Last updated: 09:03 AM ET, Wed September 02 2015

Why Are More Hotels Heavily Promoting Direct Booking Today?

Hotel & Resort | Ryan Rudnansky | September 02, 2015

Why Are More Hotels Heavily Promoting Direct Booking Today?

Photo courtesy of Thinkstock

While more travelers are going online to book hotels these days, that hasn’t necessarily translated to a rise in direct bookings for hoteliers.

Some hoteliers are concerned about the ratio of direct and on-site bookings to bookings made through other channels and via an increasing amount of competitors. In turn, some major hotel companies are pushing benefits for travelers who book direct only. This has caused some unintended consequences, such as brick-and-mortar travel agencies and agency associations feeling less valued and ignored.

Just recently, Marriott International launched an online campaign called #itpaystobedirect encouraging guests to book directly. This caused the American Society of Travel Agents (ASTA) to condemn Marriott’s actions publicly. As a result of the backlash, Marriott actually pulled one of the campaign’s YouTube ads.

ASTA is also in discussions with Hilton Worldwide regarding its ads that promote direct booking.

So, what, exactly, has caused hotels to take such drastic steps to increase direct bookings and risk the ire of the travel agent community?

Spring Metrics released an infographic on Tuesday (see below) detailing the major factors that lead to a loss in direct bookings for hotels, just ahead of the fourth quarter of 2015.

According to the infographic, which draws from a variety of sources, travelers visit an average of 22 websites before booking a room.

The biggest threats to direct bookings?

Online travel agencies (OTAs) and the sharing economy.

According to the infographic, hotels lose about 0.05 percent in revenue for every 1 percent gain in bookings by home-sharing services such as Airbnb per quarter.

On top of that, 50 percent of business travelers—and 33 percent of leisure travelers—prefer to book with OTAs rather than book through a hotel’s official website/booking engine.

Interestingly enough, this has happened despite the fact that travelers are generally searching online by hotel company name. The specific hotel company name accounts for 58 percent of keywords when travelers search online.

So, what to do?

To keep direct bookings at a reasonable level, the infographic recommends for hotels to promote user-generated content such as guest reviews, personalize content when marketing to travelers, develop video content and interact via social media.

This may be a good compromise for hoteliers, allowing them to market more effectively while also not alienating major sources of revenue such as travel agencies.




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