You might need a degree in craziness to understand this. The idea of book direct (#BookDirect) is not as simple as you think. There are simple things a lodging can do to encourage a guest to book direct, but what do the Online Travel Agents think about having a guest choose your website instead of theirs? This is where is becomes difficult for Innkeepers, hosts and hotel owners. Navigating the rules and policies set out there by Online Travel Agents can be full time job. Even if you think you have a rock-solid booking direct sales plan, you may be missing some important details that the OTAs have thrown out there to muddy the water of direct bookings.
Continue reading to learn about what you need to do for a direct booking plan and what OTA’s are doing to interfere with that plan.
Let’s start with the what the OTA’s are doing, because then you can see how to design a Direct Booking strategy. I truly believe one of things a lodging business needs to do to be successful, is it needs to open up all sales channels and get their name and identity out there. The Online Travel Agents are wonderful at marketing, retargeting and getting people to book any destination. A lodging needs Online Travel Agents on your side. Navigating the OTA’s is like learning a new language, once you learn the basics you can get by, but once you master it, you can truly communicate. Following are the basic things you should do regarding the OTAs in your direct booking plan.
First you need to understand that there are 3 things most OTA algorithms care about – their compensation (payment), your presentation on their website, and packages and discounts you can offer their website visitors. These three items are monitored and the OTA creates a score that determines your visibility score. As the name sounds, it means how many people they will allow to see your listing.
Each OTA has their own back-end portal that you will need to contribute content. The first thing you must understand is that Google loves content. Specialized content is king in Google searches. So, think about it, if someone wants to be a powerhouse website for selling rooms, what do they need? They need lots and lots of rooms with descriptions, and pictures and travel ideas and policies. They then stick an online payment portal on it and they are ready to go. When setting up your listing on an OTA you will need to load multiple pictures of each room, include the bathroom and any amenities in that room, even that ugly mini fridge. You need to tag and give a description for all the pictures. Also – remember these pictures must be high resolution! You get points taken off for missing pictures, or if the pictures you did enter are not clear enough. So if you are going to spend several hours posting pictures on an OTA – make sure they are good. Because the OTA’s want to make money with your property, they are willing to share all of website optimization with you – so you apply it to their website. The tutorials and guidelines they publish are actually very good and I encourage you to sign up for all online lodging blogs to learn more so you can apply it to your website. Here is Expedia’s online guide to pictures. The other part of this content creation visibility is that you will contribute content to their website by answering guest inquiries and responding quickly to reviews, the quicker you respond – the better. Literally, the clock is ticking, their technology times your rate of response. Many lodgings are very sensitive to reviews, so in my experience this has not been a major pot hole for most owners.
The second item of your success on an OTA is your packages and promotions. In each online portal there is a marketing section. The Agent wants you to offer exclusive packages and promotions to their visitors. They have even pre-designed promotions that you just have to click a box to be included in. Now this is where is gets complicated because it involves pricing. I have found that most lodging owners get confused about pricing. Knowing how low to go in your pricing can be tricky. You have to know your expenses for each room and figure out how much money it costs to actually have a guest in that room. If you have a complimentary breakfast, bottles of water, afternoon snacks and cleaning service that costs you $50.00 just to have the guest there – then you need to make sure you cover that plus keep your eye on the monthly goal that needs to be met to cover the fixed costs. Always have a sales goal and work towards it! Reaching your sales goal is important, but that is just one of the components to pricing. Once you find that sweet spot for pricing you need to keep parity on all channels. If you offer one promotion on one Agent and not another, your visibility score will be effected on the agent that does not offer that discount – this is where you need to pay attention and the idea of Channel Management comes into play. Yes, you probably have heard the words – channel and management if you have a lodging property. When channel managers came onto the scene, they were a game changer. Administrative efforts were cut in half. A channel manager combines multiple distribution systems in one place – your reservation system. The channel manager showed up in early 2000, but in 2010 the manager became part of the Property Management System – pushing rates out to all channels. The technology of connecting calendars and inventory through fast API connections caught on and several companies made different products. There are several channel managers to chose from and some are more expensive than others, but the devil is in the details when choosing one. Hence the first real problem for your BOOK Direct strategy – remember that – this is an article about Book Direct. This might not be obvious at first but when I describe it to you – you will see clearly – FOLLOW THE MONEY.
The First problem with Book Direct and OTA is compensation. Remember I told you that there are 3 items that make your visibility score on OTA’s? The compensation that an agent gets is a huge factor. In fact, if you give them enough, the other factors play less of a part in the equation. Each OTA has a compensation that they require upon signing up. There are multiple ways they ask you to increase that compensation, Expedia and booking. Com both have similar programs such as membership, hotel collect, or accelerator. Airbnb has different compensation structures also you can choose from. When you sign up to these special programs, they guarantee you will see more reservation. Perhaps you will with the added visibility, but you will pay more commission. Paying commission in my eyes is not a bad thing, a booking is better than no booking. But, again you have to know when it is too low to sell. Back to the Channel Management discussion – this is where the Book Direct thing comes into play. If you post lower rates on one agent and not another, or if you do what most lodgings do – put lower rates on your website, you can be penalized. But how does an OTA know this about the pricing, even if it is on your website? The Channel Manager is the connection that sees all pricing. When I learned that some channel managers allow OTA’s to follow guest booking searches, I was appalled. – Example – say a guest finds your property on one OTA and inquiries about a stay there, then goes to your personal website and books through your personal websites booking engine instead, then that OTA charges a commission because they state that the guest found you through their website first. Yes, this is happening.
The second problem is – now Trip Advisor is in the game. Trip Advisor in the past was not scene as an OTA, they just let other OTA’s be on their site to get your bookings. Well, they have arrived and changed the game. Trip Advisor now has Direct Bookings with Sponsored Placement. They have opened up metasearch engine options to many connectivity partners (channel Manager). Meta Search engines has been around for awhile, but not all channel managers have had the capacity to engage in the metasearch. The technology of meta search is interesting, it finds data to help people compare items or pricing. If your channel is not visible to the Meta Search technology, you can not be compared. Trip Advisor has opened up a new door properties that use compatible channel managers. The news from Trip Advisor was exciting to people like me that love channel and revenue management, but perhaps troubling to the big OTAs. They now have another competitor in the search results, and it is YOU (through Trip Advisor). Which you would think was GREAT – but wait, remember that parity thing? If you display a lower rate on this metasearch – you will be penalized in the OTA – therefore endangering bookings that OTA could have sent you. Also, please note that MetaSearch is a pay per click service , it is not free. The funny thing here is – remember that Book Direct campaign you are designing, well, with this new service, you could potentially do pay per click directly against Expedia, Booking. Com and your own website. Trip Advisor may have a Book Direct button to your website, but it is a separate account in the pay per click. You are paying them to represent you. But, you already represent yourself on the web – you are now competing with yourself. If you google you lodging listing, there is trip advisor in the search results. If someone goes to their site instead of your yours, you will pay, maybe not a commission, but through your TA Business Listing and the cost of the Pay Per Click Campaign. You really need to do the math here to see if having a $300.00 a month Pay Per Click Campaign (which is modest budget in Pay Per Click), plus the cost of the business listing a year. What percent are you paying and does it make sense? Learn more about the Trip Advisor Connectivity Partnership. https://www.tripadvisor.com/TripAdvisorInsights/w5300?mcid=64637
What do you do?
How do you encourage direct bookings, play nice with all the OTAs and keep those reservations flowing in from everywhere? Here are my recommendations for a successful Booking Direct strategy. Optimize, Optimize, Optimize. You need to optimize your website and your OTA listings. Fill your website with lots of content and find ways of coming up in organic searches for many different relevant searches. Have an obvious and easy Book Now Button. Obey all the rules of the OTAs and keep parity. Read all OTA programs and policies and find out what commissions you are paying. Direct Bookings will come when you develop your brand and people look for you specifically. Develop your brand by content on your website and find ways to get stories in publications. In addition to that, create lots of Promo Codes. The promo codes are going to be what sets you apart from the OTA’s – to date, the OTA’s do not see your Promo Codes. The promo codes are where the Direct Booking Discounts can be reserved for your website visitors only. Be creative. Property management systems have evolved to make it easy for you to create Promo Codes. In addition to these, be social on social media. Remember everyone likes to do business with companies that they know, like and trust. Lastly, be in constant contact with your guests. Reach out to them with a newsletter and promo code announcements.
Hopefully this article has enlightened you a little bit more about Booking Direct Strategies.
If you would like to learn more, please continue perusing this website or give me a call.