For many independent hoteliers, October kicks off the annual strategic planning period for the upcoming year. Everything from guest room conditions to performance metrics are analyzed to determine how they can be improved so operations continue driving forward. For example, operators generally scrutinize occupancy metrics to better understand booking trends, revenue and profit results and the various sources of their reservations. For independents, understanding how travelers are finding their property is a critical piece of their hotel operations puzzle that must be solved to ensure their business is secure in 2017 and beyond.
The digital divide
Nearly half of all hotel bookings are completed online, so as booking technology improves, this number will continue to grow. But as you dive into the world of online booking, revealed is a struggle between hotels and their industry partners, online travel agencies (OTAs). OTAs spend billions on travel marketing efforts, so in exchange, they demand hefty commissions from partnering hotels. Tiring of these costly fees, hotels, primarily large chains, are pushing back by enticing travelers to book directly through their branded websites and apps. As this battle heats up, some operators may be questioning how to navigate this tricky situation, but we believe independents should take a hard look at their numbers before picking sides.
Find the facts
When it comes to making an “either/or” decision about direct booking vs OTAs, we think independents should ignore the noise and focus on the specific needs of their hotel. Using reports from their hotel property management system, hoteliers should analyze the percentage of bookings and revenue captured by each of their reservations channels, including their website, mobile, OTAs, front desk calls, group bookings, walk-ins, etc. Secondly, compare the dollars spent on each channel, such as OTA commissions and ad placement fees, to acquire bookings to see which are delivering value and which are lagging. With this data, operators can make fact-based decisions about their booking channel spending, rather than guessing.
Deciding how to allot booking channel funds is challenging, but relying on data provides operators a starting point from where they can accurately measure the performance of each channel and, ultimately, position their hotel to maximize their booking opportunities.