BEST PRACTICE: Reservations and the digital world
In Hotelier’s new series exploring the changing landscape of hotel reservations, we look at how to increase direct bookings by simplifying your website and implementing an easy-to-use booking engine
Last month, Hotelier brought you a comprehensive guide to how to ensure your website reaches the peak of search engine results pages.
However, this will do nothing to increase bookings if your website is a challenge to navigate and leaves prospective guests gasping for something simpler – a one-stop shop for everything they may need to know, and a minimal-click booking solution.
Typically, hotel websites are buried among the aggregation websites and OTAs, which receive far more traffic, but customers do shop around on different sites. Google’s head of travel for the Gulf, Marie de Ducla, explains: “People visit around 22 websites over nine sessions before they book a hotel, so they have time to look at a lot of hotels, brands and websites. Then they decide where they want to book — through the hotel directly or an agent.”
Price is obviously a strong influencer in this decision, but so is the website’s overall feel and the user experience. James Lowery, head of SEO at digital marketing agency Latitude, says: “You go onto an aggregation website and you’re not sold a particular hotel, you’re just sold a hotel — not an experience, just a few nights somewhere.”
He adds that in the region, the Arab Spring “opened people’s eyes to the power of the web as being a business channel in which people can communicate directly with their customers”.
“They know they can have this relationship — before sale, during sale and after sale. It’s where the transactions happen, so we’re seeing people more willing to invest,” Lowery adds.
Alex Barder, regional director of business development for Sabre Hospitality Solutions, explains: “Compared to Europe and the US, hotels in the Middle East certainly have a lower share of direct online bookings.
Outside global hotel chains the majority of hotels generate between three to 10% of their bookings through their website, with many reliant on OTAs such as Booking.com and Expedia. Hotels have grown comfortable with this, however a more balanced mix between direct bookings and OTAs could yield savings in the future.”
“It may sound like a lot but hotels can realistically expect to triple their online direct business by improving their website,” adds Barder. “OTAs provide a great deal of value but balancing the mix will ensure they are not entirely reliant on them.”
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Ease of use
All the issues that hotels need to address on their websites “relate back to ease,” explains Rezidor’s area director of revenue optimisation, Middle East & Sub Saharan Africa, Shabana Beg. “A customer uses online booking facilities because it should be quick and hassle free.”
When designing the group’s website, Beg explains that comprehensive interviews were held with all of the main corporate teams within Rezidor and a content strategy was developed for each one, with aims, objectives and messaging developed. The site features one-page tabs which are designed to “simplify navigation to related content”.
Hotel websites also “need to have sufficient information that would convince the client to make a booking right away,” says Tarek El Sherif, managing director, V Five Continents Hospitality Group. “They need to be simple in design and user friendly — easy to navigate,
easy to find information and easy to make a booking.”
El Sherif explains: “Nowadays, clients do not read much during browsing, except if an eye catching word or image motivates them to go deeper, and this is a big challenge.” Beg adds that “in order to keep clients on the website longer than your competitors you need to have the right buzz words right on the first page so it will entice the client to click and navigate further on the website.”
This, in turn, will sell the brand image to the potential guests and “build brand loyalty,” adds Beg — all of the information was required to “complement the strong visual identity of Rezidor”.
Local Knowledge
One area in which hotel websites can trump OTAs is with their local knowledge and expertise. Marcos Cadena, Anantara’s director of electronic distribution, says: “One of our brand values is to give a local experience to our customers, something that you cannot get from an OTA. This is reflected in Anantara’s website content, which offers a unique user experience and information.”
The brand’s website includes information on its destinations, such as the climate, currency and local business hours, as well as transportation and shopping tips. “In the Middle East, over 30% of all our revenue is driven through online channels and this is growing at a fast pace,” Cadena adds.
“The increases in revenues are really significant as brand websites have the best ADR of all revenue sources. By using a direct channel, a brand reduces its cost of sale compared to the OTA, which would have a cost between 18 to 25%, compared to the brand site cost of between four and six percent.
Therefore, hotels that focus on using their own sites and on getting out in the market can see an increase of up to 15% of their revenue.”
Booking Engine
Another major aspect of whether a customer will book through a hotel’s website is the booking engine — like the site, it needs to be clear, easy-to-use and allow the guest to get where they need to be in a minimal number of clicks.
Micros-Fidelio GmbH senior vice president e-commerce and strategic solutions, EMEA, Peter Agel explains that “the truly integrated booking engine should match the look and feel of the website and collect minimum guest information that is required to make the booking”.
Choosing your booking engine can also have a major impact on the cost per online booking, with a range of solutions available, from customised options, such as Micros Fidelio “best-of breed” engines from EUR 40,000 (US $51,512) plus monthly recurring fees, to a standard off-the-shelf solution for individual hotels based on fixed fees per room.
Rezidor’s Beg agrees: “It is just very surprising, if not intriguing, why hotels still seem to lag behind when it comes to their own booking facilities on their websites, compared to the good jobs done by the third-party providers such as Booking.com”.
Rezidor’s website features a single booking engine, where all of the group’s properties are available to book once a destination and date has been entered. Once implemented, the benefits of a well-designed booking engine are two-fold - both customers and the hotel will benefit.
When implementing a booking engine, “it’s of great importance that the user is the main priority,” explains Agel. “A multi-lingual booking engine and multi-lingual content for rate and room type descriptions are key,” he adds.
Beg agrees: “One definite issue is the lack of websites and content available in Arabic”.
Agel continues: “Users shop around before they book, so the overall concept must reflect the booking engine, the rate strategy and the content, which needs to be more appealing than OTAs. In addition, hotels can win with offering more content and better pricing, provided they dare to risk rate-parity conflicts with the OTAs — which they should do.”
“[Users] tend to go from site to site and if the brand website rate is not consistent with those on the OTA this definitely discourages the customer from booking through the brand site,” agrees Cadena.
However, instead of undercutting OTAs to attract guests to book directly, Cadena is of the opinion that maintaining price parity between all channels is best, as it doesn’t “confuse the customer” and makes the site seem “more credible”.
In terms of hotel benefits, the back-end of a booking engine is of the utmost importance, and “integration with hotel systems — either CRS or PMS — is a must,” says Agel. This will ensure that all booking details online are in real-time, and cuts out unnecessary labour costs.
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Upselling
A major advantage of converting bookings through your own website is the ability to promote additional property facilities — perhaps through exclusive bundle deals. “An area that is often forgotten is the ability to convert sales of spa treatments, activities and food and beverage outlets through the promotion of these areas on hotel websites. In the UAE our properties are very activity focused due to their location on an island, desert and city mangrove area,” explains Anantara’s Cadena.
However, it’s not only hotels with relatively remote locations that can drive promotions and extra services on their direct booking channels. “The client will be introduced to other facilities in the hotel rather than just a room booking, hence, there are opportunities of selling other facilities to the same client which will drive more revenue to the hotel,” adds V Five Continents’ El Sherif.
Sabre’s Barder explains that its Guest Connect offers “dynamic packaging, allowing hotels to bundle different products and services to drive incremental revenue”. El Sherif also adds that this upselling is not limited to the single property, if it’s part of a chain — services at other nearby hotels can be recommended while booking, or if the selected property is at full occupancy, it can direct potential guests to another sister property.
ROI
For all of their benefits, booking engines and well-designed websites aren’t cheap, but they are part of a business decision on how to progress with your online selling strategy. Beg explains: “Booking engines can be expensive but it depends on the CRS used; however, a return on investment can easily be calculated.”
Agel advises that ROI “should be measurable” within three to four months, but “we have seen cases where the initial investment has been covered only after a couple of days”.
Barder adds: “A large percentage of hotel website traffic comes from OTAs first. So hotels looking to increase online direct sales really need to have an easy-to-find, appealing website with a strong booking engine if they are to effectively convert traffic from OTAs.” And one needs to ask — which hotels don’t want to convert traffic from OTAs?
If, however, you don’t have the funds to dive straight in for a complete online revamp, our experts explain that the booking engine, above a sleek and sophisticated website, is where to invest.
“In many cases an attractive site is not what drives the booking conversions but rather action driven websites,” Cadena explains.
“Without question it is a good investment to have an effective booking engine as the biggest part of the booking conversion happens in the last steps of the booking process. If the booking process is too complicated, the user will leave the process and book on an OTA.”
A hotel’s website is more than an online placeholder informing potential guests about the brand’s mission statement and the names of restaurants they can expect to visit if they book — it should be an integral part of the hotel’s sales and marketing strategy.
As El Sherif says: “I consider the hotel’s website as my extra sales person that is reaching markets that I cannot reach and visiting my clients at their home no matter where on earth they are, hence, this sales person has to be properly equipped with tools to sell and certainly has to have targets to achieve so I can evaluate his performance.”
The next stage
In this series, we have now covered search engine optimisation strategies, and how to then keep potential guests on your site, in order for them to book directly and increase your revenue. Next month, we look at the hot topic of emerging mobile technologies, which are booming with no signs of slowing down. Don’t miss this essential guide to the products available and how to tailor them to your needs.
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CASE STUDY I
THE HOTEL: Global Hotel Alliance
THE COMPANY: Micros Fidelio
Objectives
• Boost efficiencies in the reservations system and IT labour management.
• Ease manual inventory processes and the internal handling of reservations.
• Create time and cost savings to drive incremental revenue for the alliance’s 15 brands, while offering enhanced recognition and service to hotel customers.
Strategy
• Implement a highly flexible, fully integrated distribution solution based on OPERA technology: the OPERA Reservation System, the SaaS model myfidelio.net and OPERA Web Services – all connected via two-way interfaces to the Micros-Fidelio PMS.
• Allow travel agents to directly search and view information on GHA’s central database and make bookings, ensuring single-image guest records and hotel inventory.
• Allow GHA to centralise its approach to the alternative distribution systems through a central distribution solution.
Results
• A 25% increase in revenue and an additional 40,000 room-nights per annum.
• Distribution costs were reduced by up to $25 per booking.
• Ability to drive cross-brand revenues through GHA’s marketing activities using Opera’s central reservation platform.
• Enabled other hotels to be booked through branded websites, ensuring the revenue is kept within the GHA.
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CASE STUDY 2
THE HOTEL: The Trump Hotel Collection
THE COMPANY: Sabre
Objectives
• Improve guests’ overall online experience and interaction with the brand.
• Create a booking tool that offered the ability to improve merchandising, increase revenues via up-selling opportunities and help capture their increasing global market.
Strategy
• Implement the Guest Connect Flex booking engine to offer them advanced flexibility and controls.
• Support 31 languages, including right-to-left support for Arabic.
• Advance merchandising functionality like promotional pricing, dynamic packaging and itinerary bookings with a new streamlined layout.
• Added a shopping comparison function, enhanced image galleries with larger photos and “share with” tags to enhance the user experience.
• Total pricing, revealing final price including taxes and extra charges to mirror other consumer travel and retail sites.
• Added easy-to-read availability, calendars that can be customised with rates and stay restrictions available.
• Allow guests to opt for a ‘reservation review’ or to go straight to confirmation on a single-page based on their individual shopping preferences.
• Added ‘room grouping’ functionality, accommodating properties with a large number of room/rate combinations.
• Used expandable/collapsible product and package results.
Results
• Reservation conversion rates have increased 50%, compared to the same period last year.
• Net revenue has increased by 29%.
• Conversion rates have continued to surge, demonstrating the value of Guest Connect Flex.