On top of the convenience, credibility, packaging and insurance options, OTAs offer rewards and loyalty programs. So, what can a small hotel do to encourage direct business? If you’re inclined to start discounting direct bookings, you may want to reconsider. Contrary to popular belief, it is not safe to assume that all decisions are based on price alone. Offering an unrestricted discount on all direct bookings leaves money on the table. As well, it undervalues your brand and will potentially attract the wrong guest. And by wrong guest, we mean those who buy on price alone or try to negotiate a discount. Guests who are given a discount once will expect it every time they book. In other words, if you don’t want to extend a discount in high season, when that same guest wants your last room plus a little more for being ‘loyal’, do not negotiate on rate.
If your hotel relies on travel agents, discounting direct bookings is especially risky. If the guest is working with an agent, and finds a better rate direct, they will tell their agent, and you will have to match whatever discount you offered PLUS any applicable commissions or risk losing that agent’s future business and then some. Agents are quick to blacklist hotels that attempt to undercut them, and word spreads quick. Do yourself a favour and avoid price wars. And remember that your sales partners are not the enemy; they sell the rates and inventory you give them. If they are selling significantly more than direct, are you inadvertently giving them the power to do so at your own expense? Consider the value resellers offer; find a way to match it. And hold your rate.
Seek opportunities to build relationships before your guests are ready to buy. Be active on social media and pay attention to travel forums and Q&As on TripAdvisor. For every Q&A or forum post our clients reply to, they get at least one email from potential guests who want more information. Don’t offer a discount, but do offer an upgrade subject to availability on arrival. Or offer a bottle of wine; a restaurant credit; or a unique experience. And say you will VIP them when they book. This may seem like nothing to you, but your guests want to feel special. Remember, travel is an emotional purchase. One guest sent an email after booking direct, saying “she couldn’t wait to experience being VIP’d”. Our client delivered their usual service, but the guest was so grateful, she became a regular.
So, how can you tweak your effort to reach guests before they’re ready to book?