What's the future of Direct Bookings?
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Did Hilton succeed in convincing consumers to “Stop Clicking Around?”
Did Marriott prove “It pays to book direct“?
According to a new report from Kalibri Labs, they certainly did.
The Kalibri study looked at data from May to December 2016: not only did the campaigns encourage consumers to book direct, but the study also found that these campaigns were more beneficial for hotel owners than previously assumed. The hotels’ direct-booking campaigns — even by offering discounted rates to consumers — were actually generating more revenue for hotel owners than the online travel agencies were.
Kalibri Labs found that the net average daily rate of brand.com discounted loyalty rates was higher than the net average daily rate of room rates on the online travel agencies.
But now what? Will we have to continue to offer discounted rates forever more to keep them interested? Cutting the price will lead to a shift of share of short-term business. But long term, it’s not a good strategy.
That’s where loyalty comes in, not just points-based programs, but the benefits that travelers get from joining these programs, and the impact they have on their hotel selection decisions.
If discounted loyalty rates are not a sustainable strategy for getting consumers to stop clicking around and book direct, then what is? Paying more attention to the entire travel experience — not just the hotel stay itself — is crucial.
Customers today are increasingly wanting to not be surprised. Guests are looking for features like the ability to choose a specific guest room, to check in on mobile, to use their phones as hotel room keys, and to know their favorite beverages are in their room.
Hotels can control all that. OTAs don’t control the rest of the guest experience after they sell them that room. Hotels need to control the actual guest experience so they really have loyalty.
Hotels will have to maintain that experience not only inside the hotel but also outside the hotel. You need to have a personal concierge on your travels. That’s traditionally what a hotel concierge did. But we have to take that physical experience from the old days and turn it into a virtual one today.
That focus on how digital technology can enhance the actual traveler journey is where hotels need to direct their investments toward.
It it’s not going to be a benefit in the form of a discount [in the future], there are lots of benefits that come from using an app to do mobile check in or use keyless entry. Those are terrific benefits for consumers whether or not they are frequent travelers.
Hotels need to make investments in technology and training and customer relationship management tools and remain relevant if they want to preserve market share and grow it back.