Why the online bookings power shift is more manageable than hotels think

Online distribution is growing at a faster pace than the entire travel market. The American Hotel and Lodging Association (AHLA) estimates 480 online bookings are made every minute, across the US, alone. It’s a fascinating statistic that emphatically demonstrates how much the hotel industry has changed over recent years.

We know more people are travelling than ever before. Figures from the UN World Tourism Organisation show that in 2014 the number of people travelling internationally reached 1.14 billion – and it forecasts growth of around 4% during 2015.

This heightened desire to travel and see parts of the world that 25 years ago would have been considered out of reach, and of course too costly, has been spurred on by the Internet economy, the desire for experiences once reserved for the elite, and the sheer volume of information that’s available to travellers making it more accessible.

But if we dig deeper into this observation, the broad accessibility of information isn’t just changing a handful of travel industry trends, it’s completely shifting the balance of power – from a consumer economy with intermediaries, to a user economy with “self-service”.

The consumer economy is now a user economy

Travel knowledge and information used to lie in bricks and mortar, dominated by brands and agencies, renowned for delivering an expertise that could be rarely challenged.

But the Internet has caused a tipping point to occur enabling hotels to sell themselves to potential guests who appear to know precisely what they want, and the research they need to carry out in order to make their travel aspirations a reality.

Everything from photos through to guest reviews are creating information overload, as user generated content becomes a critical variable in the consumer’s battle for power. In the early days, travel agents and experts influenced consumers with experience and brochures illustrating what was available. Later OTAs, and especially Booking.com, revolutionised this idea of putting the traveller in control by providing more content and information available at their fingertips. Now we see the user economy taking control with the growth and development of Airbnb, Uber, Flip.to, and many others enabling self-selection.

Travellers can have an authentic experience of living like a local, in the neighbourhood, visiting their host’s local favourites – and quite often at a fraction of the price. Travellers are willing to transact beyond hotel rooms, and as a result guests are becoming more efficient at making their final booking decisions.

The new doesn’t always replace the old

After 26 years in the hotel and travel industry, I’d like to think that the old (or perhaps mature…) can continue to be relevant. And it is.

Many travellers still rely on the services of travel agents – in fact research shows that in 2014 18% of American travellers used traditional travel agents, compared with 12% in 2013.

Global distribution systems (GDSs), which have been around for decades, continue to service a huge volume of travel and accommodation bookings – an estimated 62 million in 2015 –demonstrating the staying power of expert advice from travel agents and wholesalers with enhanced networks and online tools.

That said, there are always going to be new brands or industry challenges that force hoteliers to stay fresh and on top of their game. That’s nothing new and it will always evolve. For hoteliers, it’s a question of managing and adapting to those changes. It’s evolution, not revolution.

The bookings gauntlet has been thrown down

Hoteliers must think global and act local in order to capitalise on the guest’s winding path to purchase. We live in a multi-screen world, with many points of conversion, and it’s important to remember that rate is not the prime decision tool. Yes, price is a big differentiator when assessing the challenge presented by the likes of Airbnb, but there are many more factors to consider. Hoteliers can take on the challenge in many ways. One example is to become more service-orientated, focusing on the elements of a hotel that home-sharing can’t offer – such as tour guides, chauffeured drivers, dry cleaning, restaurants, gyms and a bounty of amenities and loyalty points.

By offering an extraordinary guest experience hoteliers can really capitalise on the impact of user generated content – reviews, social media check-ins, comments, ratings – and in turn use these positive affirmations to drive bookings.

A hotel’s biggest weapon in the fight for bookings is knowing the business mix inside out. Ask where your bookings are coming from. Ask what your local competition is doing to fill their rooms. Ask how you are driving your online and offline business.

It is truly all about the details.

Hoteliers need to find balance and control of how your rooms are being distributed. Take charge of your bookings mix and ultimately your business.

Cloud technology, is levelling the playing field for independent hotels, helping them compete in a fast-changing market. It gives hotels of any size the power to be exactly where prospective travellers are – without the need to invest heavily in IT and systems providing more time for creativity and caring for your guests.

The multi-channel, multi-screen world is now completely accessible, giving hoteliers greater opportunity to reach, attract, and convert global guests. Chain hotels have been doing this for years, reaping the benefits of having a visible online presence to ensure they turn lookers into bookers. It’s time for independents to take charge, challenge the status quo, and compete in the same way.

5 tips for independent hotels to drive greater efficiencies

Independent hoteliers need to devise strategies to gain more business, more efficiently, in order to out-pace and out-perform competitors. In particular, the digital experience is pivotal for today’s independent hotelier, as more travellers turn to mobile devices and online platforms, including social media and IBEs, to make bookings.

As travel brands and consumers continue to interact online as well as offline, here’s a look at 5 ways independent hotels can drive greater efficiencies.

1. Better website performance to drive conversion

Independent hotels need to optimise their website with clear call-to-actions and rich local content in order to maximise engagement with their website visitors. For instance, by using cloud technology to create a fully integrated booking experience on your website, you can:

Create a clear path through the booking process with a minimum of clicks.
Reach international travellers with offers in multiple languages and currencies.
Make your deals and special promotions more visible on your website.
Up-sell with value-added extras (breakfast, late check-out, etc).
Along with clear call-to-actions on your website, having high-quality, SEO-optimised content will improve your search engine rankings and strengthen your value proposition in the marketplace. By focusing on strengthening your web presence, you can increase your level of conversions and revenues through direct bookings.

2. Digital platforms across all devices

Travellers need to access data on the move, whether it is via smartphone, tablet, or laptop. And with mobile bookings expected to exceed one-third of all online bookings by 2018, it’s essential for independent hoteliers to maintain a strong digital presence across a variety of devices.

In a move to capture more of the lucrative mobile market, travel brands like TripAdvisor, Expedia and Booking.com have developed key strategies for mobile platforms. Independent hotels need to follow suit with custom apps that help target and bring in more direct customers. For example, Choice Hotels Book Now! app utilises smartphones’ built-in GPS capabilities to allow travellers to locate over 5,800 properties worldwide, book automatically using previously stored credit card information, and rack up rewards in the process.

3. Pricing

To stay competitive in the transparent booking landscape, independent hotels need to review and re-optimise their pricing regularly. As a case in point, online retailer Amazon makes more than 2.5 million price changes every day in order to provide the most competitive pricing on the web.

Hotels must adopt the same mentality when it comes to pricing, by constantly monitoring competitors’ prices and adjusting their room prices accordingly to maximise revenue per room. Using a revenue management system (RMS) with dynamic pricing capabilities, you can track your competitors’ pricing and, within your specified parameters, adjust prices on your OTAs and meta-search engines automatically with your channel manager – helping you stay one step ahead of the competition.

4. Push pricing updates across all distribution channels

Airbnb is a prime example of a company that has solved the puzzle of predictive pricing for its customers who often have trouble correctly pricing their rooms. Integrating the basic question of “How do I price my room?” within their pricing algorithms, Airbnb’s pricing suggestions take into account a variety of factors including the type of room, the local neighbourhood (value), and nearby amenities. As their experiments revealed, users that chose to use the suggested prices got three times as many bookings as those who did not. Clearly, better pricing intelligence drives more bookings.

Using your channel manager as part of a cloud-based product suite, you can ensure that your best rates and current room availability are automatically updated in real-time across all your booking channels including OTAs, GDS, wholesalers, travel agents, and your own website – saving you time while you maximise your revenue per room.

5. Provide more incentives to book

Guests that frequent independent hotels will fall into the category of a one-time visit, a regular guest, or an advocate who provides positive word-of-mouth to drive more direct business. But regardless of which category they fall into, guests need incentives to stay again or recommend your hotel and its benefits when booking directly.

For example, complimentary free upgrades, free food and drinks, and redeemable vouchers for local restaurants in exchange for booking direct through your website are just a few incentives that will encourage return visits. Using your social media channels, you can convert more customers with special offers and booking buttons that lead them directly to your website.

When it comes to driving greater efficiencies, hoteliers must make use of all options available, both online and off. By offering more streamlined direct booking options on your website, mobile booking apps, along with competitive pricing and incentives – your hotel will be well-positioned to capture its share of the independent hotel market.