It’s an exciting time hoteliers, because hotels are making huge leaps in taking back bookings from the OTAs. According to Phocuswright, “direct bookings accounted for around 49% of U.S. hotel and lodging online gross bookings, versus OTAs at 51%” last year.
And here’s some even better news… Phocuswright predicts that direct bookings will increase to a 50% share by 2022!
Imagine, for the first time - possibly ever (since the invention of the Internet) - hotels will have greater control over their own bookings and revenues.
And here’s where a big CONGRATULATIONS is in order… each and every one of you, who have spent years developing and implementing strategies to divert bookings from the OTAs to your own website, made it happen. Your innovation, your drive, your out-of-the-box thinking has paid off, my friend, and it will continue to - if you keep up the hard work.
Not to be a Debbie Downer after all that positivity, BUT if we do want to get to where Phocuswright predicts we will be by 2022, we need to get our collective butts in gear because the status quo isn’t good enough anymore. Every year, the OTAs are innovating, growing and multiplying and our strategies need to evolve similarly.
There’s a new-ish booking channel that many hotels have not yet taken advantage of – and I believe that it will be a very important one in helping us further increase our direct bookings.
As I’m sure you already know, Google launched Google Hotels, a metasearch booking engine, which shows travelers information about all the properties in a destination including, availability and rates, customer reviews, photos and where the hotel is in relation to attractions in the destination. The platform also features a “deals” filter, which, when selected, “highlight[s] hotels where… [partners] offer rates that are significantly lower than the usual price for that hotel or similar hotels nearby.”
Google has become a significant player in the hotel (and aviation) booking game with booking solutions that give small and/or independent properties and chains more power in directing bookings to the most profitable channels.
The success of Google’s travel booking sites is a huge threat to the OTAs and their revenue model; in fact, Expedia Group’s CEO, Mark Okerstrom, admitted that the company’s biggest competitor was Google in Q4, 2018.
But how does this new channel benefit hoteliers?
I SEE YOU, YOU SEE ME
To be featured, hotels must use the company’s Hotel Paid Ads (HPA) product, a pay-per-booking property listing. Google’s HPA gives hoteliers more control over what they pay and the ROI that they earn on the channel; hoteliers can set the commission rate that they want to pay and their position in the page (search results) will change depending on their decision. As well as being featured on Google Hotels search results, the ads make it possible for potential guests to find and book a hotel room through Google Search, Maps and the Assistant.
Let’s do the math: if Google is a threat to the OTAs, that means that more and more travelers are using Google to find and book hotel rooms, every day; therefore, it stands to reason that the first benefit of Google’s HPA is increased visibility for your property to, basically, everyone, everywhere.
TURNING LOOKERS INTO BOOKERS
If a property offers a short-term discounted rate (making use of the “deals” filter), the pool of competitors (within the destination) will be smaller, giving the hotel even more visibility and an increased conversion rate, turning more lookers into bookers. And please notice that I said short-term discounted rates; you should never use discounting as a long-term strategy to increase bookings, as it’s actually doing your property a disservice in the long run. Find out why and what to do instead here.
DIRECT TO THE SOURCE
Gopakumar Menon, VP – Distribution & Revenue Management at Highgate Hotels said: “Google is probably by far the only [one] making one [sic] strides to make the independent hotel bedroom relevant”.
As Menon said, Google’s hotel booking channel is particularly useful for small and/or independent properties or chains with smaller marketing budgets: while Google’s search results do pull in rates from the OTAs and other online sites, it also enables hotels to list their property’s website as a booking channel.
The result… a proven way to boost direct bookings – especially via mobile.
Mobile friendly=Millennial friendly
La Quinta started using Google’s HPA and experienced the following results:
- A drastic increase in their mobile conversion rates (2x their previous mobile traffic)
- 1/3 of their website traffic is now coming from mobile
- Over the past three years, they experienced a 4x growth in mobile bookings, which made a significant difference in their bottom line.
So, if La Quinta can do it, you can too.