Hotel Retailing: It’s Time For a Change
An Interview with Pierre Chapoutot, Founder of Direct Booking
By Alan Young, Co-Founder and President of Puzzle Partner
After opening a hotel with his family in Marrakech in 2010, Pierre Chapoutot learned, first hand, the difficulties so often experienced by independent hotels when promoting their services and inspiring direct bookings.
During a period of low tourism in Marrakech, Pierre's sudden reliance on bookings funneled through OTA platforms made him acutely aware of the high costs of acquisition associated with these companies. This represents a common obstacle for hoteliers, as the art of conversion proves increasingly challenging across a landscape that is continuously redefined by heightened guest expectations. "I knew there had to be a better way," he explained, and so, Pierre set out to find a solution.
With years of extensive hotel distribution research under his belt, Pierre had a unique understanding of the growing demands of hotels and travelers alike. Realizing that personalization and distribution are two sides of the same coin, he knew that if he were able to solve the personalization problem, he would also solve the distribution problem. And so, Direct Booking (direct-booking.com) was born.
Highly Customizable Retailing Technology
When Pierre first opened his hotel in Marrakech in 2008 - 2009, between 50 and 60% of the property's reservations relied on OTAs, which, in turn, cost the property 30% in commissions. Understandably, this was unfavorable to the hotel's bottom line. "I knew from the beginning that direct booking was the solution," Pierre explained. "I just had to find out how by answering the question: what is the best reason for the guests to book direct? I knew we had to look at the evolution of guest behaviors. After all, today, 90% of travelers want personalized experiences that meet or exceed their expectations; no one wants one-size-fits-all or irrelevant offers anymore.
Pierre also observed the change made by the airlines in their a-la-carte shopping model. It's an intelligent model that offers travelers attractive rates, inspires direct bookings, and generates additional revenue. In 2019, total global ancillary revenue for carriers was estimated above $80 billion. So, Pierre thought, why not apply this model to hotels that have a greater number of services that are so often underutilized?
The Direct Booking platform leverages highly customizable retailing technology to empower hoteliers through the power of personalization. On the property side, hoteliers just have to set up their offer by clarifying conditions, and on the user side, guests simply choose their preferred hotel criteria. Implementation is seamless; once hoteliers register their property and configure their offer, they have the choice between two settings. They can select a widget that lives on the hotel website or, alternatively, a stand-alone version similar to a classic booking engine. With the input of a few lines of code, Direct Booking technology is functional and ready to drive conversion rates.
An Industry in Need of Change
When asked if the hotel industry was in need of a change to standard booking procedures, Pierre answered, "I think the numbers speak for themselves. When 86.7% of all guests visit the hotel's website prior to making a booking but, at the same time, 71% of online reservations are intermediated by OTAs, we can't deny there exists a malfunction in the booking process."
"What is the point of spending to set up acquisition strategies with an average conversion rate of 2.2%?", Pierre continues. "The outcome cannot be to pay more directly than commissions already lost through intermediation."
Since the onset of COVID-19, the hotel industry has been hit, especially hard. Fortunately, Direct Booking is positioned to help hoteliers gain some much-needed business as travel restrictions are lifted around the globe. "As properties reopen, hoteliers know that the most likely source of demand — and perhaps the only source of demand — is going to be local travel. Our tool can be entirely customized to display staycations, hourly room rates, or services only that can efficiently address newfound domestic demand."
Travelers are also likely to invest more time researching and vetting prospective hotels, which represents an opportunity for hotels to convert guests with hyper-personalized offers. With the Direct Booking platform, the personalization process becomes streamlined.
The platform lets hotel guests choose the services that meet their expectations and will enhance their stay. Rather than starting the booking process by the old method of picking your room type and then possibly offering retail items such as a spa visit or a select location near the pool, the Direct Booking solution's booking path starts with items that will enhance a guest's stay. Once they have chosen the items they would like to have; then they are sent to the room booking portion of the process. Also, a significant differentiator is the fact that hotels can use the platform to sell items that are not attributed to a room booking, such as a Day Pass or a dinner reservation.
The Future of Direct-Booking
Hotels have always been the starting and endpoints of travel experiences, and yet, until now, hoteliers hadn't placed themselves as retailers. As a result, they never realized the need for retailing technology to better package their products and, in turn, create an online shopping experience that consistently exceeds the needs of experiential travelers.
"Now, perhaps more than ever, ancillary sales present a critical opportunity for hotels," says Pierre. "With Direct Booking as a distribution provider, hoteliers can enable the retailing capability that is needed to generate additional revenue and, simultaneously, increase guest satisfaction. In the realm of hospitality, it is all about making the right offers, to the right guests, at the right time, and in a way that feels effortless and is only available via a direct channel."
The days of hotels simply providing rooms are coming to an end; excellent service requires great personalization; after learning the guests' preferences, the platform will begin to offer them exactly what they want. Finally, hoteliers are in a prime position to become the ultimate retailer as they expand there on property offerings. Hoteliers that ignore the trend will find themselves at a competitive disadvantage. Moreover, this innovative booking technology will also empower hotels to advantageously compete against OTAs, differentiate themselves from vacation rentals, and effectively stifle the threat of tech giants before it occurs.
About Direct Booking
Direct Booking is passionate about helping hoteliers increase their direct booking traffic and thus, their revenues. By implementing a personalized booking environment and using artificial intelligence, the company is at the forefront of changing the way guests reserve hotel amenities and rooms online.
Our goal is to be the leader in personalized direct hotel bookings worldwide through the use of AI and a retailing platform.
To learn more visit http://www.direct-booking.com
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About Puzzle Partner
Puzzle Partner Ltd. is a boutique marketing agency focused exclusively on complex B2B initiatives for the travel and hospitality technology industry. We are experts at combining strategy and tactical execution in a way that doesn't just maximize a company's potential; it redefines it. By delivering influential content, marketing services, and public relations rooted in the skills of our team and tested through real-world experience, we help our clients gain visibility, raise their profile and ultimately increase their sales revenues. We incorporate a holistic blend of paid, earned and owned media, along with creative services, into an integrated communications strategy to drive brand awareness ahead of competitors and deliver impactful business results.
To learn more visit puzzlepartner.co.