Does It Really Pay to Book Direct?

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By Daniel E. Craig, Reknown

These days, hoteliers talk a good game when trying to convince travelers to book directly. “Stop Clicking Around,” Hilton urges in a current campaign. “It Pays to Book Direct,” Marriott promises. “The Best Place to Book is Right Here,” proclaims Hyatt.

Most major hotel brands and many independent hotels now offer a best rate guarantee and incentives for direct bookings. It’s part of an industry-wide movement to change traveler behavior and reduce the amount of commissions hotels pay to online travel agencies. The underlying message of these campaigns is, “Trust us. Skip OTAs and book direct for the best deal.”

But can travelers really trust hotels to uphold this promise? As a traveler, time and again I’m dismayed to find better offers on OTAs than on hotel websites.

Most recently, while planning a five-night stay in New York, I found a great deal on Booking.com for a five-star hotel, part of a well-known brand. Like a good ex-hotelier, I went to the hotel’s website to book direct, but the rates were much higher there, so I called the hotel. The reservations agent was reluctant to match the offer, questioned its validity, and asked me to email a screen shot. Eventually, she agreed to match the rate. 

Curious, I asked if she could offer me an incentive to book through her rather than through the OTA. She emailed back with an offer of a $25 minibar credit. The hotel would save hundreds of dollars in commission on my five-night stay, yet was willing to spend just $5 per night (actually much less, if you look at cost) to secure the direct booking.

Meanwhile, at another hotel I visited recently, OTA rates are matched automatically—no haggling necessary—and direct bookers receive a $25 daily food & beverage credit, free Wi-Fi and a late checkout.

A quick search on a metasearch site like Kayak or Trivago will show you the rates across booking channels for any given hotel (though not always direct rates). On the surface most hotels appear to have rate parity locked down, with little or no variations across channels. But a little digging often turns up hidden deals on OTAs.

Surprisingly, it’s both independent hotels and branded properties, many of them run by seasoned hoteliers and sophisticated marketers, the very people making this “book direct” plea to travelers, where I encounter frequent instances of rate disparity. Considering the fees brands levy on member properties, shouldn’t they be doing everything possible to avoid OTA commissions? What’s left over for the owners? And where are things breaking down—at property level or at corporate office?

So often when I ask a hotel if it can match an offer I found on an OTA, the agent hems and haws, questions the rate I found, puts me on hold, asks for proof, and generally makes me feel like I’m engaging in unseemly behavior. Actually, I want to say, I’m trying to book your hotel and save you money. Although of course my motives are self-serving, too. I know that travelers who book directly are more likely than OTA bookers to get a better room and preferential treatment—or at least they won’t be hit with penalties and disincentives.

In France, where rate parity clauses in OTA agreements have been declared unlawful, I routinely find better deals on OTAs than on direct channels. If anything, shouldn’t it be the reverse now? When I asked one hotel, part of a huge conglomerate, to match the OTA rate, the reservations agent told me I had to book on Expedia. So I did, however reluctantly. At the hotel, I was treated like a second-class citizen—no loyalty points, no turn-down service, no newspaper and no late checkout—because, staff were quick to point out, I had booked through an OTA. Do I blame Expedia for this? No, I blame the hotel, and I won’t go back.

If hotels truly want to change traveler behavior, the choice comes down to a carrot or a stick: offer travelers incentives to book directly (carrot), or penalize them for booking through an OTA by withholding perks and services (stick). Which is more effective? I’d say carrots are more effective at building relationships and loyalty and enticing guests to book directly on future stays. But that carrot must come with an authentic best-rate guarantee.

Is the message about the value of direct bookings making its way from hotel executives to frontline employees and call center staff, the people fielding reservations calls? Are staff being offered carrots too, to encourage them to secure direct bookings wherever possible and appropriate? When reservations agents decline to match an offer found on an OTA, is it because they don’t know any better, or don’t care – or are they complying with terms in OTA agreements?

During a recent ReviewPro webinar, I asked Max Starkov, president & CEO of HeBS Digital, if he thinks it’s ever okay for hotels to offer lower rates on OTAs than on direct channels. “We believe it’s counterproductive because it trains the traveling public that they can always find a lower rate on OTAs,” he said. “Travelers believe that OTAs are the place to go for the best rates, and we have to prove them wrong. Hotels should teach travelers that they will receive comparable rates and perks if they book direct.”

Before deciding to offer a promotion exclusively on an OTA, Starkov says, hoteliers should “take a deep breath, and structure and launch a campaign on direct channels. If needed, offer the same promotion via OTAs.”

I know what it’s like to forecast a budget shortfall and be tempted to turn on the OTA tap to meet the numbers. It’s so easy, so effective. But while the hotel may experience a revenue bump in the short term, and perhaps satisfy the budgetary demands of corporate office, ownership and quarterly bonuses, in the long run it’s not doing anyone a favor, except OTAs. It’s teaching travelers to not trust hotels, and putting even more profits into the pockets of OTAs.

These days, as more hoteliers spread the gospel of booking direct, they need to practice what they preach. As long as hotels continue to allow OTAs to sell their rooms at lower rates, it won’t matter how much money they spend to try to convince travelers to book direct.

Travelers won’t change their habits until hoteliers do.

 

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One Response to “Does It Really Pay to Book Direct?”

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  1. Daniel, great article. I couldn’t agree more with you.
    In my last holidays waiting for a taxi at the hotel lobby, I had to hear the receptionist talking with a prospect on the phone, saying that got the best rate he said m should book via Booking.com as they have promotions online!
    I stopped my self from killing that person and remembering I was on holidays and not working LOL

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