Is Loyalty Good for Business?
Are hotels “winning” the book direct wars, and can they successfully continue to drive direct bookings at lower costs in the long run? Is the distribution game zero sum? Will loyalty rates really help drive those bookings? This month has seen some articles with great insights into these areas.
Additionally, we’ve discussed our frustration with the last click attribution model before – a model that means all the credit for a booking goes to the last ‘touch’ a consumer has with a hotel’s online presence gets all the credit. Google is looking to make things a lot clearer with a new offering, helping hotels see which of their marketing efforts are most valuable with less effort than before.
Take a look at it all below:
Hotel companies are always looking for an edge in the quest for customer acquisition. They want customers to book direct rather than through an intermediary. Makes sense: Direct-with-the-hotel bookings are the cheapest distribution channel, avoiding the higher commissions paid to online travel agencies when a customer books instead through an Expedia or Priceline.
Hotels have turned to loyalty clubs with member rates as part of the solution. Anecdotally, member rates have been a huge boost to customer acquisition. On Marriott’s Q1 call, CEO Arne Sorenson said he is “encouraged by what we’ve seen” and that “member rates have value and are here to stay.”
But, does that value extend to hotel owners? It does if it’s a parry to more expensive OTA business.
This article gives a clear, deep summary of where the conflict between hotels and OTA’s today is coming from, why it’s happening now (instead of 7 years ago), and, of course, how that conflict is manifesting in direct booking campaigns. It outlines the common problems with direct booking campaigns as they stand now, and looks at the question: are direct bookings vs OTA bookings a zero sum game?
Email campaigns, digital ads, TV spots and store visits are among the many tools that marketers use to reach consumers. More often than not, whatever “touched” a consumer most recently before a purchase gets the credit. That’s the last-click paradigm, a reference to a shopper’s click on an ad online.
The search giant’s new offering, dubbed Google Attribution, joins the effort to pull off something more sophisticated.
Hoteliers are adapting their revenue-management strategies to accommodate rising levels of last-minute leisure demand, which sources said is driven by a series of technological, economic and social factors.
Many of those spontaneous, last-minute bookings are from drive-up travelers. But the rise of mobile booking apps and online travel agencies are partially responsible for the surge, having made it easier than ever for the last-minute guest.