“One would think that given all of the industry attention on direct booking, there would be a more uniform way of looking at what it actually is. The most obvious type of purchase that all hotels clearly count as direct is the booking that occurs on the brand.com website or app where there is no third party involved in facilitating the transaction.” (Skift, May 2017)
Yes, it would seem that after so many years of debating the booking issue—an argument that has resulted in the “direct booking wars,” a phrase even consumers now recognize—we would be crystal clear about the definition of a direct booking. Yet, it’s clear that we are still far from a robust (or profitable) understanding of direct bookings when the most “obvious” type of direct booking is on a website. Suffice it to say that there are many myths about direct bookings. Let’s break down a few.
Big Myth #1: A direct booking is a website booking.
Direct bookings existed long before OTAs came along, even before websites existed. While they include bookings on brand.com, let’s be clear that the most obvious direct booking is the one that happens when a guest picks up the phone and either dials those ten digits or uses click-to-call to reach a reservations agent. Aside from old-fashioned walk-ins, phone calls are the oldest form of direct booking, and contrary to popular belief, they still matter. Quite a lot, in fact.
While supplier websites yielded 27% of bookings in 2015, calls to hotels were at a valuable 17% (much higher for private accommodations). Combined with bookings at the property and with meta search, non-brand.com direct bookings were 31% of all bookings, outpacing website bookings (Phocuswright, U.S. Consumer Travel Report, 8th Edition, 2016). We can debate the inclusion of meta search as a direct booking; however, we’re generally inclined to include it because it isn’t a far cry from pay-per-click or click-to-call.
While we can go back and forth about what to include as direct bookings, it encompasses far more than brand.com. Imagine what these percentages look like if we cast the direct booking net a bit wider than just the website and aim to rein in those third-party numbers?
Big Myth #2: Online bookings are profit engines; everything else is a profit drain.
This might be true if the guest went straight to your website and booked without ever seeing your property via Google pay-per-click, or on a meta search site, or on an OTA. Or without a quick phone call to verify something about the property, which happens 71% of the time, according to HomeAway. These views each have a price, but few properties are tracking the full path to purchase and attributing their dollars appropriately. So most managers just assume that if the booking came through the website, there were some vague website marketing dollars attached to it, but it’s cheaper than an OTA or paying the overhead on a reservations agent. Not true. Every online booking does have costs attached and understanding those costs is essential to understanding how to spend dollars on visibility and training. NAVIS tracks the entire path to purchase so managers can trace exactly what dollars were spent and which dollars were the most profitable.
When it comes to direct booking via website and direct booking by way of the voice channel, note that
- Direct bookings via phone are higher value, generating $3 for every $1 generated online.
- Reservations agents convert at an impressive 42.5% when they are properly trained in the art of sales.
- Agents can add another 10% on top of that if they are trained to handle outbound calls in their downtime.
If you’re not performing at these levels, you’re losing significant revenue every day.
Big Myth #3: If you build a website, direct bookings will come.
Here is the notion about direct bookings that can quite possibly be the biggest setback. The existence of a website does not create demand nor convert it. Desktop and mobile websites can be frequent parts of today’s complicated travel path to purchase; however, as Google notes, in order to “earn (and re-earn) each person’s consideration… you’ll need to do more than just show up” (Think with Google, July 2016).
Capturing prospective guests and converting them requires giving them all the information and tools they need across all available channels across all devices, including voice. Expedia’s The American Traveler’s Path to Purchase notes that travelers use online resources 20 times per week in the 45 days prior to booking, and they use, on average, three different resource types. Notably, these resources are both online and offline. Think of the path to purchase as a zigzag back and forth from online to offline and back. Trying to keep travelers on the channels you own, rather than letting them wander off to OTAs or meta search sites, is essential. If you are strategic, for instance prominently including a clickable phone number on your mobile website and chat options, you can have them land in your most profitable voice channel.
The benefit to looking clearly at direct bookings is that it opens up more opportunity. When hotels and vacation rentals embrace the offline channel and get tuned into the evolving habits of travelers not only can you increase demand, but more importantly, you can also increase conversions with your existing demand.