Q: I got a bit of a shock reading the industry news recently, to see that a couple of accommodation / food operators had been forced to shut after an overnight drop in bookings. Both cited changes to the location algorithm of booking platforms, which meant they were no longer listed in major town and city locations. We’re based about 3 miles from the centre of our nearest town and get most of our bookings through the platforms. I’m worried. What should I do?
I’m familiar with the stories you are citing, but for those who aren’t, two of the major booking engines changed their geographic radius applications for some of the major towns and cities.
The result of these reductions in radius was that businesses who previously found themselves included in the search results of a major town or city, now found themselves isolated outside and only searchable by the village or specific location in which they operate.
The dramatic drop in bookings resulted in an overnight closure, which is an unfortunate outcome for all those involved.
The problem with third party booking engines of any type is that you just can’t and don’t control what they do. You can control certain parameters relating to your business such as price, availability, marketing copy and imagery, but beyond that, the site is simply that – an opportunity to list your property. They control everything else.
The commission (although you can of course choose to leave), listing controls such as how and why businesses are listed in a specific order, the search parameters and algorithms and even potentially the number and frequency of bookings that you receive.
It’s also highly competitive and you are therefore more sensitive to stock changes in your location – if more hotels open, the radius is only likely to get smaller. The income is fine while it lasts – you know your rate of commission and terms – but developing an overall reliance on them as your only stream of business is a fairly big, but common risk to take.
From the perspective of the booking engines, they aren’t wrong. Their commitment to those who are booking is to provide the most relevant and informative listings and to be as specific as possible about the location.
Fight this, and you are fighting the very fabric on which these engines have been built. I am a little more pragmatic personally when it comes to booking – I look at the location on the map and decide if that’s where I want to stay – but the engines say that they need to assume people don’t do this and that the information they are presenting is as useful as possible.
Building your business around the engines is risky. You can take the good while it lasts and accept the fact this could mean the demise of your business if it changes (which it might never do), or, as is my preferred option, you can diversify your income and reduce your risk so that if something does change, you only have a certain amount to recoup.
Don’t forget, geographic changes are not the only ones which will affect your business. Viator / TripAdvisor have announced job losses and commission rate increases, because they simply aren’t making enough money.
As a business, you can build a certain commission tolerance into your prices, but there will come a point where those commissions may reach a level where you don’t gain bookings because your prices are too high, or you don’t make enough money because your margins are too low. These are just some of the examples of how having limited control of your own bookings is not a good thing.
So what’s my advice? It’s to build a multi-faceted sales pipeline and use it to diversify your risk. That way, if one thing changes, it isn’t a disaster. Here’s how I’d do it:
Diversify the pre-sell
There are two approaches to promoting a hotel which can be done separately or together. The first is to capture intentional visits i.e. those who are already travelling to your area, for work or for pleasure. The second is to inspire people to visit you and your location specifically, and to be the ‘destination’ at the end of it all. Both have merit and it’s up to you how and where you focus your efforts.
When it comes to capturing intentional visits, I would:
- Look at how and where your destination is promoted and how you can be part of that. Local DMOs still play a role, the booking engines too and if you’re not in partnership, then you don’t have a chance at capturing this part of the market.
- Look at the big employers in your area and their accommodation protocols. They may operate with RFP frameworks (in which case get yourself sorted for that), or they might have a more relaxed partnership arrangement with teams that they like. Either way, get in touch with them, and invite them to come and look around the hotel. Don’t forget they may need fixed rates throughout the year, so don’t be afraid to create bespoke pricing models to capture these guests.
- Consider what happens in your local area and how you can get involved as an accommodation partner. Are there major festivals or events in the town, do you have a good MICE offering in the town and therefore conference bookings and so-on These are fluctuating markets throughout the year, but they are ready-made guest bookings if you’re prepped to take them.
- Use your locals as ambassadors. Local people are best placed to advise visitors where to stay and what to do when they are in the town, yet most businesses omit them. Target specific activities to encourage locals to visit, then offer them a show-round and a reason to return. First off, you’ll benefit directly from their visit, and then you’ll benefit from the people they recommend to you.
- Get your SEO and website right. One of the biggest barriers to direct sell is that your website can’t be found, or if it is found, then it can’t be booked easily. You have to create a seamless booking process, and you need to make sure your business is ranking for relevant terms to get people there in the first place.
- When it comes to inspiring visits, this is where your marketing & pr team comes in. This is all about telling the world why and how you are special and can be a combination of words and images. Think about what you do really well and then find the platform to tell people about it. My top tip for this is to ALWAYS make sure you are maximising the platform you are using – you don’t have to use them all, but you do have to use them well. If your social media isn’t driving bookings, get someone on board to train your team, or do it for you. If you don’t get any press coverage, then ask a PR agency to help you get some. Being a destination in your own right is about painting a picture and inspiring people to visit. It’s a longer haul option than capturing those who are already coming, but get it right and you have the potential to be sold out always, without a penny of commission in sight.
One final tip for attracting bookers – don’t forget the added value. Booking engines eat up some of your profit with some pretty large commissions, which means you start out making less money than any booking direct. Look at the ‘commission’ as an opportunity to add value to your guests by offering incentives and added value for them to book direct.
It doesn’t have to be expensive, but it does have to be exclusive and aspirational – something that makes a client choose booking direct over booking through a familiar engine.
Maximise the experience
Once you’ve captured the people, you need to maintain the same, if not better standards than those you offer indirect bookers. The booking engines have a slick process for obtaining reviews of stays and you won’t have this option if someone books direct.
You need to establish a process whereby you can capture the positive vibes, preferably gain a review (think about Feefo or TrustPilot or Google to do this) and secure word of mouth recommendations from clients.
Don’t let them leave without a sell
Whilst you mustn’t tip into hard selling and hound people with all the reasons they should visit you again, when they haven’t even left this time, you do need to work out how and why they will return and then do everything in your power to bring them back. I would:
- Look at a loyalty scheme: if they’re booking for work, look at a scheme for the individual or the business that keeps them choosing you over others. If they’re an individual on holiday, think about why they visited you in the first place and why they might visit you again.
- Capture their data. They are right here in front of you and you want the option to market to them again. There’s never a better time to ask their permission.
- Ask them to recommend you. Look at how you can encourage their friends or colleagues to get on board and why they might want to visit you too. It could be the offer of a couples retreat, a prize draw for both parties, think about how you can encourage them to recommend a friend.
My overall advice. Don’t rely on the booking engines. Enjoy the business that they deliver to you, but see it as a boon rather than a mainstay!