In the first part I wrote about the inconvenience of receiving too many bookings for the hotel through Booking.com.
Now, I’d like to talk about the 6 reasons why many hotel websites don’t get good results:
1: Investment in advertising
Channels won’t grow without advertisement.
Booking.com uses a big amount of the commissions it receives to invest in advertisement, this generates more bookings and starts a cycle of growth that is fed and maintained by the hotel.
A hotel with 100 rooms and an average price of €100 will have paid around €76,000 on commissions per year (for 70% occupation and 20% of the reservations coming from Booking.com).
There is something wrong if this hotel is happy paying €76,000 positioning and promoting Booking.com, but it doesn’t invest at all or invests very little promoting and positioning its official webpage, as it’s the case with most small and independent hotels I know.
2: “The hotel website is cheaper”
The cost of the booking system is low (as commission or fixed rate), there are even booking systems that are free and easy to use. If you look at it like that, then of course the cost per reservation is much lower than with Booking.com.
The problem is visibility. A booking system, a good design or even good value for money are not enough: The hotel needs to get the highest number possible of clients visiting its website. If they don’t see it, it’s as if it didn’t exist.
This means investing on online marketing to promote it and give it visibility, that is what Booking.com does with the commissions the hotel pays. Without this investment, the hotel website will have limited capacity to generate reservations and compete with Booking.com.
But, it will be cheap: As cheap as it can get for a few reservations.
3: You don’t have to explain commissions.
Investments do need to be explained. Booking.com charges per reservation, after the guest has taken up his/her reservation. There are no fixed costs, there is no registration fee, and there is no risk. If you don’t get guests, you don’t pay anything. It’s tempting.
On the other hand, investing in the hotel website, like any other investment, means you need to pay beforehand, that you need to place your trust on an unknown environment, that you have to struggle with finance departments, accountants or the proprietors to convince them that they need to spend money on something that didn’t exist before, a new concept difficult to explain, and all of this, dealing with people who don’t understand e-commerce. Disappointingly difficult
4: The hotel website is born with a silver spoon in its mouth. From there on, you need to work hard on it.
Any webpage that is identified by Google as official has already the potential for some reservations, just because, without much effort, it will come up among the first results when searching for the name of the hotel.
I think that this initial advantage will turn into an inconvenience, because many hotel managers will think that there is nothing else to do, the webpage works by itself and they just need to sit and wait for the bookings to come flying in, like Booking.com.
The website received beginners’ bookings, just because it exists, but it can also reach its limit and it will stay there if it’s not helped to grow.
5: Uneven profitability
The cost of Booking.com is transparent: 15%. The hotel can agree to pay more, which probably will mean more bookings.
On the other hand, the investment on online marketing to promote direct sales doesn’t guarantee any return for its investment. It varies depending on the hotel and the circumstances. Besides, individual hotels can’t rely on improving profitability once they start promoting themselves beyond what their brand can get them.
For long term profitability, it is necessary to have a well defined global strategy that should start from the very first moment the hotel is conceived. It has to be designed as a unique and well differentiated product, the best vitamin for profitability.
6: Lack of knowledge or awareness.
I work with the idea that competition between channels is positive because it encourages each player to think on their feet and increases the efficiency of the whole.
Booking.com has been working efficiently to make the most of the commissions hotels pay. They work on it day and night.
To get the hotel website to compete with Booking.com, somebody has to work on it, manage and optimize it for every battle they’ll face or for those market niches that are still growing.
Not all hotel managers are aware of all the many different details that need to be taken care of to help the website grow. The hotel can take care of it, or if it can’t, then it can outsource from specialized companies or consultants. However, if nobody takes responsibility the direct online channel will freeze
SEO, SEM, email marketing, social marketing, affiliate programmes, viral marketing, strategic partnerships, online reputation management, presence in comparison sites, user friendly features and marketing onsite, are all things that Booking.com is very good at. Is the hotel website good at it too?