When hotels sign rate parity deals with online travel agencies (OTAs), they agree not to advertise the same room as the deals site for less (including on their own website). As a result, many customers assume they will always get a better deal if they book through sites like Expedia and Hotwire, so they avoid booking direct through the hotel. This has mitigated many hotel operators’ ability to manage the amount they pay annually in OTA commissions.
While OTAs will always represent an important piece in a hotel’s revenue, management also doesn’t want to cannibalize business that might have booked direct in the first place. This takes strategic efforts to draw customers to their own websites, front desks and phone lines. Recently, I rallied a group of hotel marketing experts to help devise several such strategies. Here’s what they recommended.
Offer Deals for Less Than the OTA, But Limit the Audience
Rate parity only applies to discounts that hotels offer to everyone on the Internet. Companies can get around this by fencing the audience for deals. This can include your social media following, loyalty program participants and customers on an email list.
You could, for example, design an image with a discount code for one of your rooms, then post that on Facebook. The hotel that ran this ad generated about $2,000 in sales just from the ad in one month, compared with less than $100 from Facebook the month previous:
Similarly, you can email a list of loyal customers a deal for a return stay. This can include straight discounts to the room rate, or perks such as gas cards or tickets to a local event. Be sure your front desk staff invites guests to join this list at check out and that they specify that signing up gives them access to deals and other specials. Additionally, your front desk team can include a discount coupon towards a future stay with the customer’s receipt.
While digital communication is important, direct mail has also proven successful for some hotels. People are inundated by email, so a 5-by-8-inch postcard – like this one from the Sebastian Hotel in Vail – could cut through the clutter.
Create ‘Packages’ with a Higher Value than OTA Savings
Packaging services and other perks is another effective way to offer discounts to customers without breaching parity agreements. Even if the room rate is higher than what the OTA advertises, the value of the package can be more than what the customer would have saved with the OTA rate.
Many hotels will create package “themes.” Ritz-Carlton and the Hilton San Francisco, for example, have entire pages on their websites dedicated to deals. Some are targeted more towards families, others zero in on spa-inspired travelers.
Use Design Best Practices to Keep Them Onsite
One of the biggest mistakes hotels can make is not capitalizing on the website traffic they do generate, especially when you consider a lot of those visitors could come directly from the OTA.
When customers search for deals on OTA sites, often they will have a few options in a similar price range. This might prompt them to head to each hotel’s website to learn more about the amenities. Hotels can do a few things to increase their likelihood of inspiring the customer to say onsite.
- Make online booking obvious and seamless. Make sure that your “reserve now” or “book now” call-to-action buttons are in the top left or right side of the page. These allow the customer to check availability in real time and book their stay without calling an agent. If you don’t have a hotel management system, you should review services that integrate directly with your reservation or property management system if you have one.
- Post deals and offers on every page on the website, in a variety of formats. Earlier I mentioned the “offers pages” on Ritz-Carlton and the Hilton websites. These pages are linked directly to a tab on the homepage that says “offers.” For example:
- You can also create offer pop-up screens that flash immediately when someone visits your website. These should include a direct, “book now” button as well. Here’s an example from the Napa River Inn:
- Finally, Make sure that images of your best rooms are featured front and center. While it can be difficult to persuade customers that you can offer a better deal (even if you do), you can convince them that it’s worth paying the extra price for a nicer room. Feature these differentiators with professional photos of your best room’s view, soaking tub, square footage or whatever else best “sells” the room.
By implementing the tips we’ve laid out in this article, savvy hotels can drive more direct bookings, without breaching OTA agreements and essentially “biting the hand that feeds them.”
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Ashley Verrill has spent the last six years reporting and writing business news and strategy features. Her work has been published or cited in GigaOM, Inc., Forbes, CIO.com, the Austin Business Journal and the North Bay Business Journal. She currently writes software reviews for Software Advice and is the Managing Editor for the Customer Service Investigator blog.
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