Hotels increase revenue in a four-step approach in the BookLogic Direct Bookings Strategy to meet industry-standard rate parity agreements and increase direct bookings through dynamic packaging and special offers.
BookLogic has been trialling new techniques to drive online booking conversion with direct business by managing its hotel clients' rate parity strategy. Several hotel groups and independent hotels have made significant gains by overcoming rate parity obligations set by OTAs.
The hotel-booking specialist has developed techniques to provide market orientated rate strategies and progressive discounts through dynamic packaging that offers better deals to a hotel's customer-base. As OTAs begin to drive hotels to deliver rate parity, the hotel industry has been seeking ways to offer direct offers, promotions and room rates that will not have them penalised by their third party agents, who can charge up to 49% commission.
BookLogic has developed and tested, with resounding success, four tactics to improve visibility, conversion and bookings direct to hotel websites:
1. Pricing by customer market: rate shopping of the targeted customer market and providing competitive pricing within this market, instead of setting rates by the hotel's location – allowing greater flexibility in setting rates by customer affordability.
2. Progressive discounts by length of stay (LoS) – direct sales have more flexibility for LoS than through OTAs and third-party channels. The hotel is able to offer discounts and special offers on alternative lengths-of-stay, especially where many OTAs cannot offer this type of rate structure.
3. Dynamic packaging to hide the room rate similar to Expedia and Hotwire: distributing opaque rates, package rates with flights, cars, transfers etc dynamically through its direct channels.
4. Loyalty programme – providing an account to customers to find better deals. BookLogic's Booking Engine allows customers to login via Facebook or personal accounts to access private rates, therefore avoiding violation of rate parity.
"Following lawsuits in Europe against OTAs by the European competition committee, the industry is being prohibited from enforcing rate. So it’s up to the hotel how to enforce the strategy. By utilising data and technology we have identified points in the sales and booking process to offer better rates to customers to catch the direct booking," said Oral Yigitkus, CEO, BookLogic.
"We have optimised the performance of our clients' websites with customer centric pricing and dynamic packaging that offers market orientated rates, as well as employing similar direct sales techniques that are employed by Expedia and Hotwire. This allows our hotel partners to commit to their contractual obligations yet catch as much direct traffic and offer a better package to holidaymakers," continued Oral Yigitkus.
Hotels improving business and providing a competitive offering in the travel market include Euphoria Hotels, Akka Hotels and Otium Hotels. All of which have improved revenue during 2015 by providing dynamic online packaging and rate setting. During a turndown in the Turkish market, reported at 50%^, the aforementioned hotel groups worked with BookLogic to offer product unavailable on OTA and third parties or have used technology systems to optimise the distribution of their room rates.
In the case of a 34-room boutique hotel in the centre of Istanbul BookLogic increased revenue by over 4,000% by introducing a online direct booking marketing strategy with market-focussed pricing and progressive discounts alongside promotions. This allowed the hotel to become more independent, avoiding being hit by the dramatic fall in sales to traditional booking channels, plus not having to enforce full rate parity strategies by offering opaque deals.
While for a 12-room boutique property catering to luxury travellers from the Eastern European market place, BookLogic created specific rates by traveller market supported by a specialised online marketing campaign to drive traffic, resulting in a 32% growth in revenue between 2014/15.
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