- Monday May 2nd, 2016
- Posted by: John Kearney
- Category: Market Trends
Over the past few months, we have started to see a shift in sentiment and resources from the major hotel chains to encourage their clients to book directly. Loyalty programs that were once afterthoughts and in some cases did not have any meaningful benefits to its members are starting to be restructured to encourage and help guests, that chose to book from the brand website. Over the past year, we had begun seeing compelling new ads from the chains actively seeking this, when once they were slightly cautious of going up against the all powerful Priceline & Expedia. So much so that the former CEO of Priceline recently came out with warnings for the major chains, focusing on getting their guests to book directly, clearly a nerve has been touched.
Changing Times ahead
Hotel chains are focusing on direct bookings is due to a variety of reasons.
- Lower dependency on OTA´s
- Competition by OTA´s on loyalty programs,
- Millennials – with up to 64 percent stating that they sometimes book directly on supplier sites (Source: Phocuswright).
- More and more Business travelers are booking direct, 39% in the UK 33% in France and 35% in Germany and
- Potential threat from Airbnb.
We also see chains like Accor, openly targeting independent hotels to join their franchise programs. With the technological purchases of companies such as Fastbooking they have made over the last 12-18 months, can now offer a credible offering to independent hotels looking to compete in the online travel space. Accor´s CEO interview late last year is a compelling read
As consolidation within the hotel industry continues apace, Marriott´s & Starwood merger can now offer the biggest selection of hotels who can benefit from their revamped loyalty program which drives direct bookings. We are starting to see that not only loyalty program members getting free nights and other perks, such as free high-speed WIFI but also it allows the hotel chains to personalize pricing and marketing too.
Expedia must have seen the writing on the wall by the fact that Hilton & Marriott recent agreement with them no longer guarantees Last room Availability as well as a reduction in margins. This has allowed the chains also to be bolder in actively targeting direct bookings.
Age of dependency for Independent Hotels
So for the independent hotelier, as I covered in a previous article are still sleepwalking into an age of increased dependency. This though can be reversed if you take heed and start to learn from the chains, who are starting to take the OTA´s head on as well as introducing common sense practices to increase your direct bookings.
In reality, it could well be as loyalty programs become stronger along with the immense driving power of Marriott and their investment in content marketing strategies as well as personalized marketing, for some hotels in particular locations, joining as a franchise hotel to a chain could become the straightforward choice.
But what about if you want to remain independent, to provide that unique personal experience and differentiate from the rest?
Then your choice could not be simpler. You as a hotel have to map urgently out a clear marketing strategy that includes the answers to the following questions:-
- Can Users find me online?
- Does my web make it easy for a guest to book me?
- Am I capturing guest data in the right way?
- What am I doing to promote my brand online?
- How to I communicate with my guests?
- What incentive do I offer them to book direct?
- What am I doing to convert OTA reservations into Direct ones?
Where I believe hotels, in general, have failed to do is to create value for their customers in the way they find you online and booking process for hotel rooms, with many solutions still aimed at appeasing the revenue manager rather than the client.
If hoteliers are going to start to turn the dial away from increased dependency, they firstly have to connect with guests and connect with the non-residents who already have an existing relationship with your hotel. Technologies like Social WIFI and concierge apps are excellent tools in this area.
Talking with a host of general managers, it is clear they pride themselves on the quality of service they provide to their guests. It is something in their DNA which keeps them at the hotel to ensure that the Wedding or events goes off without a hitch and view those smiling happy faces of the participants. Where independent hoteliers have failed though is showing the same pride for the first impression your give to any prospective client and which more and more of your guests are using – ONLINE
The Major chains are starting the fight back, keep paying attention and learn how your hotel too can start moving the dial back in your direction, or risk becoming even more dependent on intermediaries and probably even irrelevant in the future.