Hotels are grappling with the challenge of losing revenue to online travel agencies (OTAs), a long-standing issue exacerbated by the hefty commissions these agencies take. Despite the perceived convenience associated with OTAs, hotels are recognizing the urgency of reclaiming direct bookings. To address this, leveraging platforms like Facebook Messenger and Apple Business Chat for seamless communication, combined with robust loyalty programs, emerges as a strategic solution. By fostering direct engagement with guests, hotels can cultivate lasting relationships and enhance the guest experience, ultimately driving greater loyalty and revenue.

The Situation: Hotels are losing money to OTAs

Hotels have continually struggled with direct bookings over the years. They have these “middlemen” known as online travel agencies (OTAs), which come at a cost. We know that OTAs can charge up to 30% in commissions on hotel bookings, which cuts into the hotels’ profitability. Cutting out the middleman not only benefits the hotel, it also gives an incentive to the guests that are booking directly. Thankfully, in 2024, hotels are expecting an increase of direct bookings. 

Another consideration is the fact that guests want personalized experiences and offers during their stay. Specifically with Millennials and Gen Z, they are seeking individualized experiences, and 61% of consumers are willing to spend more with companies in order to get that personalized experience. 

The Problem: It’s “easier” to book through an OTA

There is a stereotype that it is “easier” to book through an OTA such as Expedia. 41% of travelers prefer to use OTA’s, like Expedia, Hotels.com, and Booking.com. These OTAs charge high commission fees and they will continue to rise every year, which can be harmful to hotel profits in the long run. We know that profit margins are slim as it is, especially with increasing interest rates on real estate assets and labor costs. Another problem with booking through an OTA is that the hotels don’t get much information about the guest that is booking the room, and the hotels have less control over guest experience since the first point of contact with an OTA and not the hotel directly. All of these factors compound to make direct bookings more important.

The Solution: Enabling quick/direct communication 

So how can we get more direct bookings? Well, it comes back to that ability to customize and personalize the experience for guests. Guests today live for personalized experiences and specific offers, especially the younger generations. Another way to get more direct bookings is using platforms like Facebook Messenger and Apple Business Chat to start a conversation before your guest even checks in. If your hotel already uses guest messaging, it will give an additional way for any guest to get in contact with you outside of their stay. In fact, we’ve had properties where previous guests have texted the hotel saying, “I’m going to be in town again in a couple of weeks - can you book me a room?” That’s the ideal situation that we are striving for. 

Another thing to consider are your loyalty programs. This is what keeps your guests coming back to your hotel, as if they feel connected to your brand. The guest is more likely to go through your website or app and make a direct booking, instead of looking for the best deal because they already have an established relationship with your brand. With guest messaging you can contact guests outside of their stay and they can even book a room with you that way.

The hospitality industry faces a persistent challenge in the form of revenue loss to OTAs, exacerbated by substantial commission fees and a disconnect from guests seeking personalized experiences. However, by prioritizing direct bookings and embracing innovative communication channels, hotels can bridge this gap and forge stronger connections with guests. These efforts not only enhance guest satisfaction but also bolster revenue and brand loyalty. As hotels look to the future, embracing direct booking strategies that prioritize personalized engagement will be key to thriving in an increasingly competitive landscape.

If you want to learn more about direct bookings, check out this recent webinar where we dive deeper into guest messaging and how it can help you get more direct bookings. 

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