When You Buy a Hotel, Direct Booking Can Be Very Beneficial to Your Business

As you search through property listings to buy a hotel, Southeast International is here to guide you through this process, offering guidance and answers to some of the most critical questions you may have. Today, we look at direct booking and the benefits it offers to hotel owners.

What is Direct Booking?

In our modern, technology-oriented society, direct booking has become easier and more popular than ever. Direct booking gives potential customers the ability to book their hotel stay, or other services, directly with the supplier rather than through a travel agent. For hotels, direct booking can be a time and cost saver, because it frees up the front desk, call center and associated staff for other duties. Hotel properties for sale should indicate on their websites whether or not they have direct booking.

As You Buy A Hotel

Something to consider when you buy a hotel is the commission expense incurred when customers use a third party travel agent, whether online or not. Direct booking gives the customer the ability to make their reservations at any time of day or night, from any place that has a secure internet connection, and saves you money. Direct booking gives you, the hotel owner, the advantage of letting the computers do the work, saving time, salaries and commission fees. Online Travel Agents (OTAs), including Priceline and Trivago, have changed the industry. Hotels, particularly the large chains, are working now to save on commission fees by recapturing those OTA reservations through direct bookings.

Gated Discounts

When you buy a hotel, consider that many large chains, as well as small independent hotels, are now rewarding customers with discounts, typically about 10% via a “gated discount,” where the loyal customer logs in to make a reservation and then receives a loyalty discount. The “gated discount” is a positive incentive to increase customer loyalty as well as generating cost savings by eliminating the commission fee charged by OTAs for bookings.

Marketing Your Direct Booking

Research has shown that the number one reason consumers leave a hotel direct booking site and head to an OTA to book their reservation is they believe the OTA rate will be cheaper. This is the year that the large chains have chosen to spend millions educating their customers that it will pay off to book direct. Hilton’s multi-million dollar “Stop Clicking Around” campaign is evidence of this new marketing strategy.

But what about the smaller, independent hotel? Now is the time for independent hotels to piggyback with the large chains and aggressively promote direct booking on their websites and in other advertising. Many hotels, large and small, offer additional perks like free Wi-Fi, free “welcome” foot massages and other free amenities. When shopping hotel listings, be sure to look for opportunities for free amenities to offer to your guests that will promote your gated discount loyalty program.

As you begin your search to buy a hotel, remember that getting your customers into your property at the lowest expense per booking will increase your profits. Direct booking is one way to keep reservation costs low and increase profits.

Southeast International Hotel Brokers is here to help you buy a hotel or sell hotel property. Contact us at (417) 865-2520 to start your hotel search today.