Why direct bookings matter

When it comes to direct bookings, there are two key customer streams; existing customers who are returning to you and new customers visiting for the first time. These two audiences have to be tackled in different ways.

Building loyalty with existing customers

I recently did an exercise with a client looking at their bookings over the last three years; one statistic in particular stuck with me. The business has a lot of corporate custom, and each year, approximately 35-40% of their total sales are from repeat guests; even though this represents over a third of the business, of these repeat customers, only 41% book direct with the hotel, the rest rebooking through third-party providers. This repeat custom was therefore costing the business more than £15,000 per year in commission fees alone – a total and unnecessary waste of money! Speaking specifically with a cross-section of these guests, common reasons for using booking engines include ease, and difficulty remembering the hotel’s name.

This statistic is powerful and although I hesitate to do mid-year performance analysis, the initial changes that we made to marketing are already having an impact on commission. For the first six months of the year, average monthly commission is down from £1,250 to £690, and the direct bookings have increased from 41% of repeat customers to 59% – a whopping increase for the business. Achieving this improvement has been done in three ways:

1. Specifically asking guests to rebook direct and rewarding them for doing so. By reducing the amount lost through commission, we have been able to increase the value of each individual booking to the business. This means there is money in the budget to reward them for their loyalty, and incentives such as wine with dinner, and vouchers for the gin bar have both proved popular.
2. Contacting the business as well as the individual. By cherry-picking businesses that place fairly regular but inconsistent bookings, we have been able to reward businesses with loyalty rates and in one or two cases, have even worked with the business to provide hotel stays as employee perks. Not all of the businesses have been receptive, due to challenges with procurement processes, but it has been effective enough to warrant doing.
3. Communicating regularly. You’ll be surprised how few hotels communicate specifically and regularly with their repeat guests.  They may do an emailer to the entire database, but not to this specific segment. By sending regular reminders, offers, updates and even a targeted promotional item, customers are starting to make more direct bookings and less booking engine ones.
4. The perk is that these customers are already on your database, and there is no need at all for them to use booking engines. This means where your website ranks and performance have a limited impact and you can make small but mighty changes to your revenue, quickly and simply.

Gaining new customers

Gaining new customers is more of a challenge and you will find it difficult to get your own website, with its several thousand visitors, to rank anywhere close to the booking engines who have hundreds of thousands of visitors and much bigger marketing budgets. That doesn’t however mean it is a lost cause, but you do have to be committed to pursuing this custom and understand the impact will be more long-term. You can either use booking engines to drive your new custom, with a top-quality loyalty programme running behind it, and / or invest time and energy into pursuing direct bookings yourself, which will take longer to offset the commission costs, but will have significant long-term benefits.

You need to accept you won’t exceed the rankings of the booking engines, but you can be high enough up the list to attract attention from anyone searching. Your focus needs to be on using available digital platforms to drive awareness and rankings. Search engine rankings are not an exact science, but you can influence rankings quite easily with some of the following tricks:

Keyword your site well – think about what someone will be searching for, and make sure you have a page about it. For example, if people might search “Hotels Oxford Town Centre” then make sure you have a page that talks about your hotel in Oxford Town Centre.

Start a blog – blogs, populated with keywords are a great way to improve rankings; a) they provide space for you to add more keywords, b) they keep the site current and c) they give you scope to link your business to others in the area. For example, writing a blog about guests visiting the Eden Project Bulb Mania will help you appear on the list when someone searches for hotels near the Eden Project (if you are actually nearby of course).

Encourage reviews and PR – getting external sites linking to yours makes it more relevant. Inviting journalists to visit and review, encouraging bloggers to come along, using review sites, all link back to your website and help improve ranking.

Drive traffic via social media and email – don’t forget your own platforms; sharing visual posts and interesting information via social media and email encourages visitors to the site which helps maintain and improve rankings.

Direct bookings can be hugely lucrative, certainly more so than booking engines, but whatever you do, you need to be consistent,  specific, analyse the results and expect gradual changes over time.