Food for thought: The real future of direct bookings
By Martin Soler, Partner at Soler & Associates
The 50th edition in a bit under 24 month. Thanks for holding up this long :-). This one is about Direct Bookings, not planned that way but that's just the way things turned out after going through the recent news. Hope you enjoy it. Best, Martin. PS: If you're executive level, don't forget to sign-up for Tell Trends.
Food for thought.
The obsession of Direct Bookings
Direct revenue has unfortunately become a way to get attention in the hotel marketing world. The problem with such buzzwords being used and abused is that in the long run it is like conspiracy theories, all one needs to do it say the words and suddenly it isn't credible anymore. Yet there is inherent value retaining control and a fair share of direct bookings. The most recent debate of should hotel obsess about direct or not is really splitting hairs. Hoteliers should obsess about having a healthy distribution mix. That means a fair share of direct, OTAs and other channels. Too much direct is as risky as too much OTAs. It may look better short term as one believes one makes more profit, but long term one will soon notice how demand just doesn't match or become too expensive. To the defence of those campaigning for more direct, there is more often a lack than an abundance of direct revenue.
Brand-jacking on Google is about to grow
Google recently changed their trademark policy and it's not good news. In short, anyone who is somewhat affiliated with selling a hotel's rooms is now allowed to advertise on the hotel's name. And for those who know, protecting one's brand is the single most efficient way to ensure direct revenue. This concept that one needs to pay to protect one's brand is one pretty much created by Google and which has become a tremendous cash cow. Imagine having to pay to keep your front door from being taxed by third parties, that's pretty much what you're doing. But until now there have been some safety measures one could take to ensure things didn't go out of control. It seems even that party is soon over.
The long game for Direct Revenue
We can grow direct revenue. We can even guarantee that direct revenue will work on the long run, but it wont be through hacks and quick fix solutions. Despite the apparent "huge success" of direct booking solutions and increasing costs of advertising. Having looked at the numbers for hundreds of hotels, direct revenue in the independent hotel space is declining. The long game isn't a battle for price parity, suing OTAs for last room clauses etc. The long game educating guests and travelers to always check direct before booking. It's one that every branded or independent hotel can get with. One where we need to create a "Got Milk?" campaign for the entire industry and work on for years. Retail industry failed at doing just that and so Amazon and other major players are taking up the slack. If the hotel industry actually sat down and built a concerted global campaign in some years, direct would retain it's market share.
Tell Trends, more insights
Tell Trends will ship shortly. It's going to have much more insights than this newsletter from more experts who don't just have opinions, they have expertise in their domains. They can see where the industry is going and what is coming next. It's a paid news magazine that will be delivered online and off-line. If you're looking to see what is really happening in the hotel marketing and tech industry, it might be for you.