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Only The Digitally Savvy Will Survive!

May 21, 2016 Headline News No Comments Print Print Email Email

IMG_0170There is shifting among the channels in the hotel booking landscape driven mostly by hoteliers fighting to regain control of distribution and sale of their inventory.  

In September 2015, Sprint Metrics reported that 50% of business travellers and 33% of leisure travellers prefer booking through online travel agencies (OTA) to booking directly with a hotel[1]. Corporations started moving away from contracts. Instead, they were booking through OTAs which gave travel managers greater control over procurement protocols, greater flexibility and choices for travellers. This obviously did not sit well with hoteliers who started fighting to regain control over online bookings.

Evolution of online hotel bookings

In 2009, OTAs had a billboard effect for hotels. At the time, a study on Expedia and JMH hotels by Cornell University associate professor Chris Anderson, showed the presence of a hotel on the first page of results on Expedia coincided with a rise in reservations through the hotel’s own website.

By 2014, that was no longer the case.

A study of 50,000 online travel shoppers in 2014 found that users who browsed hotel sites tended to completed their bookings via intermediaries, such as Expedia, Booking.com, and TripAdvisor. But those who browsed on OTAs and intermediary sites would complete their bookings through intermediaries[2].

By 2015, it was clear that intermediaries were having a detrimental effect on hotels.


 The Balancing Act

Hoteliers are now caught in a balancing act. On one hand, OTAs undoubtedly make distribution of hotel inventory easy and keep rooms filled. However, the more rooms that are booked through the OTAs, the less profit a hotel makes.

Jean-Luc Chrétien, Co-CEO of FASTBOOKING says “The risk for a hotel is of losing control over its clients and then essentially becoming a room provider, amongst other issues of course.  Consequently, the hotel will lose its brand equity, the risk of which increases exponentially as its dependency increases on OTAs.”

Building a take-back strategy

FASTBOOKING is offering a crash course in ‘taking back the power’. An e-commerce solutions company that helps hotels create direct sales strategies, the FASTBOOKING Digital Lab aims to educate hoteliers on how to use several vendors to affordably and effectively achieve direct bookings online.

“The interest in maximising direct bookings is growing among hotels in Asia,” says Pierre Charles Grob, Managing Director – Asia, for FASTBOOKING.

Attracting Qualified Prospects to the Hotel Website

“Hoteliers have to protect their hotel brand on search engines. That can easily be done with search engine marketing techniques which is one of the services that FASTBOOKING offers.”

Other tips for attracting qualified prospects include promoting visibility by utilising metasearch engines and to be easily located geographically.

“Geo-IP targeting campaigns, for example, is an excellent way to attract last minute bookings. It is surprising how many people head straight to a destination without booking a hotel in advance. They turn up, switch on their mobile to look at their closest options, then book. Geo-IP targeting means that the hotel appears on the radar of consumers like these,” said Grob.




 The importance of content

Website content not only attracts, but keeps visitors on your website.

Brice Bay, a co-founder and the CEO of EnVeritas Group said hotel websites should contain at least 50-100 photos.[3] Event-based information should be updated daily. Important also is current local knowledge and factual information that is free of marketing jargon.

Improving the user-experience on a hotel’s website

 “The best hotel websites are clean and simple to use,” observes Jean-Baptiste Kechi, Website Studio Director for FASTBOOKING in Asia. His tips? Make the website efficient and mobile-friendly.

Building e-Reputation to earn conversions

“Reviews are critical to a hotel’s reputation online,” says Frederick Wong, Managing Director and Vice-President, APAC for TrustYou. “Travellers are 3.9 times more likely

to book a hotel with higher review scores within the same price range.”

“The average e-commerce conversion rate is 2.6%, but a high-performer can exceed 4.5%” says Christine Tan, Vice President of Sales and Account Management, Asia Pacific, for FASTBOOKING. “The best things for a hotelier to do to convert sales on their website is to offer the best deal on their website, keep the last room available for their website, and make it very visible that the best rates are only available on their website.”

Tan says sales tools on a website which offer reassurance to the prospect, such as multiple languages and currencies, live customer support on a chat platform, along with SSL certificates on the booking page.

How revenue management can impact conversion

“To set the best possible price to aid conversion, yet be profitable, hotels need to put several processes in place,” says Rachel Grier, Managing Director, Asia Pacific, IDeaS Revenue Solutions.

“Integrating, centralising and organising your data will help you better understand the micro-details needed to establish a successful pricing strategy.”

“Brand perception is also important. By using data to understand the perceived value of your brand, you can determine how impactful your pricing is and create guest experiences that differentiate your hotel from your competitors. Focusing efforts around increasing brand value helps hotels avoid racing to the bottom of the price ladder.”

PC Grob Picture

PC Grob Picture

Hoteliers are turning the tide with a fight for independence

Big hotel chains have started fighting back. Marriott started a social campaign, # itpaystobedirect; Hilton, Hyatt, IHG launched initiatives using their loyalty base to protect their web direct share. Accor aggregated its hotels, along with independent hotels into the Accor Marketplace.

Consequently OTAs will turn against independent hotels to continue to protect their margins and their growth. Expedia[4] recently came out with guns blazing in the shape of an infographic which describes, according to skift.com, “how hotel owners would be taking a revenue hit of around eight percent because of chains’ decisions to publicly offer hotel loyalty program members lower rates on hotel websites than they give to Expedia.”

Chrétien concludes, “Competition is stiff for hoteliers. They must keep their capacity to invest in their property while maintaining a direct relationship with their customers in order to thrive in the long term. Independent hotels no longer need the means of big hotel groups to keep and develop their direct web revenue. To ensure their survival they have to protect their own turf.”

[1] TravelPulse – Why Are More Hotels Heavily Promoting Direct Booking Today?

[2] tnooz.com –The Billboard Effect is dead, says a study of hotels listed on OTAs 30 July 2015

[3] Hotelmarketing.com: How hotel images impact OTA bookings and revenue 10 May 2013

[4] skift.com: Exclusive: Expedia Argues That Hotel Owners Are Losers in Direct-Booking Push, 21 April 2016

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