Why Grow Direct Bookings

With the hotels not aggressive in improving the visibility of their direct website, most guests find and book them on intermediary websites. The high commissions charged by intermediary sites are invested further on traffic growth and bookings, and hotel continues to depend on these channels for bookings.

The number of hotel intermediaries is mind boggling…
In the past 10 years, the number of online hotel intermediaries has grown enormously. From travel/hotel portals, destination sites, meta search – everybody wants a share in the hotel bookings. With the growing internet penetration, there is increasing competition among portals to gain the share of bookings.

The OTAs bring in bookings…
All these channels are bringing in good number of bookings for hotels. According to PhoCusWright, the share of intermediary bookings in has has overtaken direct bookings. Where’s the problem if hotels are able to fill up rooms with bookings via intermediaries?

…but at a high cost!
The problem is in the cost of these bookings! With upto 30% of each booking going to intermediaries, this is a serious dent in hotel’s profit. Hotels need to find the actual revenue by deducting the Cost of Booking.

Room Revenue – Cost/Commission = Nett Room Revenue

Now, what could the hotel do with an extra $1000 in saving…
# You could invest this on improving the organic SEO for your hotel website?
# How about invested this on PPC(Pay-Per-Click) to get targeted visitors?
# Or invest on managing your social media on a regular basis?
# Why not use this saving to train your staff – and save on outsourcing costs?

Your revenue manager told you the same…
To optimize the revenue for profit, your hotel need to find the lowest cost per booking and fill the rooms. And, thanks to online, the cost is lowest when guest books directly with hotel’s own website. Remember this, every booking grown on your direct channel, directly helps you reduce the dependence on intermediaries.

It’s very clear that growing direct bookings is a hotel’s need for long term success, and not an option anymore.

Should YOUR hotel worry?
Find the amount your hotel is losing as agency commission each year. That should give you an indication if you need to worry…