When OTAs like Expedia and Orbitz entered the scene, they whisked the travel industry off its feet, giving hoteliers visions of a utopia where the playing field was leveled and marketing came easy, and travelers a seemingly endless parade of hotel choices at cut rates.
OTAs do provide exposure for hotels on a huge level. More exposure, more occupancy, more new guests, more discounts for travelers. It all sounds great, right? Not necessarily.
While hotels gain exposure, they take a bit hit in their revenue. For an independent hotel, OTAs typically take 15-30% of each booking. Paying a 25% bounty for a new guest makes sense. However, when hotels continue to pay that on the guest’s second, third, or fourth visit, they start to really feel the pain.
This is especially problematic for independent hotels because OTA bookings make up a bigger share of their mix than the chains. (16.2% for independents, opposed to 6.8 for chains). Why the disparity? Historically, independents haven’t had the biggest carrot that leads travelers to book direct—loyalty points.
In fact, loyalty program members account for nearly 80% of all room nights booked through a hotel’s website.
OTAs v Direct: The Traveler’s Experience
From a traveler’s point of view, booking through an OTA appears to make no difference. They see the same prices on your site as they do on the OTAs site. It’s apples to apples for them (and hotels are contractually obligated to give the OTAs your apples at the exact same price).
A “King Guest Room” is a “King Guest Room” no matter how you book it, right?
Travelers have everything to gain by booking direct. How do you motivate guests to bypass the middleman? Educate them about the advantages.
Direct Benefit #1—Loyalty points: It doesn’t matter if it is Stash Rewards, Hilton HHonors, Marriott Rewards or any other hotel loyalty program, if you book through an Online Travel Agency (OTA), you don’t get points.
Direct Benefit #2 — Spend money within the local community: A lot of people prefer independents because they want to contribute to a community rather than a massive corporation. The independents are the people making that neighborhood great—many are leaders in their communities. So by booking with an OTA, 20% of that revenue is being taken completely out of that community.
Direct Benefit #3 — Brownie Points: OTAs aren’t fluffing pillows, pouring nightcaps or giving wake up calls — the hotel is. Booking direct lets travelers put their money where it belongs, with the folks taking care of them. Cutting out the middleman saves the hotel beaucoup bucks–an action that does not go unnoticed by hotel staff. With only one upgrade available, a front desk agent is going to hook up the direct-booker over the OTA-booker, every time. Early check-in requests? Hotels will try to accommodate every request, but direct bookers often float to the top of the list.
(Of course, every Stash partner hotel will go out of their way to delight the every guest. It’s the standard of service that unites these independent hotels.)
Direct Benefit #4 — Flexibility: When you need to make a change to your reservation, who would you rather talk to: the OTA’s 1-800-Robot (Please speak your 27-digit reservation code so we may assist you…. I’m sorry, I didn’t understand that. Please try again)? Or a friendly human who can actually assist you?
Direct Benefit #5 — Get Personal: When booking direct, you can make sure the hotel knows you need adjoining rooms on a high floor, or that they are allergic to down and require foam pillows. Or maybe they just need a framed picture of bacon. No matter what you need or want, a direct booking is the surefire way to get a tailored experience.
So next time you travel, go direct to the source. Like fresh flowers and fresh food, it’s just better. And if you’re running an independent hotel, leverage your loyalty program! Points are magic. Guests want them, and points present an easy way to introduce your guests to the advantages of direct booking.