Tech Brings Bookings Back Home
For many hoteliers, online travel agencies (OTAs) present an efficient way to fill rooms that might otherwise have remained empty. However, high commissions collected by third-party players, coupled with a desire to foster customer loyalty by engaging more closely with guests, are compelling hotel operators to free themselves from OTAs and bring bookings “back home” to branded websites. In doing so, hotels are regaining revenue and most importantly — guest data.
“Increasingly, both small independents and large hoteliers are focusing on solutions, data, and analytics to shift away from OTAs and toward direct bookings,” says Evelyne Oreskovich, president and founder of hospitality consulting firm Hospitality eResources, adding that 2017 will be a banner year for such activity.
Key strategies for maximizing direct bookings and minimizing dependence on OTAs include leveraging reservation management systems (RMS) and booking engines. To this end, some hotel operators are integrating their RMS and booking engine with the property management system (PMS) and/or central reservations system (CRS). Sources say such a move makes the direct booking process more seamless for potential guests (a must to incentivize them to eschew OTAs in favor of reserving directly with hotels), and it condenses it to create and promote last-minute, on-the-fly offers that are as appealing as, or more attractive than, those available through third-party channels.
Vintage Hotels, which operates a total of 10 properties in Canada under the Vintage moniker as well as under the Niagara’s Finest Hotels umbrella, recently began phasing out its OTA relationships and now works with only one such entity. Michelle Miller, corporate director of revenue, attributes the change to the integration of a Maestro Enterprise Property Management PMS solution installed at six Vintage Hotels and three Niagara’s Finest Hotels properties with a ResWave booking engine. Both Maestro and ResWave are offered by NORTHWIND.
The integration allows accurate real-time rates (adjusted based on load), availability, and room inventory information to stream automatically from the PMS to the booking engine, facilitating the reservations process and ensuring that prospective guests are offered the best possible room rate. It also enables users to make reservations for on-site activities and packages like spa experiences and dining, an option not possible through OTAs.
“The ease of the direct booking experience, the additional booking ‘perks,’ and the access to rates that compare favorably with OTA rates,” as supported by the integration, “have enabled us to achieve a 50:50 split between OTA and direct bookings online, far more than before,” Miller notes.
She adds that the integration will eventually permit Vintage Hotels to sever its remaining OTA relationship, resulting in significant savings on commissions. Guest data gathered during the direct booking process such as activity and dining preferences, will be utilized as the basis of future promotional offers intended to improve guest loyalty and bolster revenues.
In another twist on harnessing reservation management systems to up the direct bookings ante, the Jupiter Hotel in Portland, Ore., tweaked its Vertical Booking central reservations management system from Vertical Booking USA to stop accepting OTA-initiated bookings once a pre-set occupancy level was reached. Direct booking then becomes prospective guests’ only option.
“For example, if I know that I always get 15 direct bookings for any given date in the week leading up to arrival, once we reach 15 available rooms within that seven-day window, the software would automatically shut those partner channels off,” explains Nick Pearson, assistant general manager. Pearson says the ability to divert bookings from OTAs in this manner has significantly increased the Jupiter Hotel’s direct bookings volume.
Easier Bookings, Better Rates
Website enhancements can play an equally significant role in helping hoteliers to cultivate more direct bookings and reduce reliance on OTAs.
Savvy hoteliers are optimizing their websites to make the direct bookings process easier and more compelling. For Residence & Conference Centre Niagara-on-the-Lake in Niagara-on-the-Lake, Ontario and Residence & Conference Center in Welland, Ontario, a booking widget on the homepage is a key to driving direct group bookings, reports Mike Parente, sales and conference manager. The widget is a component of TheBookingButton, SiteMinder’s booking engine. Positioning the widget on the homepage, rather than forcing users to click several links or peruse multiple pages before giving guests an opportunity to secure a booking, led to high double-digit increases in group business. The widget displays promotional codes making the idea of direct online booking even more appealing, Parente notes.
In addition to booking widgets on homepages, hotel operators would do well to configure websites so that a pop-up message appears when visitors appear to be “signing off” without making a reservation, Oreskovich says.
“Many of our clients have had success with pop-ups that say something like: ‘Don’t go. Your best rate is here!’ or even pushing an offer of a better rate than the one that was first presented,” she adds.
Similarly, some hotels follow a practice of optimizing rates and/or creating special “book now and save” offers that emphasize a similarity between hotel and OTA tariffs, then promoting them online. According to Taylor Short, hotel market analyst for software advisory firm Software Advice, an even better strategy is to offer value-adds only to consumers who book direct: free Wi-Fi, complimentary breakfast, or a room upgrade. According to the findings from Software Advice’s Direct Bookings report, 48% of consumers would “likely” book a hotel stay on the property’s website rather than through an OTA in return for an offer.
“Travelers’ behavior is a tough thing to change,” Short observes. “They’re so used to searching online travel agency sites because they believe that’s the only location to find great deals. [Calls-to-action and pop-ups] are an opportunity for hotels to educate current and future guests that they can find more value with compelling add-ons. They don’t cost the hotel much, but provide real value for guests.”
Red Lion Hotels Corp. utilizes its Duetto Research GameChanger revenue management solution to personalize web offers that feature best rates intended to entice guests to veer off the OTA bookings path, reports Bill Linehan, vice president and chief marketing officer. The solution has a pricing engine component that calculates individual “loyalty pricing” based on such factors as guest spending and potential contribution to the bottom line, as well as market demand.
“If hotels can bring together revenue management systems, booking engines, and PMS and have them all work toward a common goal, that’s how they can be agile enough to drive direct business,” Linehan asserts. “It’s also how they can provide a booking experience with less friction that can compete with the OTAs. But what gets guests coming back to our direct channels is that they know they can find the best offers and rates with us, rather than search for hours on the OTAs.”
The GameChanger technology also permits Red Lion to derive and promote its “best rates” and, in turn, drive direct bookings without sparking bottom line erosion. For instance, it no longer employs fixed modifiers to differentiate rates assigned to individual types of rooms (e.g., those with one king bed versus those with two double beds) in individual hotels. Instead, rates depend on demand for a particular type of room in a particular market. Rather than using a static percentage off BAR, the chain is more fluid with its discounts, altering them as demand — tracked by the system — dictates. An alert functionality makes management at individual properties aware of sudden changes in demand, so that they can respond to market conditions and adjust prices to maximize revenue.
Red Lion has also begun to utilize predictive analytics to encourage direct booking, primarily under the umbrella of experimenting with different rates to see what “sticks.” With GameChanger as a vehicle, the chain looks not only at its own historical information, but also third-party data that impacts demand; for instance, air traffic into a particular city. Lost business data from the booking engine is also analyzed. Management can see which prices drive conversion from guests searching the website, to actually booking a room instead of jumping to another hotelier’s webpage or to an OTA.
“The ability to understand potential customers’ price sensitivity and elasticity is crucial, because it opens up the whole range of price points that will still appeal to guests — but provide the desired profitability attainable through direct booking,” Linehan concludes. “Knowing the whole picture gives our revenue managers the confidence that they can push rates during peak-compression periods and still attract our share of direct bookings and keep them healthy.”
“Increasingly, both small independents and large hoteliers are focusing on solutions, data, and analytics to shift away from OTAs and toward direct bookings,” says Evelyne Oreskovich, president and founder of hospitality consulting firm Hospitality eResources, adding that 2017 will be a banner year for such activity.
Key strategies for maximizing direct bookings and minimizing dependence on OTAs include leveraging reservation management systems (RMS) and booking engines. To this end, some hotel operators are integrating their RMS and booking engine with the property management system (PMS) and/or central reservations system (CRS). Sources say such a move makes the direct booking process more seamless for potential guests (a must to incentivize them to eschew OTAs in favor of reserving directly with hotels), and it condenses it to create and promote last-minute, on-the-fly offers that are as appealing as, or more attractive than, those available through third-party channels.
Vintage Hotels, which operates a total of 10 properties in Canada under the Vintage moniker as well as under the Niagara’s Finest Hotels umbrella, recently began phasing out its OTA relationships and now works with only one such entity. Michelle Miller, corporate director of revenue, attributes the change to the integration of a Maestro Enterprise Property Management PMS solution installed at six Vintage Hotels and three Niagara’s Finest Hotels properties with a ResWave booking engine. Both Maestro and ResWave are offered by NORTHWIND.
The integration allows accurate real-time rates (adjusted based on load), availability, and room inventory information to stream automatically from the PMS to the booking engine, facilitating the reservations process and ensuring that prospective guests are offered the best possible room rate. It also enables users to make reservations for on-site activities and packages like spa experiences and dining, an option not possible through OTAs.
“The ease of the direct booking experience, the additional booking ‘perks,’ and the access to rates that compare favorably with OTA rates,” as supported by the integration, “have enabled us to achieve a 50:50 split between OTA and direct bookings online, far more than before,” Miller notes.
She adds that the integration will eventually permit Vintage Hotels to sever its remaining OTA relationship, resulting in significant savings on commissions. Guest data gathered during the direct booking process such as activity and dining preferences, will be utilized as the basis of future promotional offers intended to improve guest loyalty and bolster revenues.
In another twist on harnessing reservation management systems to up the direct bookings ante, the Jupiter Hotel in Portland, Ore., tweaked its Vertical Booking central reservations management system from Vertical Booking USA to stop accepting OTA-initiated bookings once a pre-set occupancy level was reached. Direct booking then becomes prospective guests’ only option.
“For example, if I know that I always get 15 direct bookings for any given date in the week leading up to arrival, once we reach 15 available rooms within that seven-day window, the software would automatically shut those partner channels off,” explains Nick Pearson, assistant general manager. Pearson says the ability to divert bookings from OTAs in this manner has significantly increased the Jupiter Hotel’s direct bookings volume.
Easier Bookings, Better Rates
Website enhancements can play an equally significant role in helping hoteliers to cultivate more direct bookings and reduce reliance on OTAs.
Savvy hoteliers are optimizing their websites to make the direct bookings process easier and more compelling. For Residence & Conference Centre Niagara-on-the-Lake in Niagara-on-the-Lake, Ontario and Residence & Conference Center in Welland, Ontario, a booking widget on the homepage is a key to driving direct group bookings, reports Mike Parente, sales and conference manager. The widget is a component of TheBookingButton, SiteMinder’s booking engine. Positioning the widget on the homepage, rather than forcing users to click several links or peruse multiple pages before giving guests an opportunity to secure a booking, led to high double-digit increases in group business. The widget displays promotional codes making the idea of direct online booking even more appealing, Parente notes.
In addition to booking widgets on homepages, hotel operators would do well to configure websites so that a pop-up message appears when visitors appear to be “signing off” without making a reservation, Oreskovich says.
“Many of our clients have had success with pop-ups that say something like: ‘Don’t go. Your best rate is here!’ or even pushing an offer of a better rate than the one that was first presented,” she adds.
Similarly, some hotels follow a practice of optimizing rates and/or creating special “book now and save” offers that emphasize a similarity between hotel and OTA tariffs, then promoting them online. According to Taylor Short, hotel market analyst for software advisory firm Software Advice, an even better strategy is to offer value-adds only to consumers who book direct: free Wi-Fi, complimentary breakfast, or a room upgrade. According to the findings from Software Advice’s Direct Bookings report, 48% of consumers would “likely” book a hotel stay on the property’s website rather than through an OTA in return for an offer.
“Travelers’ behavior is a tough thing to change,” Short observes. “They’re so used to searching online travel agency sites because they believe that’s the only location to find great deals. [Calls-to-action and pop-ups] are an opportunity for hotels to educate current and future guests that they can find more value with compelling add-ons. They don’t cost the hotel much, but provide real value for guests.”
Red Lion Hotels Corp. utilizes its Duetto Research GameChanger revenue management solution to personalize web offers that feature best rates intended to entice guests to veer off the OTA bookings path, reports Bill Linehan, vice president and chief marketing officer. The solution has a pricing engine component that calculates individual “loyalty pricing” based on such factors as guest spending and potential contribution to the bottom line, as well as market demand.
“If hotels can bring together revenue management systems, booking engines, and PMS and have them all work toward a common goal, that’s how they can be agile enough to drive direct business,” Linehan asserts. “It’s also how they can provide a booking experience with less friction that can compete with the OTAs. But what gets guests coming back to our direct channels is that they know they can find the best offers and rates with us, rather than search for hours on the OTAs.”
The GameChanger technology also permits Red Lion to derive and promote its “best rates” and, in turn, drive direct bookings without sparking bottom line erosion. For instance, it no longer employs fixed modifiers to differentiate rates assigned to individual types of rooms (e.g., those with one king bed versus those with two double beds) in individual hotels. Instead, rates depend on demand for a particular type of room in a particular market. Rather than using a static percentage off BAR, the chain is more fluid with its discounts, altering them as demand — tracked by the system — dictates. An alert functionality makes management at individual properties aware of sudden changes in demand, so that they can respond to market conditions and adjust prices to maximize revenue.
Red Lion has also begun to utilize predictive analytics to encourage direct booking, primarily under the umbrella of experimenting with different rates to see what “sticks.” With GameChanger as a vehicle, the chain looks not only at its own historical information, but also third-party data that impacts demand; for instance, air traffic into a particular city. Lost business data from the booking engine is also analyzed. Management can see which prices drive conversion from guests searching the website, to actually booking a room instead of jumping to another hotelier’s webpage or to an OTA.
“The ability to understand potential customers’ price sensitivity and elasticity is crucial, because it opens up the whole range of price points that will still appeal to guests — but provide the desired profitability attainable through direct booking,” Linehan concludes. “Knowing the whole picture gives our revenue managers the confidence that they can push rates during peak-compression periods and still attract our share of direct bookings and keep them healthy.”