Normally, hotels have their main sales channels through OTAs (Online Travel Agencies), whether big or small, or through tour agencies, depending on each hotel's strategy to achieve the revenue goals set in the budget. As a result, many hotels and resorts primarily focus on these channels because they are convenient to manage and are effective sales channels. However, while these channels may meet the revenue targets outlined in the budget, they may come with additional costs, such as high commissions. On the other hand, direct bookings could be a good alternative if the hotel has a direct booking system and effective online marketing content. Here are five simple reasons why direct bookings are beneficial for hotels and resorts:
Reduce commission costs
Typically, hotels pay a commission of around 25% to 30% to OTAs, depending on the agreement or the campaign they participate in, such as Flash Sales or daily deals. By running direct ads, hotels can control the budget used and evaluate the ROAS (Return on Ad Spend). The cost of running ads can be compared with the sales generated through those online channels. This allows for better budget analysis, sales target evaluation, and the optimization of online marketing strategies, making direct bookings more cost-effective and worthwhile.
Easier management of booking system issues
Direct bookings reduce problems that may arise with OTAs, such as when guests need to change their booking at the last minute due to emergencies, or when unexpected situations occur, like air conditioning malfunctions or water shortages, requiring a cancellation or room upgrade. Booking through an OTA can take time to resolve, but with direct bookings, hotels can be informed immediately, allowing them to address the issue without intermediaries. This quick resolution can increase customer satisfaction and improve the chance of repeat bookings, thus enhancing the retention rate.
Increase retention rate
Direct interaction with guests creates opportunities for repeat bookings. If guests have a good experience during their stay, they are more likely to return. Direct online marketing campaigns, such as remarketing or special promotions for past guests, can boost the retention rate. This also fosters word-of-mouth reviews, which is one of the most cost-effective marketing strategies for hotels and resorts.
Indirect market research channel
The more direct booking data the hotel collects, the easier it is to conduct market research and understand the demand. Guest information, such as gender, age, nationality, the number of people per booking, and the number of rooms booked, helps hotels analyze trends, particularly seasonal trends, which is crucial for hotels with a high proportion of international guests. This data allows the hotel to create targeted promotions and advertising content on platforms like Facebook, Instagram, or Google, increasing effectiveness.
Enhance marketing strategies with guest data
Similar to the previous point, having more guest data from direct bookings allows for more precise and cost-effective online marketing. Using data to drive performance marketing ensures that campaigns are better targeted, allowing hotels to forecast customer needs, tailor messaging, and create effective promotions. Campaigns like Pay Day or Flash Sales can drive higher revenue, and by running ads and creating content in-house, hotels can achieve better results.
These five reasons demonstrate how creating content and running ads to promote hotels and resorts can significantly increase direct bookings. If a hotel needs tools or assistance with content creation or advertising, PlaceSpace can help. With a team experienced in creating promotional content, awareness campaigns, and targeted advertising, we guarantee reach and accurate targeting to increase direct booking conversion rates.
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