For a hotel, the main source of revenue is room sales. Various department heads get together to form strategies to optimize room sales. One such strategy is to sell rooms via Online Travel Agencies or OTAs. These OTAs generally contribute about 10 – 20% of overall room sales whilst charging anywhere between 15-25% commission per room sold. With the entry of metasearch engines like Google and Apple in the near future, hotels will have to spend even more to sell their rooms online. The immediate challenge is to encourage customers to book directly with the hotel.
Let’s assume that the hotel has a responsive website that attracts visitors and encourages them to spend time there. Now comes the main challenge of convincing them to book via the hotel website instead of an OTA. The common perception is that price is the main factor influencing customer decision making but there are other perks that hotels can offer to encourage direct bookings.
Software Advice, a website for hotel software reviews, recently conducted a survey of 2,500 consumers to find out the incentives/perks that would encourage them to book directly with the hotel. In his report (published on the hotel management blog – Overnight Success), analyst Taylor Short noted that a complimentary room upgrade is the top incentive for consumers to book directly followed by free food and drinks (either at the restaurant or from room service.)
The following graph illustrates the customer preference for various incentives that can be offered by a hotel.
As illustrated in the graph, a room upgrade is preferred over other incentives like free room service, on-site amenities or gift cards, etc. The room upgrades can vary from a higher room category to a room offering a better view or equipped with a kitchenette.
The marketing department should ensure that all the media (website, social media, newsletters, emails, etc) used to communicate with guests highlight these incentives. The hotel website home page should be regularly updated with the latest offers.
Depending on the availability, a hotel can offer various incentives for on-site amenities as part of the booking process via their website.
Hotels can offer a breakfast inclusive room rate which is very important for a majority of guests and is a relatively low cost for the hotel to incur. Alternately they can also promote complimentary meals for kids which is an attractive offer for families.
Complimentary spa treatments is another popular incentive along with complimentary access to the gym and fitness classes. If the hotel has a tennis court or golf course, complimentary coaching clinics can be offered.
Another key incentive that hotels can offer is a concierge service. The concierge can procure complimentary/discounted event tickets, inform about and make reservations at local restaurants, arrange transportation and assist with any special requests during the stay.
To conclude, there are a lot of incentives that a hotel can offer in order to encourage customers to book directly via the hotel website. The incentives can range from room upgrades to free meals or spa treatments. The end result should be an increase in direct bookings/revenue and a decrease on the dependence on OTAs.
The study by Software Advice can be accessed here: