For years, hotels and online travel agencies (OTAs) have maintained a frenemy relationship.
But now, as bookings through OTAs have surpassed direct bookings for the first time ever, a number of major hotel brands are more aggressively battling the middlemen who generate billions of dollars in revenue for them but eat their margins and commoditize their brands.
As detailed by the Wall Street Journal, Marriott International, Hilton Worldwide and InterContinental Hotels Group have launched major marketing campaigns designed to get consumers to book stays directly through them instead of through large OTAs like Expedia and Priceline.
Those campaigns include Hilton’s ‘Stop Clicking Around’ campaign, which, as the name suggests, was aimed at convincing consumers that booking through OTAs involves a lot of “clicking around,” whereas booking directly through Hilton is fast and easy. It was said to be the largest ad campaign in Hilton’s near hundred year-old history.
Image via Onemileatatime
If hotels beat OTAs, it will be because of experience, not marketing
But while more marketing dollars will no doubt help hotel brands compete with OTAs, which themselves spend heavily to market themselves, realistically, increased marketing alone is not likely to help hotels win over consumers.
Instead, hotels will need to offer guests a reason to book directly and that will require that they tap their ability to segment guests and deliver better experiences to guests that direct book.
Some are tweaking their loyalty programs to encourage direct bookings. Marriott and Hilton, for instance, last year began offering discounts of up to 25% to loyalty program members who booked directly through their websites. And Hilton now lets its loyalty program members redeem their points to make Amazon purchases.
Price is an important experience lever because many consumers have come to believe that they receive lower prices from OTAs than they do from hotels themselves.
But hotels aren’t stopping there. Some are offering perks, like free WiFi, gift cards and even car rentals, to guests who book directly. Others allow direct-booked guests to select the room of their choice before they arrive.
These moves are a start, but hotels need to do even more at every step of the customer journey.
For example, to generate new demand, hotels can become a source of inspiration for travelers who might not yet have a trip in mind. To that end, in 2014, Marriott opened a content studio “to appeal to the ‘next-generation traveler’ made up mostly of millennials with story driven content marketing.”
Additionally, to counter the OTAs, hotel brands need to recognize that one of the reasons many consumers turn to OTAs is that they can bundle hotel, air and car rental into a single transaction. Most large hotel brands offer package/vacation deals, but more often than not, these are not featured prominently on their sites or integrated into their search functionality.
Finally, hotels should need to think of ways that they can innovate their experiences beyond the basics. For example, Hilton partnered with Uber to allow its guests to book Uber rides directly through the company’s HHonors app and InterContinental developed a suite of apps to help its guests. These include the Planet Trekkers app, which offer “children fun and exciting ways to engage with your family’s travel destination before, during and after your holiday.
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