I often come across hotel owners who insist that their hotel is performing well and as such, they see no need for a marketing strategy or a dedicated sales effort. If your hotel is reaching target with little or no sales or marketing, then you are sitting on a perfect 10!
But – and it’s a big BUT – after further conversation and some quiet digging on my part as to what channels the guests are using to book rooms and where the business is coming from, the truth is revealed: often, a large percentage of bookings stem from third party websites such as booking.com, TripAdvisor, safarinow and lekkeslaap. If this is not managed carefully, this can result in a precarious predicament! This reminds me of the best lesson I learned at varsity – own the client.
Face it, if you don’t own the client, someone else will, either your direct competition or a third party agent. These third party booking portals are new-age travel agencies forging an undeniably significant place in the industry. Hotel professionals, needing to balance their income streams, are doing themselves a (sometimes up to 35%) commission disservice by relying solely on business generated from third parties. You can get away with it for a while, but soon your competitor will take over your market share at full value while you slide down the discount spiral. Abdicating your inventory at a premium to a third party is going to land you in trouble.
The problem is, we are all guilty of this to an extent. Owning the websearch is a minefield, and besides, these third parties have the monopoly with clout already established. But once you do the numbers, you will be surprised at how this eats away your profit. At BON Hotels, we must admit, our website bookings have been outperformed by certain third party portals, essentially overtaking our relationship with our guests. Not good thinking.
So we put our troops to work. I reflected on how, at a previous employer, we picked up on the evident intermediaries selling our product and taking a fat slice of our pie. I was tasked with the project of ‘dis-intermediation’ of our customers, and by creating a strategy of owning the client via a loyalty program, we managed to salvage our direct bookings and take back many of our own clients.
The result at BON Hotels is BONami, our loyalty program for servicing our loyal guests and maintaining these, the most important, relationships.
I understand ‘a bird in the hand’ and yes, the business we garner from third parties is helpful, but we would be silly to ignore an aggressive approach to owning our own relationships.
First prize equals a direct booking at 100% of our rate.