Despite ‘Dimming,’ Hotel CEOs Determined to Push Direct Bookings
The battle for direct bookings is continuing, and more evidence of the positive effects of direct bookings have recently come to light. SiteMinder has released a report detailing the fact that, over the past year, all of their hotel clients have seen average booking values on their own website that are nearly double what they get from third party channels.
Reports on ‘dimming’ practices by OTAs have also been released, with OTAs making hotels who are creating direct-to-consumer offers suspiciously more difficult to find in their search results. Furthermore, Priceline’s CEO has said they will continue to “press” chains for their lowest rates, and declared that “it might not be a good idea” for the chains to push those discounted rates. Priceline can offer discounts too, he says.
Hotel CEOs remain determined to push for direct bookings, however. Even those who have not yet reaped large benefits from their book direct efforts are carrying on. To them, it’s a long-term strategy they’re committed to. Get the full stories below:
SiteMinder Report: Average Booking Value on Direct Hotel Websites Nearly Double that on Third-party Channels
The average booking value hotels are realising on their direct website is nearly double the value they are receiving from third-party booking channels, the global hotel industry’s leading cloud platform, SiteMinder, reveals today.
An analysis of the year-long data found that the average reservation was US$340 through SiteMinder’s Channel Manager, which streamlines reservations made on third-party booking websites, while the average reservation was US$600 through bookings on a hotel’s own website.
SiteMinder’s managing director, Mike Ford, says the finding highlights that hotels should be investing heavily in ensuring they have a balanced approach to distribution and that they are focusing on their direct booking strategy in order to maximise direct conversions and therefore profit.
A cyber war has erupted in recent weeks between major OTAs such as Expedia and Priceline.com and hotel chains over how some discounts are being offered. Consumers, for their part, are caught in the middle of a fight many have no idea even exists.
The stakes are high for hotel companies, which can lose bookings when the travel sites alter their search results.
Earlier this year, Marriott (MAR), Wyndham (WYN) and Hilton Worldwide (HLT) stepped up their efforts to lure consumers away from the online travel agencies, or OTAs, by directly offering discounts on room bookings. The discounts leave the OTAs out of the picture — and out any fees or commissions on the bookings.
Expedia and Priceline, the two largest OTAs, are fighting back against these direct-to-consumer offers by making the hotels harder to find on their sites, according to industry experts.
Priceline Interim CEO Jeffery Boyd said the company will continue to “press” the chains for their lowest rates and noted that Priceline is equipped to advertise substantial discounts, too.
“It might not be a good idea” for the chains to push those discounted rates, Boyd said.
In other words, if the hotel chains continue to offer discounted rates to their loyalty program members when booking directly on the chains’ own websites, then Priceline can do some discounting of its own as a counter-measure.
Hotel CEOs have a lot on their minds these days, from terrorism and softening corporate travel business to Brexit and Airbnb.
And although they’re guardedly positive about business for the rest of this year, one thing hotel CEOs have been particularly bullish about in the past few quarters are their respective direct booking campaigns, most of which involve discounted rates for their loyalty program members.
As Hilton’s Nassetta and Marriott’s Sorenson pointed out, the direct booking war isn’t a war that’s won overnight. And there are still a number of other strategies hotels might pursue to gain economic leverage.
Hotel CEOs see direct bookings as a long term push. While many major chains are seeing improvements and gains already, some are not – and this hasn’t discouraged them. For these CEOs, direct bookings are the future and they’ll continue to fight for them.
We’re a little over halfway through 2016, and we thought we’d take a look back at some of our favourite pieces from the year so far. These are pieces that have generated the most conversations, turned the most heads and inspired us to look at issues affecting independent hotels from new and interesting angles.
Individually, these articles give insights into the nitty-gritty details of revenue management, digital marketing and driving direct bookings. Together, though, they’re a great look at which topics are resonating with the industry as a whole.