Skift Take

For hotels looking to drive direct bookings, simply offering more competitive pricing or better loyalty programs is no longer enough to compete with online travel agencies.

This sponsored content was created in collaboration with a Skift partner.

Hotels have a lot to gain when customers book directly with them. It allows properties to own the customer relationship and ensure the best possible experience before, during, and after their stay. It also gives hotels vast information and data about individual customer preferences, as well as the opportunity to offer ancillary services and encourage future bookings.

While online travel agencies (OTAs) are a valuable part of any property’s distribution strategy, hotels have taken a stand against them in recent years to encourage customers to book direct. They’ve launched million-dollar advertising campaigns, have beefed up loyalty programs, and have adjusted their prices.

Hotel bookings made through OTAs come at a cost, both literally and figuratively. There’s commission involved on the individual transaction, not to mention the fact that when OTAs cross-sell products (If you like “X”, you may also like “Y”), customer loyalty is at risk. When added up, these costs become a sizeable percentage of the average booking value. But whether an individual hotel, or hotel chain, either large and small, competing with the marketing budgets of OTAs usually isn’t a viable option.

With the help of the right ad tech partner, hotels can capitalize on new opportunities in the marketplace. As metasearch sites such as Trivago, TripAdvisor and Google Hotel Ads separate their searching and booking functions that OTAs serve, hotels are able to re-route the traveler directly to their website. Once they’ve done so, the right partner can help you track which marketing dollar, from which source, leads to the best return. That performance can then be tracked, allowing hotels to manage against a target cost-per-room night booked.

Retargeting plays a major role in driving direct bookings as well. Depending on how much customer segmentation the hotel desires, spending can be finely tuned to target the right person. For the larger chains, that might mean segmenting users into traveler types and loyalty segmentations. For smaller chains, a focus on loyalty status might allow for an appropriate budget allocation toward higher value clients.

For instance, if a traveler is highly likely to stay with a property based on their loyalty status, it would make more sense to allocate smaller budget amount to secure their business. On the other side of the spectrum, a customer with little-to-no loyalty status with the property would garner a greater focus, as the booking is likely of higher value.

In both cases, spend is focused on the activities that deliver an acceptable cost of sale. Once it’s no longer economically sensible to continue spending, hotels can settle in to the “economic equilibrium” where an OTAs’ marketing muscle can take over.

CheapOair is one such travel provider that saw direct results to its bottom line by partnering with the right ad tech partner. Through its partnership with Criteo and the employment of Criteo’s App Advertising retargeting function, CheapOair delivered highly personalized ads that led to a 37 percent increase in bookings. To learn how, click here.

This content was created collaboratively by Criteo and Skift’s branded content studio, SkiftX.

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Tags: app, booking engines, criteo, digital, mobile technology, ota, technology

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