My colleague recently participated in an HSMAI event in Bangkok, Thailand. One of the general sessions focused on the increasing role of online travel agencies (OTAs) and questioned whether the hotels have lost revenue due to their own reliance on the channel. The message seemed to be that when used wisely, OTAs are a great vehicle for selling extra inventory. Nevertheless, many revenue managers continue to be too heavily dependent on the channel, providing inventory even during times of expected high occupancy.
This trend, of course, is nothing new to hoteliers. As we wrote last year, the commissions paid to OTAs are often viewed as just “the cost of doing business” and have been an industry norm for years. In our post, we discussed several ideas to consider when trying to convert more business on your site directly. From integrating social media on your hotel site to ensuring rate parity and offering consumers an added incentive, hotels can deploy a number of tactics in order to shift some of the bookings share away from the OTAs.
Fortunately, many hotels are beginning to action these ideas and are starting to regain some of the direct booking control they once enjoyed at the turn of the millenium. Nevertheless, the implementation process of these tactics does not come easy and other properties are continuing to struggle with it. My colleague was witness to these growing pains during a recent exchange with a New York City hotel. After extensive time spent researching her hotel options for an upcoming trip, she decided to book a property that was offering a rate $50 lower on an OTA site than on its own website. Preferring to book direct in order to earn loyalty points, and because we serve hotels, not OTAs, she called the hotel asking if they would match the rate that was available only on the OTA. To her dismay, the hotel denied her request; they would only offer the same rate if she booked the room via the OTA first and then filled out a in advance of her stay, which would offer her a credit.
The unfortunate, and highly ironic, moral of this story is that the hotel failed to treat a prospective guest, who is also loyalty member and brand ambassador, with the same well-considered approach that we talk about when managing your social media presence. The problem that some hotels continue to make it difficult to book direct is exacerbated by the fact that OTAs make it so easy to book and spend so much more money on advertising and technology. As they continue to capture bookings and grow their loyal customer bases, hotels remain laggers and are missing a crucial opportunity for acquiring more business. As we reported last year, J.D Power reports that customers who booked via an OTA such as Expedia were 45 points less satisfied than those who booked directly through a hotel’s site.
Accordingly, the lessons from this example go beyond learning from a botched revenue management practice. From an online reputation perspective, the ramifications of this aggrevating booking process have the same detrimental impact that a poorly managed check-in experience would. The experience sets the stage for a disappointing stay, ignores the importance of rewarding a loyal customer and contradicts the core principles of delivering exemplary customer service. We discussed these core principles when addressing how to find your social media value and are equally relevant in this instance. Whether your guest is preparing for their stay, checking-in at the front desk or engaging on your hotel’s Facebook page, he/she wants the same things:
- To be consulted about changes to your business, which makes them feel invested
- To learn information about your local area, which makes them feel prepared
- To experience personal contact with management, which makes them feel empowered
- To feel like an insider, which makes them feel special
- To have a valuable online experience, which makes them want to follow you
These are qualities that OTAs cannot deliver as effectively as your hotel’s website, social media presence or reservations team. Once they become paramount priorities at your hotel, acquiring more direct bookings will follow. Building brand advocacy and deepening loyalty has never been easier to achieve through social media; by using the same approach when managaing the direct booking process, your property will reap the same benefits and garner higher revenues to boot.