Hotel businesses have become overly dependent on OTAs many rely on them to supply all their guests. However, building direct relationships to win repeat bookings doesn’t have to be difficult. In this blog, we explore the three things you should focus on to build direct relationships with your guests so you can keep them coming back again and again.
Hotel businesses have become overly dependent on OTAs (online travel agents) many rely on them to supply all their guests. However, building direct relationships to win repeat bookings doesn’t have to be difficult. In this blog, we explore the three things you should focus on to build direct relationships with your guests so you can keep them coming back again and again.
Overdependence on OTAs is hurting hotels
One business owner recently told me that this method worked for him because it completely removed the hassle of acquiring customers directly. It was only when I pointed out that a majority of his returning customers were also coming via the OTAs and were costing him a fortune in unnecessary commission that the penny dropped.
Too many hotel businesses seem to have forgotten how to acquire guests directly. As a marketer, it’s part of my job to help them realise that direct acquisition isn’t a difficult task, you just need to focus on three core things consistently – Time, Action and Delivery.
Every guest who makes a repeat purchase through an OTA comes with the inevitable 20-30% (and rising) commission and costs the same as a brand new customer. Hotels should be getting the bulk of their repeat business direct, not paying commission for it!
Repeat business should be more profitable than acquiring a first-time guest (and in most cases, much more profitable) but this can’t happen when it continually comes via an OTA.
What’s worse is that your best guests are building relationships with OTAs instead of with you and OTAs actively discourage repeat bookings at the same hotel to reduce the risk of guests booking direct and cutting them out of the loop.
How can hotels build direct relationships
The good news is that making a change is much easier than you might think. Like all relationships, you need to remember just three things:
Time: It takes time
Action: It starts with you
Deliver: You have to deliver what you promise
Relationship building takes time
There are absolutely things you can start doing now to improve this situation but relationship building takes time so you need to be looking at the medium and long term results of the actions you take today rather than just thinking about immediate bookings.
Work with your agency to create an acquisition strategy that prioritises direct bookings and removes over-dependence on OTAs.
Action – it starts with you
Building a real relationship with guests starts with you. Consider actions you can take to get to know your guests better and to incentivise them to come to you direct.
Here are some simple ideas to help get you started building a relationship with the guests that are staying in your hotel now:
A money-off voucher for a second stay, only redeemable on your own website? If they don’t use it then they weren’t coming back anyway, so you’ve lost nothing. Even a substantial discount is bound to be less than the commission you’d have to pay the OTA for this guest, so you’ve nothing to lose and a relationship to gain.
Perhaps you could offer the same experience? One which includes the room they liked, and perks like a complimentary meal or organised transport. You just need to capture the relevant data, so it’s ready when your CRM team wants to send personalised communications to your guest.
Deliver on your promises
Living up to or exceeding your customer’s expectations is critical to winning their loyalty. The only way to do this is to listen to what your guests tell you about their experience of staying in your hotel.
You may be surprised at what intelligent analysis of guest feedback reveals. We’ve seen how increasing satisfaction scores by one or two points in critical areas makes a significant difference in the number of repeat customers our clients have.
Direct relationships deliver more value over time
It’s important to reiterate that these things take time. First-time guests will take a while to come back for their second stay and only they are in control of when that might be. (Although often, this is highly predictable.)
You can rest assured that if you’ve made the first move and you’ve done so with the offers that the data suggests are most relevant to the guest’s profile. When they come back all you need to do is exactly what you did last time: deliver, each time, and the cycle continues.
A year later, you’ll find that your expensive first-time guest has most likely turned into someone who has stayed multiple times and is now a high lifetime value (£) guest. The amount you will have spent on the guest to entice them back direct on those subsequent occasions will have proved minuscule compared to the initial investment of acquiring them via an OTA.
Written by Stephen Barr, Chief Insight Officer and Co-Founder
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