Bad news for the OTAs — A bright future for direct bookings
Over the last decade hotels have struggled to compete with the OTAs. Guests have been led to believe the OTAs offer the best rates, but now that perception is being pulled under the microscope.
An investigation has been launched by the Competition and Markets Authority (CMA) to find out if online booking sites are misleading travellers. The CMA say they’re concerned about the accuracy and clarity of the information presented.
They also fear the OTAs’ selling practices could in fact be stopping guests from finding the best deal and could be in breach of consumer law.
The investigation is set to explore four key areas.
- Search results — How hotels are ranked in the results after a guest searches for a particular location. The CMA wants to know if search results are influenced by hotels who pay the OTAs more for better rankings. They’re concerned this practice may be giving guests less relevant results for their requirements.
- Pressure tactics — Whether the OTAs are misleading guests around room availability or hurrying guests into making a booking decision. Practices such as x number of people are looking at this room, x number of rooms left or last-minute price drops are under scrutiny.
- Discount claims — Whether the OTAs discounts offer accurate comparisons. For example, whether discounts are based on higher prices that were only available for a brief period. Or results not relevant to the guest’s search query, such as comparing weekend rates with weekday rates.
- Hidden Charges — Lastly, the CMA will investigate whether the OTAs are displaying the overall cost to guests up front, or if travellers are later faced with unexpected fees such as booking fees and taxes.
The OTAs have spent billions on forming marketing and selling practices that attract and convert guests.
And clearly it’s working!
Hotels have been at the OTAs mercy for a few years, but that may be about to change.
What could this mean for hotels?
Lower commission rates
Currently, if a hotel lists their rooms on an OTA, they pay at least 15% commission for every booking. But in some cases hotels will pay more for greater visibility.
The CMA are concerned by this practice because those hotels paying more may not necessarily be the best match for a traveller’s search query. They fear the OTAs are more concerned with maximising profits than better serving their users.
If the CMA were to abolish this practice, every hotel would be on a level playing field. With the OTAs competing against each other, this could see commission price drops as they try to differentiate themselves.
Guests take their time to book
Without urgency tactics designed to rush guests into booking, travellers will feel able to shop around. They won’t feel pressured into booking immediately to get the supposed best rates.
They may start their booking journey on an OTA, but the absence of time-sensitive deals leaves travellers more time for research. They may be more inclined to check out the hotel website or the location to find the best fit for them.
With more time for guests to engage with your hotel, owners can focus on perfecting their own marketing strategies while communicating why guests should book direct.
What can you do to win more direct bookings?
A strong direct booking message
What benefit do you offer guests when they book direct? If this isn’t clear on your website how will guests know they’re getting the best deal through you…
The Marriott’s direct booking message is a fine example with their campaign ‘It pays to book direct.’ This slogan is prominently placed on their homepage along with the key benefits, such as a best rate guarantee, free WIFI and rewards member rates.
They give guests three distinct reasons to book direct and they’re not shy to shout about it.
Think about the messaging on your website and whether you’re giving guests a real incentive to choose you.
A straight-forward booking engine
A large part of the OTAs’ success is their fool-proof booking engine. Guests can book a trip in a few clicks and they often have auto-complete functionality that fills in your details as you type.
This all makes for a swift, hassle-free booking experience that guests can complete in seconds. If your booking engine asks for unnecessary details and takes guests through pages of forms to fill in, you’ll lose them at the last hurdle.
All that effort to create an enticing direct booking message will be wasted. You may have the best deal, but bad booking forms are infuriating. Guests already know the OTAs can get the job done in no time.
Take time to review your booking engine against the OTAs and see how you compare. Trial test both with a friend. Evaluate the time it takes and monitor their frustration levels.
Leverage social and email
People who follow and engage with you on social media are already interested in what you offer. Unlike Google where the OTAs dominate searches, social media allows you to build a real and engaged community around your brand.
And with a strong message you can increase your visibility and cut out the middle man.
To grow your reach and keep your followers engaged, share stories about your hotel and guests regularly. Show people the experiences they can live and let your direct booking message do the rest.
People on your email list will likely be guests who’ve already visited your hotel. Whether they booked through the OTAs or not, you can use your email list to maximise profits through subsequent visits.
Create a series of emails to nurture past guests. Show them why they should return through upcoming events, special deals, latest news about your hotel, new menu releases, refurbishments and more.
Too many hotels put all their focus into acquiring new guests, when happy previous guests can be an easier source of revenue. If they had an unbelievable time, they may just need a little reminder and an incentive to book again.
We’re keeping our eye on the developments of the OTA investigation. For too long they’ve been a blessing and a curse for independent hotels, and we’re glad we could soon see some balance restored for the hotel industry.
