The modern traveller has a range of Booking methods at their fingertips 24/7. Meticulous online research can be conducted on dates, locations, prices and amenities to get the best hotel experiences.
The formidable global online travel market was valued at $2.3tn in 2023 and is expected to grow at a compound annual growth rate of 10.3% by 2030, populated by online travel agencies (OTAs), direct suppliers and ancillary suppliers.
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Given this growth, long gone are the days when hoteliers could happily rely on only one channel for bookings. Just as travellers can research every detail of their journeys, hoteliers must also research strategies for optimising booking channels to reap the advantages.
Hotel distribution and connectivity platform SiteMinder has more than 40,000 hotel customers looking for such support with booking solutions.
The company’s vice president of ecosystem and strategic partnerships James Bishop tells Hotel Management Network about the importance of effective business intelligence within the increasingly competitive hotel booking market.
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Hotel booking intelligence
Empowered by technology, Bishop emphasises that hoteliers must “establish the right mix of booking sources for their property and circumstances that will allow them to maximise revenues and create the best possible experiences for their guests.”
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By GlobalDataAccording to Bishop, hoteliers would do well to opt for software that offers real-time, actionable insights on how their connected booking channels are performing, and to consider to what channels they should consider connecting. Such software will help hotels with broader forecasting and adjustments to market conditions.
Digital tools can offer granular data and customised reports, allowing hotels to identify key trends at a glance and compare the exact volume of room nights and revenue being generated by any given channel or source market.
Bishop adds: “If a hotelier wants to grow in a particular segment – for example, corporate or international travellers – but their existing connections are underperforming, then they should consider adding new connections which increase their reach to their target customers, especially if those customers sit within niche segments.”
Ever-important questions surrounding revenue and rate parity can cloud hoteliers’ strategies for booking channel distribution.
For hoteliers to avoid missing out on revenue due to under or over-pricing, Bishop advocates for software with dynamic revenue management capabilities that can take care of rate parity in real time. “This avoids relying on manual inputs or potentially unstable integrations which could lead to inconsistencies or even contractual issues.”
He adds the caveat of the complexity of the distribution landscape, as rates that are sold to a non-contracted/controlled accommodation seller usually cause disparity, over which hotels have less control.
“Thankfully, the industry is becoming more aware of this and larger players are publicly accepting that they have to do better at controlling rate leakage.”
Booking channels vs hotel websites
The rise of travel booking leaders such as Airbnb, Booking.com, and Expedia has brought disruptive competition to hotel-owned websites.
However, data from SiteMinder shows that hotel websites collectively ranked higher in more than a third of the company’s top lists for booking sources, despite international bookings growing 33% as a proportion of all bookings.
In the UK especially, direct bookings are holding their own compared to other channels. Hotel websites remained the third highest source of revenue for UK accommodation businesses in 2023.
This comes despite an increase in the proportion of international bookings by 17%, which SiteMinder would expect to favour indirect channels.
Price increases have impacted the vast majority of travellers, and hoteliers have a growing opportunity to convert deal-hungry guests via their website.
The UK-based consumer choice not-for-profit organisation Which? recently urged travellers to book directly with hotels to get value for money. It found that booking directly with a hotel rather than using a booking site offered the cheapest price half of the time.
In response, Bishop highlights the trends of travellers seeing packages and offers as a key element of a hotel’s website while also displaying a willingness to purchase extras to optimise their stay.
“Together, these two trends give hotel businesses more space to showcase unique products that maximise value for money, whilst maintaining their rate parity clauses with booking channels.”
There is no point in having great website deals if they aren’t being viewed and aren’t easy to claim, however. Bishop advises that hoteliers need to drive traffic through optimal visibility via OTAs, metasearch engines and solid search engine optimisation.
“Direct doesn’t mean ‘free’,” he points out. “There is a real cost in maintaining a high-converting digital channel and driving qualified traffic to maximise the potential of this.”
Data isn’t the whole story
Stating that there isn’t a one-size-fits-all all solution for the hotel industry when it comes to booking channels, Bishop confirms to Hotel Management Network that “a fair number of hoteliers have a limited number of distribution channels.”
The ideal amount of distribution channels, according to Bishop, is between five to seven, plus the hotel’s direct website. The rationale behind this is that “It’s putting the other channels to work as they’re competing for the same inventory. If you’re only marketing with a handful of channels, they don’t have to work so hard to sell your inventory.”
Hoteliers should also consider working with wholesalers, as “their customers are not buying through Booking.com, Expedia, or a hotel’s direct website. So that opens up a whole new set of potential customers for a hotel. It’s incremental growth in demand.”
Selecting booking channels is also a decision that needs to be made alongside marketing strategies, so a hotel can feel that the chosen channels are a good fit in terms of branding.
Bishop urges hoteliers to remember that “each booking channel is unique. The data is a vital part of – but not the whole – story.”
