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 5 years, the number of online hotel intermediaries has grown enormously. From travel/hotel portals, destination sites, daily deals to 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.
They bring in bookings…
All these channels are bringing in good number of bookings for hotels. According to PhoCusWright, the share of intermediary bookings in 2012 was 70%, whereas direct bookings were 30%. 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. See how…
We got a 50-room hotel to try our Profit Leak Calculator…
With just 50 room-nights contributed by intermediaries at $100 per booking, the hotel gets booking worth $5000 each month. At a common 20% outgo, hotel’s loss in profit per month was $1000. This amount could be saved if the guest booked directly at hotel website. For this, hotel needs to have a direct booking growth strategy in place.
Now, what could the hotel do with an extra $1000 in profit…
# You could invest this on improving the organic SEO for your hotel website?
# How about $200 invested in PPC(Pay-Per-Click) to get targeted visitors?
# Or invest some amount to create and manage your social media?
# Why not use some fund to train your staff? And save on outsourcing costs?
Any guesses, what would the situation be if a hotel continues with a direct booking growth strategy for 6 months?
Your revenue manager told you the same…
To optimize the revenue for profit, every hotel has 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?
Get in touch with us to find the value your hotel is losing every month or year.