Today Hotels is experiencing an increase in the modern battle of turning lookers into bookers.
It has become a war on online travel agencies and third-party applications.
Is it possible for Hotels today to take back market shares from online travel agencies and third-party applications?
The growing battle of the customer
The worlds of Hotels have become more compromised in the evolving digital age, maintaining and improving profitability has increasingly challenged.
And as a result of this challenge customer acquisitions continue to rise.
I recently had a chat with an online marketing influencer that travels a lot. And he primarily makes his Hotel reservation through Booking.com.
Some of the reasons for using Booking.com was similar to what we seen reported over the year;
- Easy access to a wide range of products
- Browse images
- Read reviews
- Compare pricing
These were just a few of the reasons listed. But then he asked me “What advantages do Direct Bookings offer, that would make him consider a direct booking with the Hotel instead of his preferred preference with Booking.com?”
I started out the traditional route seeing this from a Hotelier point of view;
- Price guarantee with Best Available Rate
- Better options with changes and cancelation
- Perks with the Hotels loyalty program
- Better room assignment
- Better amenities
- Increased opportunity for upgrades
I discovered these options was not appealing enough to change his mind.
Despite the advantages of direct booking, he preferred the intermediaries that Booking.com provides.
Booking.com had become a household name for him, so even if he went to a Hotel website to research info he would end up making his reservation with the online travel agency.
I suddenly realized I had run into a Challenge most Hotels face today. There was no real connection between the customers and the hotelier’s mindset. I could not provide a one-liner or a paragraph that would convince the influencer to change his mindset.
At one point, I tried to appeal to his rationale explaining that an online travel agency like Booking.com provides search results based on a preference system. Their Preferred Property Program offers top listings in exchange for an extra commission fee.
These types of facts turn out to have zero impact on the travelers final booking decisions.
Customers like to feel they’re getting the best price for what they purchase, and this is certainly the case with Hotels. In, this case travelers are drawn to online travel agencies in part of the perception that they are offering the best price.
After I listed the influencers rationale I took some time to do some research why customers make a direct booking with Airbnb.
Here are some of the primary reasons I was able to identify;
- Images is representative of the place that is booked
- Ability to book all accommodations through one place
- Flexibility and privacy
- Book apartment instead of just a room
I did see some travelers were offered amenities like Free Wi-Fi and Breakfast. It was a bit puzzling to me that these two amenities did not show up more often than I was able to identify. Surveys were done both by Hotels and online travel agencies typically list Free Wi-Fi and breakfast as top amenities.
If we look at Airbnb it defines itself as a trusted community marketplace for people to list, discover, and book unique accommodations around the world — online or from a mobile phone or tablet.
With a mission to empower people to experience the world, Booking.com invests in digital technology that helps take the friction out of travel. At Booking.com, we connect travelers with the world’s largest selection of incredible places to stay – including everything from apartments, vacation homes, and family-run B&Bs, to 5-star luxury resorts, tree houses, and even igloos.
And when we look at both Airbnb and Booking.com we can see there are some similarities. They have focused on the experience and the community.
One thing Airbnb and online travel agencies like Booking.com have in common is that once utilized their service and had the actual experience their preference for returning almost is doubled over an experience booked directly with a Hotel.
What is really direct booking?
- Phone directly to Hotel or call-center
- Bookings from the Hotels website
- Branded mobile app
Even though online travel agencies in most cases provide customers with a preferred selection of Hotels I don’t see them as the big evil.
Today’s Hotels are not in a position to penalize customers that made a booking through an online travel agency.
Online travel agencies have understood that customers today primary make their Hotel reservations through their smartphones.
And that also means that customers have access to the detailed information’s in that represents the window of opportunities that the travelers are researching.
Hotels today have to look at the 360-degree customer engagement cycle that happens in real time.
Hotel Bookings in context
When look at Hotel bookings today we have put it in context. A business traveler study released in 2017 show that that average per diem was $321 per day. This included costs for meals, car rentals and Hotels.
Companies that sent a traveler on a 3-day business trip spent on average $1413. On average, they spent $450 on airline tickets and with 3 days on $321 average per diem, it totals $1413.
And the average cost for Hotels per night was $177.
If we take the 3 nights and multiply it by $177 the total average cost comes to $531.
A study was done by Google and Phocuswright show that 57% of U.S travelers feel that brands should tailor their information based on personal preference or past behaviors. If a travel brand tailored its information and overall trip experience based on personal preferences or past behavior, 36% would be likely to pay more for their services.
From Lookers to Bookers
CNN did a customer’s study on travel perceptions and behavioral trends that influenced traveler’s decision process.
- 67% say “safety and security” matter most
- 60% are “price” driven
- 58% are driven by “reputation”
- 55% say “knowledge and availability of information” matters most
- 54% are driven by “diversity of things to do/amenities”
When we look at online travel agencies and Airbnb they have put a lot of efforts in on educating their communities.
This is something Hotels really need to take to heart. And pointing finger and pushing blame don’t resolve anything.
We have to start educating customer, and take part in create new alternative solutions that appeals to new mindsets. The rising demand for authenticity is something Hotels really should take advantage of.
Great travel experiences are truly valuable and memorable. Today’s Hotel guests, for example, will define a brand by the quality of their experiences across a proliferation of reference points, including smartphones, desktops, wearable apps, over the phone, and on the property.
Brands which make an effort to infuse elements of on-demand, personalization, and authenticity into these channels will likely fare much better than brands which do not, generating more revenue by driving loyalty, positive reviews, social likes and shares, and word-of-mouth recommendations.
Experience is now integral to core Hotels offerings.
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