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15
August
2016

Why almost 80% of customers abandon their direct hotel reservations (and how to deal with it)

By Lisa Shields

10 : 29h
1 Comment

It is no secret that the hospitality industry is full of challenges. At present, there is a global lodging and accommodation movement among hoteliers to rely less on OTAs (online travel agencies), such as Expedia and Kayak, and garner increased direct bookings from the hotels’ own websites.

While OTAs have done a terrific job of hijacking the hotel booking industry from the hotels themselves, with 76% of hotel reservations completed through an OTA, they have run amok with exorbitant commission rates, averaging a massive 20%. What is the point of getting a few more people to your hotel if you are losing a fifth of your revenue each time?

With the hunt for more customers and increased savings from less OTA commissions, the primary goal for hoteliers is how can hotels solve the dilemma of 77% of potential customers abandoning direct reservations from the hotel website?

To start off, let us look at the reasons why so many customers give up on booking direct.

“I’m still just looking around for the best deal.”

As seen above, the overwhelming reasons why customers don’t follow through with direct online booking are 1.) browsing or desire to conduct more research and  2.) price comparisons between sites/price initially seems too high.

86 % of hotel reservations are made online these days. Because the internet is now the norm for booking hotel rooms, more customers have access to more options, which can be overwhelming, and induce a sense that if they keep on searching, for days or weeks, they are eventually guaranteed to find the best deal in the universe.

Have you ever been to a restaurant and said to yourself “Wow, this is just too much to choose from, how do I make a decision?” This is exactly what is happening to travelers when trying their darndest to find a room.  

The hidden harm of hidden fees

Why 80% customers abandon their direct hotel reservations (and how to deal with this)

Following one of the previous points we made that the price being too high scares away customers, it may seem enticing to display a lower base rate for rooms to attract customers or a slyly deceptive “Rooms from $XYZ” text. However, if there are fees associated with “booking” or holiday rates that aren’t displayed until further down the booking process, this scares away customers.

Even if the base minimum is attractively affordable, customers feel cheated when they take the time and energy to initiate the accommodation arrangements only to see that each step of the way tacks on more costs.

The majority of customers, 53% to be exact, abandon the reservation process when shown the total cost at the end. Customers are savvier than ever in the digital age, and sneaking in extra fees never goes unnoticed.

Booking process takes too much…

...time, involves too many forms and asks for too much personal information. All three of these components are fantastic at wearing customers out while planning their reservations. If a customer is planning a vacation, with relaxation in mind, it is highly disruptive if the booking process stresses them out.

Approximately one-quarter of customers abandon booking reservations when asked for personal and payment details on a hotel’s booking website. Asking for too much detail from customers during the booking process is not only a bit invasive, but rather pointless. After all, they are going to show up in person with their credit card when they arrive and walk to reception.

Furthermore, if your hotel site is not optimized for mobile devices you will lose potential guests in droves.

As of this year, over 50% of hotel booking are made using a mobile device, and slow loading speed is the reason why 32% of travelers give up on seeing their reservations through to completion.

Now that we have covered the primary reasons why customers give up on direct hotel reservations, we will go over what you can do about it.

Incentives and special offers

We mentioned how valuable it is for your customers to know the total cost of their accommodation as early on in the booking process as possible. The absence of hidden fees is further fortified by incentivizing your guests’ to stay on your site.

Not only display on your site that there are no hidden fees, but prominently display promotions that are only offered to guests when they book directly through your website, and nowhere else. Be creative with how you incentivize your guests. They can range from earlier/later check in/out times, free neighborhood tour guides, partnering with a local landmark restaurant for special meal deals, etc. What is important is that you reinforce that these are specific only to direct booking.

Location, location, location…

Why 80% customers abandon their direct hotel reservations (and how to deal with this)

Your hotel is more than just a swank and indulgent place for travelers to kick up their feet and relax; it is also a hub for accessing all that the surrounding area has to offer. While OTAs may touch upon some of the larger attractions that your location has to offer, you know the area first-hand.

Feature on your hotel site, a dedicated page for everything, the conspicuous and the hidden, that the hotel location has to offer guests. Don’t just sell customers on your hotel, but also on the attractions of the locale.

Online chat availability

Remember how we mentioned that the primary reasons for abandoning direct reservations are “just looking/need to do more research”? What if you can help them make up their minds?

Assigning staff to monitor customer time on your direct site and prompting them to relay any inquiries they may have is enormously valuable. It is not just that you are able to answer any questions regarding how nice your rooms are, but you are taking the first step in establishing a human relationship between your hotel and the customer. This is an important component that no OTA can offer.

Keep improving with customer feedback

Most hotels send email surveys to guests shortly after they check out to solicit feedback on their stay, what they liked and did not. Extend the survey to include questions concerning the booking process.

What did they like? What could you improve? What will make them stay at your hotel again on their next trip to the area? Perhaps there are other special offers that would have been even more enticing for guests, but you will never know unless you ask.

Standing on your own two feet

Now you have the tools to effectively combat the primary direct booking impediments. While your hotel is going to indefinitely rely upon OTAs to a degree, the more streamlined, honest, friendly, and helpful your hotel website is for direct booking, the more customers will be willing to forego OTA booking and go straight to the source: you. An exceptional, hassle-free booking experience, combined with a satisfying stay and rewarding incentives will earn you greater profits and customer loyalty.

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