For many small Hotels, Guest Houses & B&B’s hotel marketing is about getting listed on one of the ever growing Online Travel Agency sites. What some call booking intermediaries. But, Hotel Guests have not been getting the deal that they think they were when they have been booking online because many hotels have had to increase their prices to cover the commission (of up to 25%) that the websites take for having listings on their sites. It’s about time someone took some time to look at hotel marketing. The OTA’s are making a good living but it’s being paid for by smaller businesses.
So if you’re a boutique hotel, guest house or if you run your own bed & breakfast, this might just prove an interesting read for you. Here’s how and why OTA’s are doing so well.
- Booking.com and late-rooms.com both charge commissions of 15 to 25 percent
- Hoteliers are being asked to refrain from marketing their own web pages to undercut other sites
- Booking sites are able to pay huge fees to advertise their own services on the search engines
- Experts warn that the booking websites aren’t as competitive as they make themselves out to be
Online travel agents (OTA’s) are being accused of being villains that rip off guests and do nothing but drive prices up. Hoteliers are enraged that the biggest booking sites take a commission of up to one-quarter of what the customer pays, and are making millions every year. Some smaller hotels, B&B’s and Guest Houses have been forced to increase room prices in order to make up for the commission that the websites are taking just to make ends meet.
The agents are warning hoteliers that they should not undercut the booking websites on their own sites. This kills off the benefit to consumers for shopping around and gives the OTA’s a captive market. So who’s really winning here?
Hotel Marketing & Booking Direct – What Perks do People Get?
This is up to the Hotelier but enticing a direct client is money in your pocket so giving your guest something extra is money well spent. This is hotel marketing 101. People who contact the hotel directly are more likely to do so if there is a benefit for them. If they are able to get a discount of up to 10-15 percent, or maybe a free breakfast, cut-price drinks or even a room upgrade it can encourage many more of those better direct bookings that will impact your bottom line. A lot of the larger hotel chains are giving the bad rooms to the OTA’s and the better rooms to direct booking guests and they are being transparent about it.
The booking sites pay large advertising fees to the search engines to get their sites noticed, and this means that they have become the dominant force in bookings. Is it then any wonder that hotels rarely offer good rates because of the fee that the owners have to pay. People who contact hotels directly can enjoy large discounts but we need to make sure they know about it.
Hotels, guest houses, and bed and breakfast sites have to pay to be on these OTA booking sites because those sites usually appear higher in the search results than their own websites. Clients are booking through an intermediary but they are not getting any benefit from doing so. The websites often list hotels that they do not have a contract with, and when the user searches for availability, they are told that the hotel does not have spaces, and are then presented with alternative hotels which are listed on the site. The booking websites are now responsible for more than half of the bookings that many hotels take.
In an interview with the Daily Mail, Booking.com said that accommodation partners choose to work with them because of the benefits in terms of increased occupancy rates, the volume of reservations and more. They are charged a fair amount of commission for the marketing that is done.
OK, maybe they have a point but they are marketing themselves, turning their website into a brand, it’s not about the hotels really at all.
LateRooms.com explained that they offer good value and give hotels exposure to millions of customers, and across thousands of affiliate partners. They have to reflect the cost of operating in their charges.
http://fairerfees.com/why-do-they-need-15-percent/ is great, this site explains that while 15% might not look like a great deal to the individual hotelier, it mounts up when spread across the number of businesses that they work with.
The maths they show on the site are these:
Looking at just 500 hotels:
- Hotels receiving bookings 500
- Room nights per day per hotel 2
- Total annual bookings 365,000
- Average commission per booking £15
- Total annual commission £5,475,000
Is there any wonder these online intermediaries are increasing every year? There are new booking sites appearing, including Trip Advisor’s comparison engine, and other major players such as Kayak, Expedia and Trivago are all offering booking deals.
Secrets of Hotel Marketing – How can a smaller Hotelier compete?
What is the best way for a smaller hotel to remain competitive, then? Well, the websites remain useful for shopping around, but when you find hotels that you like the look of it is best to call the hotel directly to see what they would charge for a direct booking. As hoteliers, Guest House owners and B&B experts we can together educate our customers to do just that. In your marketing ASK people to call, and remember that people choose accommodation based on reviews, rather than just on price. With that in mind, work harder to get good reviews and remember there are 3 main sites you need those reviews to show. We can advise on some simple and effective strategies for getting lots of reviews right now! It does not have to be a chore.
Use the booking websites, but offer incentives for a direct booking so that you can avoid paying obscene fees.
Parity clauses between OTAs and hotels force Hoteliers to offer the best price through the booking site, but there is a loophole will usually allow a hotel to offer a discounted price on the phone. There are other shortcuts too to bend rather than break those rules and make sure the lion share of the revenue is coming to YOUR business.
Next, you need to make sure e that your website ranks well in local listings. Yes the OTA’s advertise and spend a lot doing so but showing well in the organic results will get you a larger share of the search traffic. On average only 30% of searchers click on the paid ads, 70% prefer to click on a natural, free link. So by using SEO (Search Engine Optimisation), you can focus on those local searches, making sure you show high in the results of popular searches like:
- Hotel + location
- Location + Hotel
- Location + B&B
- Bed and Breakfast + Location
- Best Guest House in Location
- Hotel, B&B, Guest House Near Me
That’s a handful of examples and a good SEO agency will be able to find all the good results and rank you for those. They can also help you get listed in the Google Map search, this is great for being found on mobile devices which is really important for modern Hoteliers.
You can tie this in and use it with your social media marketing, make sure you are again found in the area(s) you serve and start to see the bookings come in direct. All you need to do is then encourage people to pick up the phone and call you to book. You can offer better deals for the telephone bookings – you are just (usually) not allowed to offer a deal for booking directly on your website. Take advantage of that loophole.
Work with an SEO company to improve your travel listing rankings, and then start dealing with customers directly instead of throwing money away to the booking sites, when they are charging so much, and making unlisted hotels suffer. Contact us to find out more.