Trend 4: Path to more direct bookings and loyalty continues to challenge and intrigue 

Everyone loves the idea of direct bookings and increasing their share. Simply put, it’s about lower sales costs and the ability to interact directly with the booker to encourage future bookings. At the same time, reach is always a challenge. Even as part of a global chain, you need a range of diversified channels, including third-party providers, to reach markets that are geographically, culturally or linguistically distant.

One of the most important levers to attract and appeal to a wider range of bookers from around the world is a loyalty programme. But the word loyalty can be very divisive. Some will argue that it’s not loyalty to a brand if a booker participates in the loyalty programmes of 5 different hotel companies. Others would say that loyalty programmes for direct bookings incur additional costs that bring it on par with those of third-party channels.

The shift from business to leisure travel, or the blended version has led to a change in interest in loyalty programmes. Research by Cornell University’s Centre for Hospitality Research shows that hotel loyalty programmes can increase room revenue by 57 per cent.

One thing is certain, then. Loyalty and rewards programmes are on the rise and continue to be a major focus and growth area for most major hospitality and travel companies. Features in demand include flexibility in earning and spending reward points, greater personalisation and instant rewards.

Customers are tired of carrying multiple rewards cards in their wallets and are questioning the use of their personal data and the actual benefits of these programmes. Mobile wallets like Google Pay and Apple can shop travel tickets and loyalty cards, allowing easy access to loyalty programmes.

Other new developments include Flycoin, where loyalty meets cryptocurrency. And Statusmatch looks at how travellers can transfer their loyalty status to a new airline or hotel chain and continue to enjoy the benefits of being a high-value traveller.

Another important lever for direct bookings is metasearch. A well-managed metacampaign can be very effective in driving direct bookings, with an average return of investment of $8 for every dollar spent. But this is now being challenged. Cost per click (CPC) has increased by 150% in North America and EMEA compared to pre-Covid. Add to that the problem of rates being undercut by an OTA. According to this article, 61% of all direct prices appearing in metasearch are undercut by at least one OTA.

Social Booking Spaces are a relatively new arena to generate direct bookings. This hybrid model combines technology and tailored booking endpoints with an ad-supported distribution model. Integrated with TikTok, WeChat, Instagram and other channels, hotels here have the opportunity to generate direct revenue in the mobile space. Technology providers are currently using the social booking space to develop solutions in the form of mini-apps that bypass traditional booking engines such as OTAs or even the hotel’s own website and suggest hotel properties and rooms according to the user’s behaviour on the social network or the host’s digital platform.

Frederic Lalonde, Hopper’s chief executive, predicts a “profound change” in online commerce as the social commerce model already established in Asia takes hold around the world. “Social commerce is completely different,” he said. “You don’t spend money on Google, you don’t even spend money on Facebook or TikTok”.

There has been a lot of talk about attribute-based selling, but it hasn’t really caught on or adopted fast enough to be impactful. GauVendi wants to move away from static inventory management of spaces and introduce dynamic and function-based inventory management. Aidaptive’s mission is to provide hospitality and e-commerce providers of all sizes with OTA-level machine learning capabilities.

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Tags: Distribution Trends 2023

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