Hotel Bonanza is a new Online Travel Agent (OTA) with a strategy of offering a lower commission for accommodation owners and a discount to guests. They have set their commission at 8% so you will find them considerably cheaper than the current dominant OTAs.
Freetobook is a family run company so our loyalty is firmly with our customers, we hear time and time again that properties need to reduce commission charges. We understand this need and will continue to support companies like Hotel Bonanza that offer a lower cost alternative.
If you already have a Hotel Bonanza account fully setup and are a freetobook customer all you need to do is request a connection in the Tab “Plus” where you can add a channel.
For those of you who are not yet freetobook customers you can find out about all the advantages of switching to freetobook …
Find out more about Hotel Bonanza and their story visit their website, join up if you like it click here…
Before next summer freetobook will have a connection for Google Hotel Ads which will give you access to Google’s direct booking channels at 10% which will also be a welcome reduction for many of you.
Freetobook, the fiercely independent family company you can rely on.
High levels of cancellation, high commissions from Online Travel Agencies (OTAs) and competition from Airbnb are big issues that a giant chain like Hilton have in common with independent owners.
In a recent interview, the CEO of Hilton talked about rising cancellation rates, high commission from the OTAs and competition from Airbnb. Every day is a school day so I thought I would consider his comments and try and interpret them for independent accommodation owners like yourself.
High levels of cancellation
Nassetta, from Hilton, says “customers…have been trained to do multiple bookings and do things that have created a scene where cancellations…have skyrocketed.” He is talking about certain OTAs encouraging customers to book and cancel. OTAs don’t really care about high cancellation rates if the customer books again through them it doesn’t matter to their profitability, they still get the booking; it’s the cancelled property who loses out.
If cancellation levels are an issue for Hilton they are an even bigger issue for independent accommodation owners where each room is so much more precious. To put some numbers on it I looked at our statistics from the last 10 months and they show that certain OTAs have an average cancellation rate of 26.5% compared to 8% on direct bookings.
Our advice here is to make sure you have a cancellation policy that does not penalise direct bookings. If you can maximise your direct bookings you will also lower your cancellation rate because direct bookings are more than three time less likely to cancel.
Hilton has responded by increasing their cancellation deadline from same day to 48 or 72 hours and made sure that their direct booking cancellation policy is always the best.
High levels of commission
Many of our customers tell us about the rising commission bills which seem to get larger every year as OTA bookings keep rising. Hilton mentions a lack of competition “More competition would have the effect of driving down distribution [commission] costs.” We have seen less competition as the OTAs take over rivals leaving only two major OTAs (Bookingcom and Expedia, who own most of the others). Nassetta, of Hilton, thinks that Airbnb could change to become a competitor for the OTAs and help drive down commissions.
Is there a place for another OTA with lower commission? Hilton certainly thinks or maybe hopes so. In common with many independent owners Hilton feels the pressure from very dominant sources of bookings and hope for a path to lower commission.
Airbnb is not competition
Hilton sees Airbnb as catering to “different travel or trip occasions” this may be true for Hilton because a big hotel chain clearly has little in common with a bedroom in a home. Airbnb feels far closer to the independent small businesses that are our customers. We also know that many of our independent customers already use Airbnb as a channel for low cost bookings so they can be an ally for everyone.
In summary, it seems that there is a surprising amount in common between Hilton and independent accommodation owners. A closer look does reveal that the same issues are faced by everyone irrespective of size along with a hope for more competition in the online travel agent space.
Why should I book directly ? Answer this question in your customer’s mind and you will increase your direct bookings. Use some subtle “book direct” images and text to show that booking directly on your website is the best thing that guests can do.
Customers need to be convinced that they should book directly, it can’t be taken for granted. Present a message that re-assures your potential guests at the exact point they are thinking about where to book. As a little gift we have created some images, please help yourself to some “book direct” images, use them freely and share them widely. Link to “Book Direct” images…
2. Don’t hide your Book Now button
A potential guest has made it on to your website, so make sure that they can easily find your book now button. Is your booking button in a prominent position on all your web pages ?
Your “Book Now” button or “Search Availability” should be easily identifiable and should be on every page of your website, not only on the Home Page. If potential guests can’t find it easily you are pushing them away and they could proceed to some other property or end up booking through an Online Travel Agent (OTA). Make it easy to book so you don’t lose the direct booking.
Typical errors include putting the booking button too low down on the page forcing customers to scroll to find it, others hide it under tabs and menus like Accommodation, Rates or even Contact. Show your booking button clearly, simply and prominently to increase direct bookings.
3. Reward direct bookings
Reward guests who have or are about to book directly with you. Display a special offer for direct bookers using an offer for everyone or if you want to be a bit more selective use a promo code.
With a special offer you can ensure guests can book your best rates directly via your own website. This could be for a selected period or for a minimum stay, or simply make it available for all stays, it’s up to you. Creating a reward for direct bookers will certainly increase your chances of getting the booking direct. When I do a booking directly I’m always looking for that little reward to clinch the deal.
Using Promo codes is more selective, the customer needs to know the promo code. There are various types of offer from the simple discount to complimentary drinks or a room upgrade. A little something that shows you are willing to reward direct bookings on your website. It’s a win for everyone, guests will feel special, rewarded and will more than likely mention it in their reviews. This helps the overall book direct message because future guests learn of the benefits of booking direct when reading the great reviews the rewards have generated.
Get creative and invent original rewards for direct booking.
To find out more about some of freetobook’s direct booking benefits take a look at Promo Codes, which can help you encourage customers to book with you again, and facebook book now button using a facebook call to action button.
Keep an eye on our blogs for tips on how to improve your direct bookings and start cutting into that commission bill.
Here at freetobook we are continually looking to make it easier for small independent accommodation owners to thrive. One message we hear again and again is that the large OTAs are taking more and more commission.
Well, here’s the good news, it’s never been easier to fight back with zero commission direct bookings from your group’s website. A group website can be created for a few nearby properties who want to work together or for bigger groups like a local association or marketing group.
Get together and co-operate to reduce commission.
1) Zero commission for all your group’s bookings.
2) Easy to refer phone bookings when you are full, revenue stays local.
3) Professional online booking and mobile site improves the image of your group.
4) Simple to administer, each property handles their own availability, rates and information.
5) It’s your group – you own the website so you can invest in it and grow it.
If you want to start fighting back against all the high commission bills this is a great place to start.
Direct bookings save commission and are much less likely to cancel. The more direct bookings you get the more money and time you are saving.
1) Make sure you offer the best deal.
Research has shown again and again that customers will choose to book direct where the price is the same or better. Proving that we are naturally attracted to the idea of booking direct, believing we will get better options, better customer service and are more likely to get an upgrade.
Offering the lowest rate is critical, even if it is the same as any other rates offered.
2) Reward direct bookings
When customers do book direct you should look at ways to reward them. Typical rewards can include a discount on their next stay via promo codes. It’s also a great idea to make a reward during their stay, this will depend on your circumstance but might include something like a room upgrade, free wi-fi or a free breakfast.
Get creative and invent original rewards for direct booking, it helps you stand out.
3) Show the benefits of booking direct clearly
Customers visiting your website want to know what to expect when they stay with you but they also need to know that you want their booking direct. They will have visited many other websites and you want them to be persuaded when they are on your website. Displaying a neat little “Best Price Guarantee” on your website will go a long way to increasing direct bookings.
Increasing direct bookings is the priority and we certainly help thousands of businesses grow theirs. The next priority is to ensure you have a good mix of other booking sources so you don’t have all your eggs in one basket. Too many bookings from one source creates a risk to your business.
If almost all your bookings come in from Bookingcom or Expedia there’s a danger of a single source being too dominant and any business knows that securing future success requires a healthy spread of bookings.
What if you were to fall out with your single biggest source of bookings, do you have any alternatives? Perhaps they decide to implement something you disagree with, do you have another source as back-up? These are valid questions that could affect the sustainability of your business.
You also need to consider that each agent has their very own customer database and by working with a variety of them you maximise your exposure to potential new customers. If for example you only work with Expedia, you’ll only get Expedia customers and that will limit your business.
A good healthy business mix includes plenty of direct bookings alongside a diversified strategy with Bookingcom and Expedia, but make sure you have a plan to increase direct bookings.
Thousands of properties have already benefited from freetobook’s promo codes so we have made them even better. You can set up as many promo codes as you like to target more customer segments and drive up your direct bookings.
Now with the new upgrades you can also;
1) Restrict the promo codes to apply on certain nights of the week.
2) Create a promo code that’s an extra service or item rather than a rate discount.
3) Set a minimum stay duration for the promo code.
Promo codes are great at encouraging guests to book direct. So why not use them to increase direct bookings and entice bookers away from other online websites, thereby powering more direct commission free bookings.
You will find promo codes and special offers in the Tab “Specials” and “Promo Codes” on the orange bar.
On the phones we hear the pain many accommodation owners feel when they get the monthly commission bill from their OTAs. Particularly annoying is finding repeat or regular customers who somehow end up booking through an OTA rather than directly. Many of you are looking for tools to help fight back against rising costs from the Online Travel Agents. One excellent way to do this is by using promotional codes.
A promo code is a private special offer that gives customers a discount when they book online directly with you. Essentially you give them a small discount making it cheaper to book directly, they save and you reduce your commission bill with more direct bookings. They simply type a promo code into your online booking page and it gives them a special direct discount.
The first step is to think about how much of an incentive you want to give to direct bookers. Perhaps your OTA commission is 15% and you want to give your customers 10% off thus saving you 5%. In the example we give the hotel offers a ten percent discount but you decide the amount yourself (you set it and you can easily change it).
Next you create a “Promo Code” in your freetobook account. Once you have your promo code setup (eg. DIRECT10) you now need to let your customers know about it, ensuring they know that booking directly on your website will save them money. The simple message is “Book direct and save” but you do have to promote it. Here are some clever ideas to help.
At Guest Checkout – Hand your guest a little business card with your promo code on it. This lets them know they are special and that they will always get a better deal booking directly with you.
At reception – Put up a little plaque or sign stating that you always guarantee the best rate when guests book direct and that some guests might get a special discount when they book again. Give them the promo code so they can use it to claim their discount when booking direct.
On your email signature – When you email guests about coming back to stay with you mention your promo code so they can get their special private deal. Again this reinforces the book direct message in a place where they might be considering making a booking with you.
We all like to feel special, using promo codes is a great way to show guests that you value their business and want them to come back and stay. Its a powerful message, book direct and save… here is a little exclusive discount because we value your custom. You want them to come back and/or tell family and friends about the special deal they can have by booking with you directly next time – promo codes do that for you.
The video below shows how the promo codes work, all you need to do is login to your freetobook account select the tab “Specials” and “Promo Codes” on the orange bar. To get a little further information see the promo codes section on our website.
How much more of the “booking cake” can the OTAs (Online Travel Agents) take and how much bigger is the online booking sphere getting? They’re both interesting questions we continue to ask ourselves with a view to helping independent properties generate more direct bookings and reduce commission bills.
There is now evidence that the growth in new online customers is starting to flatten and mature. The OTAs are giant corporations that require continual growth to fire their share price. With fewer new online customers to sell to, the OTAs are looking for ways to keep their growth on target and some have been launching products to control your direct bookings. This strategy of getting income from your direct bookings doesn’t require them to find any new customers yet helps them expand their income. When they manage your direct bookings you are effectively providing them with an opportunity to acquire new customers, your direct customers.
We have also seen some OTAs removing the customer’s direct email address when the booking has originated on their site. In the past they shared these details freely with the property owners but now you need to make the effort to obtain the customer’s contact details. This will lead to less communication between you and the customer, reducing your ability to make direct marketing offers and run loyalty promotions. The knock-on effect is to shift more bookings into commissionable income and reduce direct bookings. Make sure you get contact details of all your guests.
How do the OTAs control so much of the online business? Well, they spend billions on online marketing to get customers to book on their website. Along with the expensive adverts they quite often advertise on the search engines under cheaper terms like your property name. When they advertise under your name customers looking for your property will see them first at the top of the Google page. You will also probably see them paying for advertising on other high traffic websites e.g. your TripAdvisor page.
So what can you do about it ? Take your direct bookings very seriously, be under no illusions that you are in competition for your own direct bookings. You need to stop thinking that the property down the road is your main competition. In the online world your biggest competitor is most likely to be the OTA that provides you with the most bookings. If a potential customer has a better website experience on an OTA’s website then that’s where they’ll book.
Make sure you have invested in a great website, lots of fantastic images (critical), a great design and good original copy. There is nothing new there but independent businesses are all too often reticent to invest in their marketing, seeing it purely as a cost. Have you ever wondered why the OTAs insist on you uploading so many great images? They know customers are more likely to book with them if they have great images of your property.
A fantastic image led website will generate more direct bookings and save commission. Making sure your website is the best it can be will give you an edge when competing for direct bookings. Some of the big hotel chains even keep their best images for their own website so that they have better visual content for direct customers.
It’s a fact that big OTAs have a global sales coverage that independent accommodation owners can’t match. Learn from the way the big hotel chains do it, they use the OTAs for customer acquisition in areas they cannot reach. Use the OTAs to get the bookings in and convert the customers to future loyal direct bookers. Not all OTAs are the same, some customers have loyalty to a specific OTA that they use most of the time. If you rely on just one OTA for too large a percentage of your bookings then you should probably diversify the source of your OTA business. Work with the biggest OTAs but not just one of them. This gives you more online exposure, access to more customers, reduces your reliance on a specific channel and gives you a better mix of customers. It’s also a lot easier to bargain with the OTAs if you have more than one.
Co-operation between nearby properties will help grow direct bookings for all. When it comes to getting more direct bookings your main competitor is your OTA. If properties switched from competing with each other to cooperating there would be a mutual benefit for all. Taking it to another level some accommodation owners have enjoyed significant success by cooperating and creating bookable websites featuring their members, examples include Fort William and St Ives in the UK (see freetobook together).
The benefits of more direct bookings are clear, the simplest calculation is the commission. By cutting out the middleman you save precious commission but importantly you also own the customer relationship. You have the customer’s contact details, and from the booking onwards it’s your brand that they will communicate with, not the OTAs. The direct booking message is simple so make it clear on your website, social media, emails, brochures and do let guests know that booking direct is better for them and better for you.
The service you offer from the point of confirmation to their stay with you and beyond is all yours. With direct bookings you have no communications middleman, so take advantage of the opportunity to differentiate yourself and be “special”. Always have the best rate on your website. If you ever feel the need to make a special offer make sure it’s on your website so customers booking direct never pay more.
It can be complex in the online world, as an independent family business we try to keep things simple and in perspective for smaller businesses, there’s lots of bookings out there you just have to keep chasing them.
Are all your eggs in one Online Travel Agent’s (OTA) basket? We see a number of independent accommodation owners who rely on just one OTA. Business wisdom and common sense suggest that an over reliance on one source of sales is risky. Spreading your sales sources will give you a more reliable, robust and diversified stream of bookings.
So what are the risks of working with just one OTA? At some future point that company may decide to implement something you disagree with; it could be a policy about commission or some way that they deal with guest data, reviews or customer relations. There’s no way to say what the future holds but with only one source you will have to follow their rules without any backup relationships.
Each of the biggest three worldwide travel websites (and they keep growing), Expedia, TripAdvisor and Booking.com all have their own customer databases and their own advertising strategies. By working with more than one you both maximise your exposure and diversify sources of potential customers. Remember that some customers only ever book with Expedia and others only Booking.com so by working with both you get seen by them all.
Customers also visit many websites during their research process so featuring on the big three means you have more chance of catching their eye. Again each of these booking sites will place a different emphasis on your property so you will appear in different positions and places on different searches and pages.
Having only one OTA is a bit like a farmer getting a giant contract from a major supermarket. The initial glow wears off when you have had to turn down all other distribution opportunities and tailor your processes to that single source, and then you realise that losing the contract would likely mean instant business failure. It’s a horrible question to ask but an important one, if your biggest OTA stopped working with you would your business survive?
Fortunately in the accommodation business you can spread your risk far more easily than some farmers can. You can share your availability across multiple channels and benefit from a bigger and more diverse spread of bookings whilst increasing your negotiating position. Then, if at some future date one OTA ever demands something you don’t want to give you can always move business to another.
A good healthy business mix includes plenty of direct bookings so your OTA policy should always go hand-in-hand with a strategy to increase direct bookings. In our next blog we cover ways to increase direct bookings, so you can make the most of the existing customers that have booked via the OTAs.