The Continuing Battle for Direct Business

David Collins, columnist and Co-Founder & Group Marketing Director at Great National Hotels and Resorts discusses the continuing battle for direct business and what hotels can do to tip the balance in their favour.

Previously I’ve pointed to the one recurring challenge facing hospitality marketers and that is how to drive direct business to a hotel’s own website.

It’s widely appreciated and understood that the direct channel – as in your own website – is often the cheapest when compared to 3rd party channels – as in for example online travel agents, GDS or deal sites – and is also potentially the most valuable since you get to strike up the relationship with the client from the outset.

However, it is one thing understanding this fact, it is quite another to implement an effective strategy to ring-fence your hotel’s share of the distribution pie particularly as 3rd party channels are becoming more and more powerful; repeat business is difficult to maintain; and booking patterns amongst consumers are increasingly difficult to predict.

So hotels and groups that are good at driving direct business protect this part of their rooms mix by managing three key pillars, each one critical in enabling a property to drive direct business: visibility, conversion and retention.

Just to recap on each.

Take Visibility first. Without a comprehensive, on-going SEO effort, your site’s organic rankings will suffer which means you become more and more reliant on (expensive) PPC.

Nowadays most hotels can just about afford to protect their own brand name as OTAs such as Expedia out-gun them spend-wise. And that’s before even attempting to target generic search phrases. It is reckoned in fact that Booking.com for example spends up to half its commission take from each hotel booking it generates on PPC …

So rather than set an absolute budget for PPC, what you should do is agree an acceptable ROI with your online ad agency or service provider: think about it, by limiting your budget, you’re directly limiting the amount of potential business deliverable via PPC.

Sticking with paid search, consider also re-marketing which agreed tends to be less effective than PPC in terms of ROI but more effective than banner ads on 3rd party sites such as news media or entertainment platforms. And of course, be diligent about refreshing and optimising content on your site: keep it relevant, don’t cram your pages with search phrases and always sanity check links.

Having secured valuable, relevant traffic to your site, the next challenge is converting the sale. This is not as easy as it sounds when you consider that consumers have an ever-reducing attention-span. Your site should at the very least be easy to navigate with relevant content including a quick-book located in the same position throughout the site. Special offers for example should also be prominently positioned particularly since these account for up to two thirds of direct on-line sales.

Have a look too at what the OTAs such as Booking .com and Late Rooms do in terms of moving you from being a visitor to being a fully paid up customer: many of them understand that clients need to be nudged along a ‘sales line’ to book and then re-assured once they’ve made a reservation hence the reason why they use various sales tools such as a ‘Best Rate Guarantee’ flag; a ‘Thumbs Up’ logo next to your room choice; a ticking clock as to when the last booking was made, etc..

All sensible stuff but not available with every booking engine provider so my advice is to put in the research when choosing your web partner. I’ll return to this point later.

The third and final front to be mindful of when driving your direct business is Retention.

Given that you’ve converted the visitor into a client and that they then go on to enjoy the experience of staying in your hotel, this should be the start of a lasting relationship assuming of course that you work at it by way of a proactive CRM programme (your client communications by the way should be relevant, sensitive and un-intrusive). Doing so enables you then to strike up a ‘conversation’ with your client base and as most folks know, we all like to buy from people whom we know and trust: hotel guests are no different.

Just going back so to your website’s booking engine.

To say that this is pivotal to your conversion performance is possibly under-stating the point. In fact, if you stand back for a moment and think about the key drivers in your business, hotel’s that are in command of their direct on-line revenues will typically credit their booking engine provider. In Great National, our own web partner of choice (avvio.com) has assisted our digital marketing team in delivering consistent year on year growth on behalf of the hotels we work with throughout the current downturn, 29% group-wide growth in direct revenues in 2014 alone.

So if you find a supplier that makes a difference to your business by helping to drive your direct online revenues – despite the market odds – be sure to hold onto them as they tend to be rarer than hen’s teeth.

About David Collins: David is Co-Founder and Group Marketing Director for Great National Hotels and Resorts, Ireland’s largest privately owned hotel group and one of the UK’s fastest growing. With over 20 years’ experience in results-driven, direct response marketing, his award-winning work including call centre development has been instrumental in building some of the largest hotel names in the UK and Ireland.
DISCUSS
  • One Comment
  • Ray Mason

    Thank-you David for a well-balanced article with several points well made. Picking up on the Retention element and driving direct business, particularly for repeat bookings, I agree with your comment that hotels often find this the most challenging and are often unsure how to implement a “proactive CRM programme”. I would therefore like to share a possible solution with readers of your article which may be of interest:

    One of the most powerful strategies that we adopt for our hotel clients utilises a newly-developed tool to automate the extraction of “big data” from the hotel’s Property Management System (PMS) on a daily basis. In addition to the usual reservation details for each guest, this can include spend on other services such as food and beverage, golf, spa etc.

    Combining this PMS data with other marketing lists obtained via website enquiries, events, promotions etc., we create a comprehensive guest database which provides a single-view of every guest and potential guest, along with their interests and preferences, which is automatically updated each day. No more juggling of multiple Excel spreadsheets! This can then be used to generate personalised email or SMS communications to their guests based upon their individual interests and booking behaviour, building campaigns and updating preferences automatically based upon their interaction with each communication.

    Customers and guests respond positively to being recognised as individuals and receiving communications that are relevant and tailored for them and it builds a sense of loyalty. Hotels using this approach to creating a loyalty programme are winning incremental direct bookings and reducing their reliance upon online travel agents, thus saving considerable sums on commissions.
    We have developed the tools and processes to enable all of this to be done effectively and efficiently – and usually with a lot less effort than is currently being used to produce a single mass mailing of generic offers to the complete database.

    I am happy to provide more info if anyone is interested to find out more and can be contacted at ray@themarketingmedic.com

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