Reaching the consumer is absolutely critical but hotels are
failing to capture enough of the market and are paying the price says new
report.
According to an EyeforTravel industry survey, which captured nearly 800
responses from travel suppliers, OTA ownership of the customer is the
single biggest external challenge they face. The results featured EyeforTravel
and Fornova’s new The State of Hospitality Distribution: Direct report, which
is free to download now, show that hotel brands are struggling to reach the
consumer and get them to make a direct booking, with the fierce competition hurting
revenues.
This can be
seen in the soaring cost of acquisition. When EyeforTravel asked travel
suppliers what issues were standing in the way of getting their products in
front of customers, cost of acquisition came top at 43.4% of respondents,
followed by another highly relevant issue to the direct question:
Intermediaries.
The position
of intermediaries as the supreme sellers of hotel rooms has put hotels at a
disadvantage, in large part due to the accumulation of data expertise, along
with the resources to interrogate and fully utilize the findings in marketing
campaigns.
OTAs have an
advantage that hotels continue to struggle to match, from proper data analytics
to being overmatched in PPC campaign spending.
The net result
of this is that the major OTAs have created a sense of brand loyalty among
travel consumers and created a powerful market position. In a consumer survey
of more than 5,000 travelers from Australia, Canada, the UK and the US also featured
in the
report, OTAs came out strongly ahead of hotel and traditional travel
agencies for driving consumer bookings. Expedia, Booking.com and Hotels.com
were the brands attracting the most repeat bookings, far ahead of the big hotel
brands, with Best Western, Hilton and Marriott the best performing of these but
still far behind the OTAs.
This means
hotels needs to look more carefully at how they attract and retain business
from consumers, considering profit per guest and customer lifetime value, as
well as the value of owning the data from each guest.
“The question is, do you look at it from the perspective of
operational results, which means profitability for the transaction, or from the
point of view of lifetime customer value or customer retention?” Posited
Sanchit Rege, manager, distribution strategy at Hyatt Hotels Corporation. “Even
if I have to spend five extra dollars [on metasearch costs] for someone to book
direct, I have an advantage over the other transaction because now I know who
this person is before he arrives and I have the ability to drive profitability
on my food and beverage or some other form of ancillary revenue and I have the
ability to actually make him loyal over a period of time.”
Kyle Mais, general manager of the Jamaica Inn in Ocho Rios,
Jamaica, called guests who book directly “more sticky”. “Once the booking is
made, we follow up with them directly to get them ready for the trip and create
a relationship from an early stage,” he attested. The hotel will advise guests
of packing needs, ground transportation and seasonal activities taking place on
property during the guest’s travel dates. At check-in, these guests will ask to
meet the reservationists with whom they’ve been communicating because of the
relationship and want to thank them before their vacation has even begun. For
guests who book through an OTA, their initial interaction with the hotel is
upon arrival and the hotel is starting from square one without data on the
customer to help them.
For more tactics from both major and independent hotel brands
and data, download
the report and receive:
- Industry and consumer
survey data from hundreds of travel suppliers and thousands of consumers
- Viewpoints from major
hotel chains and independents on key tactics
- Analysis of the state of
direct booking rates to benchmark your performance against
- Tactics to improve direct
channel booking rates and increase loyalty
- Strategies to increase
channel visibility and get more guests into your funnel.
This report is part of the
State of Hospitality Distribution Report Series. In this we cover
metasearch, direct and OTA channels, assessing the health and landscape of each
before giving you the information to maximise their effectiveness. Keep an eye
out for our upcoming OTA report and click here
for the metasearch report.
