According to Travel Weekly News, 90% of people do all their holiday research online, while 80% of people book online. And out of those who book hotels, research published in Forbes Magazine shows that 70% of hotel bookings online come from OTAs.
The greater insight hoteliers have on their position in the market at any given point in time, will give them greater confidence setting rates and more control over distribution and working with the right partners.
Below are 3 tips on how Hotel Managers can become more data-driven and increase direct revenue.
1. Always know who is selling your inventory and at what price
Research by RateGain reveals that up to 98% of 4-star hotels offer their rooms cheaper on OTA sites rather than on their own. How can you expect customers to book directly with you at a higher price than carrying out the same process via an OTA?
An effective hotel channel management strategy is imperative for maintaining the partnerships and business relationships that are necessary in order to optimize sales and maximize revenue.
Through the use of a hotel channel manager, all parties involved in the distribution of hotel rooms or other hotel services can gain live access to key information, such as rates and availability.
Some of the benefits of effective channel management include:
- Optimize direct bookings and revenue
- Avoid overbookings
- Visibility of pricing on different channels
Furthermore, some channel managers even offer sophisticated features that allow you to pre-select rooms exclusively for direct reservations, re-import reservations from OTAs which have not synced to your database and automatically stop sales across all channels.
2. Use Data To Implement Dynamic Pricing Strategies
Let's face it, determining the right pricing strategy for your hotel is no easy task, given the array of factors to consider including occupancy, seasonality, guest segments, and competitor prices.
This is where market intelligence and your own property data can help inform your business decisions and help you successfully execute the following dynamic pricing strategies:
- Occupancy-based dynamic pricing: Based on supply and demand, this strategy involves increasing room rates when demand exceeds supply. For example - if 95 out of 100 rooms are occupied, you can charge more for the remaining 5 rooms.
- Forecast-based pricing: To implement this strategy, you should have a clear understanding of your hotel's historical occupancy data for the last couple of months, and for the same period during the previous year.
- Competitor-based pricing: You can only come up with this strategy when you understand what your competitors are charging. Start by reviewing the OTA channels you currently utilize and take note of what they offer.
- Length-of-stay based pricing: You can make changes in your room rates based on both the arrival date and the total duration of a guest's stay. To come up with the right pricing, you need to review demand, forecast, business on the books, and even the price sensitivity.
These are just a few ways that data can help you implement dynamic pricing strategies that will ultimately improve your bottom line.
3. Know your Customers' Online Journey and Booking Behavior
A recent report by Google and Phocuswright reveals that nearly 6 in 10 travelers believe brands should tailor the information based on their personal preferences or past behaviors. Nearly 80% of travelers may be more likely to sign up for your brand's loyalty program, while nearly 40% would pay more in return for receiving more tailored information and experiences.
Our own research reveals that personalized messaging featured in shopping activation and shopping recovery widgets not only reduces booking abandonment rates but lifts direct bookings by up to 60%.
All this demonstrates the importance of knowing your customers' online journey and booking behavior so that you can tailor their experiences so they are more likely to book directly on your website. You need to understand what your guests want in order to provide relevant offers and experiences to them. Helpful resources to find such information include surveys, online reviews, and Google Analytics.
By exploring existing data from various sources, you will be better able to give your guests what they want.