Despite owning zero real estate and having no experience running a property, online travel agencies are a force in the hotel industry because they continually refine an online shopping experience that consumers like. The OTAs’ innovation in ecommerce rapidly changes consumers’ expectations. If a hotel isn’t converting enough traffic on its website into direct bookings, and if it’s losing that business to OTAs, that hotel needs to take a hard look at the booking path it’s offering.
Hoteliers are aware of what the OTAs do well. Expedia, Priceline, and others offer more choices in accommodations, and the process of searching to instantly booking can be done in just a few clicks. Like hotels, they’re working overtime on trying to introduce more personalization and contextualized offers into the mix.
To keep up with consumer expectations, hotels’ websites also need to be fast and remove as much friction from the booking experience as possible. However, this doesn’t mean that hotels should try to emulate everything an OTA does. Mimicking the Expedia booking experience, then trying to add a little bit of incremental value somehow, isn’t a winning long-term strategy. That will result in value imitation, not value innovation. The key to long-term success is to run the best brand.com possible and find ways to optimize that shopping experience.
Hotels aren’t going to build a better booking experience than the OTAs’ with breadth, but with the depth of their knowledge about guests. Hoteliers know much more about what their guests really want and what really moves the needle with them. That includes knowing how aggressively to yield room rates without losing bookings, as well as being able to put together the right packages, upsells, or rich content that also drives conversion on direct channels.
New analytics solutions also give hotels a deeper profile of first-time shoppers on the properties’ direct channels, increasing the chances that the hotel can offer a personalized price or package, even to an unknown guest, and secure that booking for a better profit margin than it would get relying on an OTA to bring in a new customer.
The potential benefits of personalization are significant. Phocuswright recently found in a joint study with Google that travelers want more personalization from hotel and airline brands—and that more than one in three consumers are willing to pay more if a travel brand does use personal preferences and past behavior to tailor rates and content to their specific needs. For example, if a hotel knew that the person searching on its website for a two-night, midweek stay was a good candidate for an upsell into a suite, the hotel could move the suite, rather than a king room, to the top of the sort order and tailor the price to something enticing and likely to convert. If hotels can serve up premium rooms and packages for the right guests in the moment that consumers are looking and possibly booking, then hotels wouldn’t have to sell those rooms for half off using platforms that they don’t control.
Knowing the competition is not the only way hotels should frame their battle against OTAs for bookings. Lodging brands should know their customers above all, and use those insights to optimize their direct channels.
About the Author
Patrick Bosworth is CEO and a co-founder of Duetto, a hotel revenue strategy technology company based in San Francisco.