The invention of the internet proved to be a boon to the hotel and resort industries. Any sized chain or group could benefit from multi-channel exposure through Online Travel Agencies (OTAs), brick and mortar travel agencies as well as directly to the client. As internet traffic exploded and smartphone technology evolved, OTAs were able to dominate the travel business with major market presence and penetration. Hotels and resort operators began to rely solely on OTAs, such as Expedia and Travelocity, for bookings and paying the platform commissions on each sale. Jean-Dominque Brivet of D-Edge, a hospitality solutions company, was quoted as saying “The first step is understanding that doing everything with OTAs and not working on that direct distribution is not a good thing in the long term.” With recent advancements in back end technology, operators can now drive those profitable direct bookings as well as managing the customer experience from beginning to end.
Direct Bookings Drive the Bottom line
A recent study by SHR Group found that direct bookings fell one point to 38% of total bookings of 2000 international hotels that were surveyed. Inefficient campaigns and soft ROI may have led to the slight decrease in direct bookings, but travelers are becoming more comfortable interacting directly with brands as technology and processes improve. Consumers are also becoming more price conscious when it comes to travel and will seek out deals on the company’s website. Direct bookings can bring 4 major benefits to hotel and resort operators:
- Reduced marketing costs and zero commission sales
- Ability to control and manage the entire customer experience
- Faster potential to sign client to company’s rewards / marketing program
- Builds brand loyalty with positive and exceptional customer interactions
Focusing and driving direct bookings will boost profitability and positively impact the bottom line in both the short and long term.
AI Technology Offers All-In-One Solutions to Build Direct Bookings
With focus shifting towards more profitable direct bookings, many hotel and resort brands are adopting technology that can streamline and extend the marketing process. Brand presence is a key element to generating direct bookings and technology that utilizes AI infrastructure can bring an advantage when it comes to advertising and marketing through online channels. Back end technology can monitor the competitive landscape in real time and offer dynamic pricing and packages that would be the most impactful at that particular moment for that particular web user. AI based solutions can also monitor ad spending and traffic trends and make recommendations to extend reach and capture more audience. By using current and historical data points, technology can identify challenges as well as opportunities with the singular goal of creating more direct bookings. Detailed reporting is also a function of this type of technology and operators can quickly monitor the effectiveness of any suggestion or strategy deployed by the technology. As the infrastructure learns, decisions and recommendations will become faster and more effective, delivering positive impacts to long term growth of direct bookings.
Technology Benefits all Hotel Categories
The challenge for smaller hotel and resort groups is getting washed away in search results when potential customers browse OTAs. Increasing direct bookings can greatly impact profitability for those smaller brands and adopting advanced marketing technology can help drive those all important direct bookings. Advancements over the last few years have opened accessibility to this type of technology through outside platforms but having in-house technology can be considered the optimal way to reap the benefits of AI powered marketing. Automatic reporting and notifications combined with ultra fast decision making can create real opportunities for hotel and resort operators. Direct bookings also influence loyalty program registrations and smaller hotel and resort brands depend on those marketing opportunities to drive revenue.
Building the Brand Directly Boosts the Bottom Line
Multi-channel marketing has driven the travel market for decades and having additional outlets to acquire bookings will always be part of any operator’s marketing strategy. With advancement of AI technology, hotel operators can optimize marketing strategies and increase high margin direct bookings. Smaller chains and groups can especially benefit from this powerful technology by extending their reach and presence within the travel marketplace. In addition to being highly profitable, direct bookings allow the brand to control the customer experience from beginning to end, ensuring the best possible interaction and potential conversion to the brand’s loyalty program. Positive direct booking experiences will contribute to repeat patronage and drive long term business from that individual. As accessibility increases, AI powered infrastructure will become a valuable tool in boosting those highly coveted and profitable direct bookings.