Six Tips to Boost Direct Revenue in 2016
By Jean Francois Mourier, CEO of REVPAR GURU
According to Phocuswright, 74% of independent hotel reservations in Europe come from an OTA. As such every hotelier's 2016 new year's resolutions should include boosting direct revenue for your property. As you know, by increasing direct revenue, you can decrease the cost of acquisition and increase repeat business. It's a win/win situation for every property – no matter the property type, location or star rating.
A surprisingly large number of hotels continue to offer their best room rates through the OTAs rather than their own website. Because most consumers are price-conscious shoppers (meaning that they will most often choose the room with the cheapest rate), it makes sense to offer the same rate on the OTA channel and the direct channel (where your property keeps 100% of the booking amount), to ensure that less consumers will choose to book through the expensive OTAs.
Use loyalty programs to incentivize repeat customers
As I mentioned earlier, it is much more expensive to secure new business (6 to 7 times more expensive, in fact!) than it is to keep an existing customer. Marketing Metrics also demonstrated that "the probability of selling to an existing customer is 60 to 70%... the probability of selling to a new prospect is 5 to 20%", once again making it a more profitable business practice to secure repeat business from prior customers, instead of searching out new ones. One of the best ways to secure repeat business is by implementing a loyalty program and letting customers know that they should book directly in order to earn and/or redeem points. By doing so, you are converting guests who started out as OTA customers to direct customers on future bookings.
Ensure that the booking engine on your site is easy-to-use and accept all of the different forms of payment
This one is pretty self-explanatory… basically, make sure that you don't confuse potential guests with the booking process and that you accept all possible forms of payment (including Paypal, Bitcoin, etc.) to ensure that you aren't losing possible direct bookings. Which brings me to my next point…
Simplify your pricing options
Consumers are looking for one thing: a good price. They don't want to have to try to figure out eight different pricing options in order to find the best rate. As with your booking process and booking engine, it is always best to keep it simple, silly (KISS) when setting your rate options.
Make it easy to find the 'Book Now' button on every page of your website
Some consumers may assume that you don't offer a booking engine on your site if they don't see a call-to-action clearly displayed on every page (as you never know which pages they will look at before deciding to book). The button should be large, brightly colored and placed in a position of prominence to garner as much attention as possible.
Sign up with all of the last-minute booking apps/sites
This year, oil prices will decrease which means that there will be more walk-in guests arriving – either by plane or car – with no prior booking. In 2016, hoteliers should have a complete revenue management strategy designed to attract last-minute bookers and should use all of the last-minute booking apps/sites (like HotelTonight) to reach as many potential guests as possible within a shorter booking window.