Simple Steps to cut that OTA commission
In last weeks blog, we talked about why you should have a Book Direct strategy at all and at the risk of repeating myself, I felt that it was useful at the start of a New Year to review some simple ‘to-do’s’ that will make an immediate and substantial impact on your profitability. But before you look at this list and then file it away in the ‘must look at this some time’ pile (and I have been guilty of that myself in the past), I would urge you to look at how much commission you paid the OTA’s last year. I guarantee you will be shocked! So if there was a way of reducing those commission cheques and also encouraging guest loyalty, perhaps you should keep this list at the top of the pile…
- Rates – Seems obvious I know, but do you actually have the best rates on your brand site? If you do, then make sure your customers know that. Make sure that this is shown ‘loud and proud’ on your website and through the booking process (your booking engine provider will help with that). You need to shout that you have the very best rates Guaranteed and we need to start training customers that ‘direct is best’. One tip is to keep an eye on the Meta-Sites (Trivago and TripAdvisor as examples). They will show your rates via other third parties and some OTA’s who have nett FIT rates, occasionally pass these on to other third parties who will show them nett! My advice is to spot-check regularly and to come down hard on the perpetrators. This is something as an industry we should be shouting about and frankly not tolerating.
- Availability – Do you have the best availability online? Again kinda obvious but stand back and analyse… Never give too much inventory to the OTA’s and make sure you look at dates far into the future. You may be re-acting to the here and now but lets face it, clever rate and availability management happens when you are re-acting to dates in the future. The golden rule of course is that you should never have rooms available on third parties when you are closed on your brand site. Again, watch-out for OTA’s that demand allocations. I often see hotels that are genuinely full on their brand site but that an OTA is still selling rooms from an allocation. Also be aware of who in your team is signing off on OTA contracts as you need to ensure that you aren’t committing to a high base inventory to begin with.
- Reasons – Give your customers reasons to Book Direct and again make sure that your website and booking engine have cohesive messaging. These messages could be Book Direct for: priority upgrades / arrival drink or late check-out, but also include what you already provide as not all guests will know. As an example: free wifi or complimentary parking. Or better still, how about offering a competition – Book Direct to Win! This could be an upgrade to your premier suite / a chance of winning an overnight stay / bottle of Champagne etc. You can chose one person per week to win and then advertise and promote on social media.
- Don’t be fooled – if you get low inventory notifications from OTA’s do you re-act? Should you? Perhaps you should consider turning this on its head and using these notifications to notify you of days when demand is high… Perhaps these are days when you could capture business direct.
- Restrict – don’t be afraid to restrict the OTAs. If you have days of high demand, why not consider implementing a 2 night minimum stay? Another trick is to close out popular room types when you forecast you are going to be busy. That way you have a much greater opportunity for guests who know your hotel to book direct.
- Trigger Points – if you have a revenue system (blatant plug for Right Revenue!) you can implement Trigger Points and by that I mean have defined occupancy points when you are reminded or triggered to close out your OTA’s. You can of course do this manually and what I would recommend is that you don’t ‘blanket’ implement trigger points for every day (e.g. once I get to 60 rooms sold, close out OTA’s). This is because on Fridays you might trigger a close out at 60 rooms but Saturday at 50 rooms (as you get high demand direct) or 80 rooms on a Sunday as you are happy for business, no matter where it comes from on a Sunday. You may also chose to change these trigger points seasonally or by month of year – up to you but it is simple to implement and immediately effective.
More next week but for all things revenue, please just email email@example.com as we are always happy to help