Is post-pandemic travel preparing for direct bookings?
Up until 2020, OTAs and third parties such as Booking.com and Expedia have experienced a huge growth, leading hotels to an apparently endless loss of market share. However, with the Covid-19 crisis, all booking channels lost an incredible amount of revenue, and among them, the direct channel proved to be the most resilient, especially once guests have learned that booking and communicating directly with the hotel is more convenient since it guarantees flexibility and transparency that were not provided by third parties.
Thus, now that the reopening plan and the vaccination campaign are encouraging 2021 travellers to start booking their holidays again, the past experience becomes a relevant factor influencing new tourists’ habits and their purchasing process, which will not be based exclusively on the price, but will instead focus on given value, provided by a combination of direct communication, customised products and flexibility.
Moreover, Expedia Group chairman Barry Diller explained, “At Expedia, we spend $5 billion a year on advertising. We won’t spend $1 billion on advertising this year.” This implies that hotel’s owned channel will have the chance to appear in the top positions of search engines.
In this new scenario, hoteliers should focus on redefining their sales & marketing strategy and consider how to maintain a balanced distribution mix of direct and intermediary channels. Some recommendations to build a strategy based on direct distribution channels:
- Local travel is the first to recover, therefore, past guests and short-haul travellers are a priority and should therefore be engaged with direct communication, reward programmes, members-only and subscription models, gift vouchers to spend in future travels;
- Ancillary services, as already reported, could be the deciding factor increasing customer loyalty as well as hotels’ revenue: tourists are always more interested in customised and unique experiences, which is an opportunity for hotels to differentiate and innovate their offer;
- Intermediaries should be included in the strategy depending on the target to reach, especially when considering the long-haul foreign travel markets.
At Twissen we observed how the scenario emerging from the pandemic will be characterised by new travel behaviours leading to new opportunities for hotels and innovative business models. Even if it is not possible to predict whether direct bookings will dominate in the long term, as shown by recent data, hoteliers willing to recover quickly and develop a strategy based on direct channels should take advantage of the current situation and focus on building value for guests by considering the fundamental role of trust, flexibility and safety as well as the relevance of digital and seamless solutions.