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Loyalty Pricing Should Be Weapon of Choice Against OTAs

Loyalty Pricing Should Be Weapon of Choice Against OTAs

The last time I saw it, Hilton Worldwide’s marketing campaign could not have been placed any better for me to argue that hotels’ new industry-wide focus on loyalty pricing and direct booking is exactly what’s needed for an anxious travel consumer.

One of Hilton’s “Stop Clicking Around” banner ads popped up as I was navigating my way through Spotify’s endless catalogue of songs to search for something to listen to. On a platform where I can wade through hundreds of music choices—or have an algorithm curate a playlist for me based on my past behaviors—came the hotel company’s ad that proposes, “We have exactly what you want for the best price, so don’t waste time shopping around.”

The prevailing conventional wisdom is that we’re in a period in the travel industry when the consumer is king. Having built legacy properties on the best street corners in tier-one markets, the major hotel brands now are developing soft brands and boutique flags meant for niche audiences. Online travel agencies and metasearch sites can produce hundreds of search results instantly. All platforms strive to be a one-stop shop for consumers—TripAdvisor adding Instant Booking is a great example.

With so much data and so many choices available, consumers are more empowered than ever, the thinking goes. But I see this landscape of proliferating hotel brands and distribution channels, and I conclude something a little different. Finding more search results and booking options than they can count doesn’t liberate consumers; it overwhelms them.

Some recent research bears that out. A March consumer survey from hotel industry digital-marketing firm Fuel found that travelers’ distrust in OTAs increased 50 percent compared with a year earlier. That study also found that consumers are visiting fewer websites to research, plan and book a vacation. While Google recently claimed that many consumers search for travel arrangements on 20 or more websites, the Fuel survey pegged the number of sites at about 10 or fewer for the vast majority of leisure travelers.

The overabundance of choice turns up the pressure on many consumers who feel anxiety over finding the best deal and who can never be convinced that they did enough research to avoid overpaying somehow. Other travelers are rightly concerned that they’re not entirely safe from getting scammed—which, according to another LODGING report, affects as many as 15 million hotel bookings per year.

This moment, when hotel loyalty is at the forefront of consumer-facing ad campaigns and leading the agendas at board meetings for both hotels and OTAs, is a perfect opportunity for hotel brands to reassure a relatively anxious consumer base. Hilton actually makes the case explicit with its marketing slogan, “Stop clicking around.” Put another way, the hotel chain is saying, “We promise you don’t need to comparison shop; you’ll get the best deal by booking direct on our website.”

What’s implicit about that marketing proposition is everything inherent to our roles as hoteliers in providing hospitality. Once hotels convince guests that they truly did get the best possible deal for the least possible hassle by booking direct, the properties need to make their guests’ lives easier through outstanding service, attention to detail and impeccable housekeeping. During and after the stay, the hotel should tailor marketing messages and ancillary offers that resonate with guests.

A hotel has the luxury of focusing on its core customers and making the effort to show those guests how highly they’re valued. Direct-booking offers are a smart move, but all brands should be thinking of ways to make every guest feel like the hotel’s No. 1 pick for guests, in an environment of endless choice. I suspect that many consumers would return the favor.

About the Author
Patrick Bosworth is CEO and a co-founder of Duetto, a hotel revenue strategy technology company based in San Francisco.

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