[Hotelier Insight] – Most Popular Online Booking Channel

We recently interviewed one of our hotel partners, who is effectively utilizing all of our connectivity provider partners to boost bookings for their hotel. We are inquiring about the best practices, the challenges faced, and how Bookandlink can provide a solution.

Real-time customer engagement is a crucial element for a successful distribution strategy. Online travel agencies (B2C), bed banks and wholesalers (B2B), and the hotel’s direct website are the primary sources for hotel bookings. Discovering each booking source’s advantages and challenges can help make informed decisions about the channel mix. Developing a robust blend that caters to your unique requirements is essential to boost direct bookings for your hotel business.

Online Travel Agents (B2C)

Online travel agents like Booking.com, Expedia, Airbnb, and Trip.com account for approximately 40% of hotel bookings. OTA platforms usually charge a commission fee for bookings. Guests can quickly make reservations and payments through the OTA website. OTAs receive a commission for each booking, and the property gets the remaining amount. Maximizing profits requires diversifying booking channels. Relying solely on OTAs for reservations can have a negative impact due to their high commission fees, which can reach up to 20%–30% per booking. Online travel agencies (OTAs) may request hotels to participate in promotional campaigns to increase visibility and lower rates.

Many property owners use a channel manager, such as ChannelKu, to streamline the distribution of their inventory and consolidate their rates, rooms, and channels into a centralized location for greater efficiency.

Benefits:
  • Your hotel brand can attract travelers worldwide, regardless of their target markets or demographics.
  • Region-specific online travel agencies such as Trip.com and Traveloka provide access to exclusive niche markets for travelers.
  • The “billboard effect” is a powerful tool that can enhance the visibility of your property to potential travelers who may not have been previously aware of your establishment. By leveraging online travel agencies (OTAs) for research, it increases the likelihood of consumers booking directly with your property.
  • You can effectively manage the distribution mix by utilizing marketing incentives, special offers, and inventory allotments. Maximize your OTA sales share with these powerful tools.
Challenges:
  • The hotel occasionally promoted a “unique promotion,” while well-known OTAs imposed steep commission fees.
  • The guest journey can be minimally influenced by the provider when guests reserve your hotel through an OTA. Additionally, limited insights may be provided into these guests since the initial interaction is with the OTA and the guest data.
  • Monitoring and upholding rate parity between online travel agencies (OTAs) and direct booking channels is essential.
Solutions:
  • ChannelKu is a tool that enables you to manage rates and inventory across all OTA platforms.
  • Using rate multiplier features, boost your rates for certain OTAs that violate parity.

 

Bedbank

What is a Bedbank, and how does it work? Max Starkov, an adjunct professor at NYU Tisch Center for Hospitality, said bed banks have significantly contributed to hotel distribution for over two decades. Hotel accommodation wholesalers have existed for several decades, predating the advent of online technology. Therefore, they are not a novel business model. Bed banks, specialized B2B platforms, contract supply from hotels, and accommodation providers. Long-haul international vacation destinations usually have this supply available. This travel solution is accessible to sellers who consolidate travel demand from multiple sources, including traditional travel agents, small and medium-sized tour operators, and select low-cost airlines. A bed bank provides a beach resort in Thailand to retail travel agencies based in London.

Benefits:
  • Bedbanks provide extensive partnership opportunities, reducing the inconvenience for hotels to engage in individual contracts with travel agents or corporate firms.
  • Bed banks are the most effective way to achieve targeted-based occupancy.
Challenges:
  • For optimal results, it is recommended to operate bed banks at rates 5% to 10% lower than the net rates obtained from OTAs.
  • Bedbanks may sell rooms at higher prices than OTAs. The anticipated Average Room Rates are not being achieved as intended.
Solutions:

Our hotel partners utilize ChannelKu’s Room Allocation feature to guarantee that Bedbanks is assigned at least 25% of the rooms available.

 

Direct Booking

Direct booking refers to guests making reservations directly with the hotel rather than relying on a third-party online travel agency (OTA) or other intermediaries. When a hotel employs a third-party platform vendor, they typically opt for a fixed-fee or commission-based model.

Benefits:
  • Enhancing guest experiences can be achieved through personalized and exclusive guest relationships.
  • Enhance your experience with our exceptional pre-arrival upsell opportunities.
  • Maximizing revenue and profits can be achieved by eliminating commissions from third-party OTAs or other marketplaces.
  • Leveraging guest data can enhance pre-arrival communication and post-stay remarketing efforts.
Challenges:
  • To maximize direct bookings for your hotel, it’s essential to have a solid digital marketing strategy or seek help from an experienced hotel marketing professional. This approach can be more cost-effective than other channels.
  • The acquisition cost may be higher than a fixed fee when utilizing a commission model.
Solutions:

Our hotel partner employs dynamic pricing and room allocation solutions. The last room available can be managed efficiently and increase the revenue.