Views on direct booking, OTAs vary from brand to brand
Views on direct booking, OTAs vary from brand to brand
28 JANUARY 2019 7:10 AM

Hotel brand executives shared their thoughts on the next wave of direct booking, OTA relationships, evolving technology in the distribution space, loyalty and more.

REPORT FROM THE U.S.—The collective push by the hotel industry in recent years to get guests to book direct could intensify as new entrants add pressure and competition to the distribution landscape. At the same
time, some hoteliers have softened their stance on the third-party platforms they know, signaling more willingness to work with online travel agencies.

For Choice Hotels International, direct booking 2.0 will focus on obtaining consumer information and personalizing messaging so the company can present guests with properties, locations and other items they’re looking for when booking hotels, said Robert McDowell, chief commercial officer.

He stressed the importance of meeting consumers on the channels they want to use, and for many people on the go, that’s the Choice Privileges mobile app.

“We continue to focus on improving our mobile experience, speed, how fast we can (run to) the right properties so that consumers aren’t waiting,” he said, adding that Choice has seen more and more people downloading the app and using it to book direct.

Choice announced its partnership with Book on Google in recent months, which allows guests to book through Google while the reservation is managed by the Choice property chosen by the user. McDowell said this partnership is viewed “as an extension of” and plays into the company’s direct-booking strategies.

“We look at it as really a win-win for our guests as well as our franchisees, making it easier than ever for guests to book a hotel at one of our hotels online,” he said. “It minimizes the drop-off in terms of search habits, which (results in) better conversions for our brands, and gives us a book-direct feel, as well as giving us direct access to the customer data, which allows us to manage (reservations) and find the right level of service.”

An important aspect of the push to book direct for Best Western Hotels & Resorts is driving traffic to direct-booking channels and “protecting that traffic because it can easily be hijacked” by the OTAs, said President and CEO David Kong.

“So when you think about the next evolution (of direct-booking pushes), it’s about how you deal with these opportunities. The search engines and metasearch engines buy OTAs to advertise and hijack the traffic,” he said. “That’s what we’ve been working on, and that’s how this whole thing is evolving.”

Leslee Torres, SVP of digital, loyalty and partnerships at RLH Corporation, said RLHC “has really taken a different approach on the book-direct messaging from day one.”

“We understand there is value and efficiency gained for the consumer to book or to at least shop via the OTAs or now Google. (We’ve taken) a more collaborative approach and said, ‘Look, we understand there is a benefit to you as the consumer … we understand there is a value to the consumer; we want to be the easiest hospitality chain for you to stay at.’ And so we’ve actually gone the opposite direction of book direct and we’ve put our loyalty program rates … on Expedia and we would like to expand that on other channels because we believe that is what is most efficient for the guest in the long run.”

Where brands stand on loyalty

RLHC also has a bit of a different stance on its loyalty program, Torres said. The company gives guests Hello Bucks, which is a simple system of virtual currency for loyalty members to use and redeem right away.

“The traditional loyalty program is extremely expensive,” she said. “You’re getting 10% of your daily rate. In addition, every time a guest earns with you, it’s typically 5% that you have to pay into the fund; when a guest redeems their points with you, you get paid typically pennies on the dollar for that stay.”

She said Hello Bucks are a low cost for hotel owners and no cost for guests earning at RLHC properties.

“When guests redeem with us, hotels keep 90% of whatever was booked,” Torres said. “We believe that the value equation for hotel owners is something they should really think about.”

Choice has nearly doubled the size of its Choice Privileges membership base, McDowell said, and franchisees are very involved in options rolled out through the loyalty platform.

“We work very closely with our Choice Hotels Owners Council, as well as our Econo Lodge and Rodeway franchisee advisory boards. We spend a great deal of time with them just around the program, the performance of the program, but also when we talk about rolling out new features for our guests, they are highly engaged in what that looks like,” he said.

McDowell added that franchisees are also very involved in enrolling people in the program at the front desk because “they see the benefits of the members coming back and booking directly with us and staying at the hotel on a repeated basis. Our franchisees have been strong supporters of Choice Privileges (and) continue to help us at the property, but also are very influential in how we grow and evolve the program over the years,” he said.

Best Western looks at evolving three key things for its loyalty members: earning opportunities, promotions and “generous redemption” opportunities, Kong said.

These loyalty benefits are needed to “give people who have not tried you before a reason to stay with you, but it’s also for people who have stayed with you and you can get a bigger share of their wallet,” he said.

Thoughts on OTAs and other channels
Costs and commissions for OTAs go up every year as they become more popular among consumers, which was made possible because the hotel industry fed them, Kong said. For that reason, the industry as a whole should be wary of listing on Airbnb and other distribution sites, even if the costs are low, he said.

“If we are going to learn our lesson, we have to think about Airbnb and the like. Although they are offering hotels very attractive commission terms, are we going to feed the beast again and create a monster that we’re going to have to deal with in the future?” Kong said. “I think that’s a question many of us have to struggle with.”

Hilton encourages guests to book direct, but “the OTAs and other intermediaries are an important part of the hotel booking landscape, and Hilton is committed to selling where our customers want to shop,” Chris Silcock, EVP and chief commercial officer at Hilton, said via email.

Torres said RLHC recognizes the OTAs charge a lot for booking commissions right now, but her company believes “there are emerging technologies out there that are going to create new opportunities for hotel owners to diversify the mix (of channels) they get bookings from.”

“When you create competition, you can naturally expect fees to go down over time, and we do believe that there are a number of really exciting channels emerging for hotel owners,” she said.

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