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Why Direct Bookings Matter For Accommodation Establishments

A Push In The Right Direction

Big hotel groups and accommodation investors in Africa are pushing direct bookings and loyalty memberships above all else these days, citing the need for deeper relationships and a richer engagement with guests. But there’s a more important reason for you to invest in a direct-booking strategy for your hotel, writes Vanessa Rogers.

Running a hotel is an expensive business, what with its staff requirements, the basic food and beverages that need to be refrigerated onsite, and the increasing overheads of power and water – not to mention rates for some of the bigger properties in well-established areas. Then, there’s the issue of online travel agent (OTA) commissions of between 15 and 25 percent, which are shrinking profit margins for the hoteliers themselves. Should we condone a system in which the very providers of a service or product are progressively losing influence and say over what they are offering and to whom? Fortunately, as a result of a combination of tech-driven factors, hotels are now in a position to compete on a more equal footing with the OTAs. Search engines now allow hotels to appear right alongside the big OTA giants and, if a travel industry member has succeeded in properly optimising their website, they can compete to appear in relevant searches at an affordable rate, too.

Tech trumps OTAs

A selections of new software items has also come onto the market for inquisitive hotel managers – ranging from property managements systems to channel managers, internet booking engines, loyalty systems and conversion optimisation tools. These are levelling the rates playing field as hotels can now push out their rates on a range of different search engines, allowing users to find them and what they charge for a room as easily as they would find and search for accommodation via an OTA.

In South Africa, where economic challenges include cost of living and unemployment, hoteliers need increasingly for guests to book with them directly so that they do not lose that exorbitant 15 to 25 percent commission payable to OTAs on each and every booking. Employing the new industry software means that users (i.e. hotel guests) can potentially pay a lower rate and/or receive a loyalty reward for booking directly with that hotel or guesthouse – if the establishment in question has implemented all the relevant software and marketing strategies. Additionally, this will make savvy users seek out direct bookings on accommodation offerings in the future too.

Rates structures are another tool at the astutue hotelier’s fingertips. These are put in place to offer early bird or last-minute specials which mirror, or can provide even better value, than the OTAs but are only available to those users who employ a hotel’s direct channels (usually emailing them directly or booking directly via their website).

Social speak

How can social media assist hoteliers in their direct-booking strategy? Well, platforms such as Facebook, Twitter, Instagram and others allow industry folk to easily reach out and chat to guests based around the world, and to share any of their specials – a communication strategy that was never available in the past.

And the importance of direct bookings in Africa, and beyond? Well, many hoteliers would argue that the OTAs assist them with maintaining a certain percentage occupancy rate; they certainly do have a place in the scheme of things. But the industry has become a little unfairly weighted in the favour of the OTAs – with many accommodation establishments voicing the need for more knowledge on the subject so as to feel more confident in politely taking on the OTAs when they begin to feel bullied.

Arebbusch Travel Lodge in Windhoek, Namibia, is an excellent case study in this regard because, over the past 12 months, its online marketing team has implemented a range of direct booking strategies and is scoring an increasing number of direct bookings as a result. Customer relationship manager at Arebbusch Travel Lodge, Lizé Ackermann, says that since installing the software, her team has seen the Lodge scoring as many bookings directly as they do from all the usual OTAs combined. “This means Arebbusch Travel Lodge is saving a substantial amount in commission, which would previously have been payable to the OTAs. Additionally, we are developing a better relationship with our guests; instead of the OTAs putting their contact details into a database and building up information about them, we are now able to do this. We can see what guests are looking for and how they are buying it, allowing us to offer them specials that really count,” she enthuses. “The end result is that guests are developing a sense of loyalty to our brand, once again, because they can save on commissions and take up the special offers we are able to offer them, directly. It really is a win-win situation.”

Yes indeed – loyalty programmes and specials that can only be accessed via a hotel’s direct channels mean holidaymakers and executives can better budget for their leisure and business trips, while still being able to search via an OTA when they are unfamiliar with a destination or the range of accommodation options to be found there.