7 Things About Direct Bookings You May Not Have Known

7 Things About Direct Bookings You May Not Have Known

Over the last few months, as energy and food prices have increased, hoteliers are rightly looking at ways they can cut costs without impacting the quality of the product or service they offer.

One such area that most hotels could do with spending less on is that of commission, so we’re seeing a growing trend of hotels looking for new and creative ways they can reduce their reliance on OTAs and attract more of those bookers direct. This article looks at some of the lesser known facts and statistics that behind the science of converting more of your guests through your commission-free direct channels.

A good place to start is with the practice best known as ‘brand-bidding’. This is when OTAs or competitors bid on your brand name. Type your hotel’s brand name into Google and you may well see that an OTA or possibly even a competitor has ‘bidded’ on your brand name, meaning that they are running search ads to appear above your organic listing so as to beat you to the click. There’s obviously a cost on a pay-per-click basis for this form of advertising but it can be highly lucrative for an OTA to spend a less than a £1 to attract that click to their website and effectively sell you that guest back for typically 15-18% of the booking value which could range anywhere from a few pounds to a few hundred pounds. 

1. Brand-bidding rule 1: 

The ad in the search engine has to make it clear that only the third party’s brand name is used and it is not the company the user searched for. If you find that a competitor or an OTA is effectively trying to trick or manipulate the user to think that they are actually clicking through to your website, this is a big no-no from Google. It’s rare but it can happen.

2. Brand-biding rule 2: 

The brand name that was bid on may not occur in the actual ad copy, only in the title of the ad. A good one to look out for, but examples like the below are perfectly acceptable according to Google’s rules, where a competitor has effectively outbid one of our hotel ads for our client Native Manchester. In this instance, we made sure we’re keeping an eye on what they’re up to – they offer 10% so we’ll offer 20%. 

3. Metasearch engines are now used by almost every customer

A report from EyeforTravel and Fornova surveyed travellers in the UK, Australia, Canada, and the US, finding that 44% of travellers “always used metasearch tools”, 73% “did so regularly”, and 94% were “at least occasional users”. For those unacquainted, a metasearch engine (or also known as a search aggregator) is an online information retrieval tool that uses the data of web search to produce its own results. The most common examples in the UK are Trivago, TripAdvisor and Google Hotel Ads, the latter of which now dominates the market share of metasearch usage with a huge 73% according to the 2021 study conducted by the European Association of Hotels, Restaurants and Cafes. Getting Google Hotel Ads setup in your hotel, with correct rates and parity, should be a priority for hotels in 2023.

4. The hotel will always appear on the number one organic spot in Google’s metasearch

Keeping on the theme of metasearch, an often underutilised piece of digital real estate is the top organic listing, circled below, which is always reserved for the hotel website. That is to say that the hotel only needs to set up with an integration partner (most commonly the website booking engine) to feed rates directly through to this position without incurring any cost. The key of course, is to ensure your rates are managed correctly so that your rate appears lower than the OTAs bidding for the booking, and that the benefits of booking direct are clearly communicated in the subtext below the hotel name. Google will even do you the favour of adding the ‘official website’ label to entice users to click.

5. Direct bookings are officially on the rise!

In a survey conducted by GlobalData last June, 39% of consumers said they would typically book direct, compared to 17% who would opt for OTAs and comparators. Importantly also, according to Skift, 56% of independent hotel bookings came from direct channels in 2020, up from 39% a year earlier, reflecting a 17% increase. 

6. 55% of hotels feel pressured by OTA terms and conditions in 2021

This was one of the key findings from the HOTREC survey featuring approximately 3,900 hoteliers of different sizes across Europe, with many citing that high commission rates, undesirable discounting and unfavourable cancellation policies were all frequently imposed on hoteliers at their will. 

7. The OTA market share breakdown

Finally, the market share of the OTAs across Europe makes for interesting reading with Booking Holdings (Booking & Agoda), as expected, dominating market share with 71.2%, followed by a very far off second place of Expedia Group (Expedia, Hotels, eBookers & Orbitz Travel) at 12.5% and lastly HRS with 6.7%.

Interestingly, Airbnb represents less than 1.5% of all bookings.