March 10, 2017 · Stuart Butler
How To Easily Reduce Your Reliance On OTAs By Understanding Customer Expectations
In the 20-some years since Microsoft launched Expedia, we have seen a lot of changes in the online travel agent space. There have been so many startups, each offering some minor evaluation or a unique twist on the Online Travel Agent model. We’ve seen the invention of META search. We’ve seen TripAdvisor evolve from a helpful resource into a real competitor of the OTAs. We’ve seen Google continue to get more aggressive and begin to take hotel bookings seriously. And, we’ve seen lots and lots of consolidation as Priceline and Expedia jockey for top-spot.
Whether you love them or hate them, most people would say that the OTAs have become a dominant force in the industry because of their sheer size and because they have infinitely more resources at their disposal than a single hotel property can ever imagine. Some may also say that OTAs have not helped increase the total volume of travel and therefore have become a totally unnecessary middleman – a middleman that does nothing more than suck the profits of the hotels. The truth is that OTAs arouse out of the ashes of a very broken economy. We were in a major recession, travel was in decline, and hotels were desperate to drive new business. To be fair, at the time, the OTAs probably saved a lot of properties from bankruptcy.
Back then, search engines weren’t nearly as sophisticated and neither were consumers. For years, hotels had relied on aggressive marketing to their existing guest history database for business. They found themselves in a scenario where they needed to drum up an increase in new business and they had limited ability to do that on their own. They had no choice but to turn to their knight in shining armor, the OTAs. But, that was then and this is now.
Fast forward to 2017, and now hotels have the ability to control their own destiny. They have the ability to build a cutting-edge website at the fraction of the cost of only a few years ago. They can put their rates and inventory out for the world to see on hundreds of channels, they can invest in cost-effective and targeted advertising across the entire Internet, and they can build massive social following and huge email databases. Best of all, they can track every penny they spend and figure out exactly what is working and cut the stuff that isn’t.
If you’d told hotel marketers 20 years ago about the magical world that we live in today, they’d likely tell you that they wouldn’t need to lean on OTAs as heavily as they did back then. And yet, here we are. Hotels are leaning on OTAs more than ever. Why? Has everyone fallen into a homogenized world of mediocrity. A world where having a website and a booking engine is “good enough” to the majority of people. A world where people would rather do what’s easy as opposed to what’s right. A world where OTAs are a faucet that can be turned on at a moment’s notice and fill in that occupancy gap for this upcoming weekend.
Not only is this lazy, but it’s totally unnecessary. In this blog post, I want to walk you through some common-sense tactics that you can implement on your hotel website with minimal effort and that will have a dramatic impact on your hotel’s conversion rate and reduce your reliance on the OTAs.
Consumer’s Expectations Have Evolved
It’s fair to say, that as much as the travel industry has evolved over the past 20 years, it is nothing compared to the shifts we’ve seen in consumer behavior and expectations. We now live in a world of on-demand instant gratification. As consumers, we know what we want, and we want complete control over when and how we get it. This started with online shopping, and how we’ve come to expect free or next-day shipping from sites like Amazon. It’s been reinforced by how we consume media, starting with DVRs and now with on-demand streaming services such as Netflix and Amazon Prime. In addition, as we’ve become more savvy users of technology, technology has also become more intuitive and more humanized, starting with touchscreen and continuing with voice activated smart-homes, a lot of the friction of adopting new technology has been removed and technology is now an extension of us. We are to all intents and purposes, augmented versions of who we were 20 years ago.
During this same time, we have also become smarter at how we use the Web. Look at the shifts in keyword search volumes on Google as an illustration of this. At the same time that search volume for broad terms has decrease, volume for long-tail (i.e. more discerning) terms has increased. We have learned what works and we have become a more discerning consumer.
We no longer simply pull out a copy of the yellow pages and randomly pick a business that is near the top of the list and “sounds good” to us. When selecting a hotel, we spend time, searching for rates, location, amenities, and reviews. We often know what we’re looking for before we even go to a search engine. A searcher 10 years ago may have typed the query “hotels in myrtle beach”. Now, they may type “kid-friendly hotels in Myrtle Beach with a lazy river” or “oceanfront 2 bedroom condo near myrtle beach skywheel”. They have learned that they can have unique requirements and they have learned there are providers out there that will give them exactly what they want.
A symptom of this change in behavior is a tremendous drop in the total number of unique websites that a leisure traveler will visit during their research. A recent study by TravelBoom suggests that the number of websites being viewed may have decreased by as much as 88%. People are starting further down the purchase fuel and are a lot more efficient at finding what they want. Unfortunately, they are often finding what they want on an OTA site. This is typically at the expense of the property’s own website.
OTAs build their mousetraps with this in mind. They show the important information front-and-center and they make it easy for the customer to search, sort, and filter based on their personal requirements. Go try an OTA search for yourself. It’s friction-less beyond belief, especially if you’ve ever purchased through them in the past.
Reviews Are More Important Than Ever
In a 2016 leisure travel study, TravelBoom also discovered that 83% of leisure travelers will not make a booking without first reading a review on the property. Let me explain what that means in plain English. It you don’t have reviews on your own website, 83% of people who are already on your website will leave your website to read a review before making a booking. Not only is does this expose that consumer to your competitors, but it also exposes them to your other distribution channels. You’re essentially competing with yourself. The saddest part is that it’s totally preventable by simply adding reviews to your own site.
I can hear the naysayers now. “People won’t trust reviews on my own site”. In fact, we found the opposite. In the same 2016 study, the most trusted source of reviews, according to more than 2,300 leisure travelers surveyed, was the hotel’s own website. Trusted more, than the OTAs, local destination portals, and even TripAdvisor.
The other argument against reviews is that you don’t want to show anything negative on your site. I push back on that argument. People are already reading reviews, Ii it not better to have some control over those reviews. Your choice is simple: 1. Let them leave and go read unfiltered reviews on TripAdvisor, while simultaneously being exposed to your competition. Or, 2. Control your own destination by highlighting the reviews that help you put your best foot forward. I’m not advocating that you remove all of the negative reviews on your own site. I’m saying that you can prioritize what the consumer sees and you can define your own policy related to what constitutes a fair reviews. And, you can also respond directly to the folks who have something negative to say and resolve the problem before they start posting negative comments across the Internet.
If you have a solid post-stay strategy, you can do a better job than anyone at soliciting reviews. So, not only does this approach improve your own website, it can also help your online reputation on other sites as well because you’re now containing the negative reviews in your own environment.
OTAs Use Simple Psychology To Manipulate Behavior And You Can Too
Let’s take a look at the screenshots from Booking.com, below:
Do you notice what they’re doing to influence the purchase? The are putting a tremendous amount of forward pressure on the conversion funnel. They are anticipating the questions and the roadblocks that are inevitably going to occur and they are resolving them before they happen.
So, let’s break some of them down:
- Reassurance – sentences such as “FREE cancellation” and “No payment needed” ensure that the guest isn’t going to have the dreaded buyers remorse.
- Fear of missing out – not only are they telling the guest that they already missed out on the best deal, they are also saying that the next best one is selling out fast. This creates a sense of urgency that forces the guest to make a quick decision
- Social proof – using both reviews and how recently someone booked the property is another way of reassuring the guest by saying, “other people have already done it and they don’t regret it”. People need to know that they aren’t making a mistake.
- Being helpful – the best way to get someone to like you is to be helpful. Booking.com does this by providing a great user-interface, but they also figure out what matters to the guest and make it very visible. They show the location of the property and it’s vicinity to a landmark. They not only show the average review score, but they humanize it by adding a word such as “wonderful”. They have identified which amenities are most important and clearly show if the property has free Wi-Fi and parking.
Overall, they do a really good job of helping the guest make a decision. They don’t have to go anywhere else. All the information is available right there and is easy to digest. Knowing this, why then, do the vast majority of hotel websites contain the exact same, generic content and functionality and none of these tried and true methods?
This will be part of the discussion in an upcoming webinar, hosted by TravelBoom, StayNTouch and Flip.to. If you would like to learn more and participate in the webinar, click the image below to register.