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The reading of all the reactions regarding my last article (Is Guest Experience the future of hotel marketing?) has clearly shown that the market has started to turn more towards Guest Experience Marketing than to the traditional Direct Booking strategy.
But should you only focus on the Guest Experience? If yes, are we then witnessing the twilight of direct booking?
Here is a brief comparison of these two strategies and my personal conclusions.
Are these two strategies very different?
Direct Booking is very simple. It involves increasing your percentage of direct reservations to the detriment of the OTAs.
However, Guest Experience Marketing relies on a fabulous customer experience in order to increase loyalty and word-of-mouth.
It is interesting to note that these two strategies intersect and even complement each other:
First of all, the main goal of Direct Booking is not at all to provide you with only new direct customers.
Guest Experience Marketing therefore develops and intensifies Direct Booking.
Secondly, having a new customer who books online will allow you to have their e-mail address as well as a direct relationship with them. You will, therefore, be better able to offer them a custom experience in your hotel according to their needs.
Direct Booking, therefore, facilitates Guest Experience Marketing.
The complexity of these two strategies
It is interesting to examine the profitability and the underlying complexity behind the implementation of these strategies.
WARNING 1: Some of the items below have only a very minimal influence. You must, therefore, make a clever proration to observe their real cost on your direct bookings.
WARNING 2: But just like for the Direct Booking column, we are comparing here the necessary IT solutions for the implementation of these two strategies.
And what about profitability?
It is clear that the implementation of a genuine Direct Booking strategy is much more complex now than it was before. In the past, you just needed to “counter rate parity.” But this complexity is not really a problem as long as it remains profitable.
Here is a calculator that allows you to discover the true cost of your Direct Booking strategy in just a few minutes:
*If you have questions on how to use this calculator, please do not hesitate to post a comment on this article.
Too many companies have unfortunately surfed on the Direct Booking wave. There have been some very beautiful ideas (price checkers for example), but there have also been cases of misuse (Business Listings). This has resulted in a serious decline in profitability for hotels.
However, beyond this situation, one thing is clear: The great magical era of direct bookings is not over yet. It is just important to intelligently select your investments and add Guest Experience Marketing along with that.
Therefore, do not stop trying to improve your direct bookings! That would be a huge mistake which would affect your profits. Simply revise your way of addressing the problem and do not forget that:
- 27% of bookings start by word of mouth;
- 38% of travelers tend to return to the same city.
Times are changing; we must adapt and be ready for the next turning points in our business!
- 345 Hotels analyzed during the covid-19 crisis - October 22, 2020
- Why is the UDR a matter of course in the hospitality world? - September 23, 2020
- To what extent will AI be likely to replace humans in a hotel? - August 4, 2020