospitality industry, driving direct bookings is not merely a strategy but a necessity. The financial savings, coupled with the ability to forge lasting relationships with guests, make this approach indispensable for hoteliers. By investing in a user-friendly website, offering exclusive incentives, collecting guest data and preferences, leveraging digital marketing, and actively managing guest reviews, hotels can unlock the true potential of direct bookings and propel their business to new heights. Embrace these strategies, and watch as your hotel not only thrives financially but also flourishes as a preferred choice for discerning travellers.
