Hotels were advised to look to customer service when pushing direct bookings, according to the latest JD Power & Associates North American Hotel Guest Satisfaction Survey.
The survey was released as Hilton Worldwide and Hyatt Hotels Corporation both used their earnings calls to highlight improvements to their loyalty programmes.
At JD Power, the company found that 67% of respondents had booked their hotels direct through a branded hotel channel, one percentage point down on the previous two years. Bookings through OTAs had risen by two percentage points on the year to 21%.
Jennifer Corwin, associate practice lead for the global travel and hospitality practice, JD Power, said: “Hotels in all price ranges have excelled at ensuring their customers have a top-notch experience. Years of capital investment in offerings such as higher-end televisions and in-room tablets have left their mark. Now, as hotels look to push customer satisfaction levels higher, their focus should turn to service areas, particularly when it comes to direct booking.”
There were signs that the global hotel operators were paying attention, with Hilton Worldwide president & CEO Chris Nassetta telling analysts on the group’s second-quarter earnings call: “To win on customer experience, we are incredibly focused on innovation. Technology, coupled with data and analytics, play an important role on our ability to truly personalise every step of the customer journey to drive more guest loyalty. From industry first launches, like Connected Room and our partnership with Showtime to continuous Hilton Honors enhancements and offers, we’re leveraging important tools to give our customers the choice and control they want from their travel experiences.”
The company said that it had added more than 3 million new Hilton Honors members in the quarter, to reach 78 million members, with the intention of reaching over 100 million members by its 100-year anniversary next summer. Honors share of occupancy increased 120 basis points in the quarter to nearly 60%.
Hyatt Hotels Corporation also used its earnings call to talk about improvements to its loyalty programme, in this case announcing a loyalty alliance with the 500-strong Small Luxury Hotels of the World.
President & CEO Mark Hoplamazian said: “Our respective footprints are complementary with very little overlap, and this will greatly expand our collective offerings to loyal guests from both companies. In fact, more than 87% of locations where SLH is represented are ones in which there are no Hyatt Hotels today. Additionally, SLH’s collection is primarily oriented to leisure travel, which will enhance the options available to our World of Hyatt members.
“We have been exploring opportunities to enhance the value proposition underlying our World of Hyatt loyalty programme. And we believe our relationship with SLH advances our progress in a meaningful way. The alliance will allow World of Hyatt members to both earn and redeem benefits across a dramatically wider selection of hotels. We believe this exclusive alliance will not only enhance the value to existing World of Hyatt members, but will also attract new members over time.”
Despite the efforts of the operators, a study by B2B data group Fornova reported that hotels were more likely to be undercut by OTAs when the booking lead-time was longer than 14 days. The group also pointed to uncontracted OTAs, which it said were two to three times more likely to undercut hotels’ direct rates on meta-search engines, compared to contracted OTAs.
Dori Stein, CEO, Fornova, said: “Meta-search engines have the deeply held promise of being the great equaliser, in aid of hotels looking to increase their share of direct bookings.
“While offering hotels stronger reach, meta-search engines also reduce the barrier-to-entry for many other OTAs and resellers who may source hotel inventory indirectly, typically from wholesalers. We refer to such OTAs as uncontracted OTAs. For hotels, meta-search engines can be a double-edged sword – while it provides greater opportunity, it also requires more consistent monitoring and responsive management to realise its full potential.”
The group said that hotels and chains pursuing a direct-booking strategy were affected by the distribution trends on meta-search engines more severely, as any rate-parity issue was more easily visible to guests on this channel. This could, it said, result in increased cost from consumer claims and damage to the hotel or brand reputation.
“Most hotels that focus on increasing direct-bookings have some form of ‘best-rate guarantee’ programme in place as part of their marketing and promotion strategy. Such programmes typically offer to refund the price difference in addition to rewards and incentives” said Nir Dupler, chief revenue officer, Fornova, “When guests find these cheaper rates easily on meta-search engines, hotels and brands are left dealing with the added cost of handling consumer claims, which affects revenues and profit.”
HA Perspective [by Katherine Doggrell]: Is the split between direct and OTA bookings a failure for the hotels, a success for the OTAs or just bookings finding a natural level? There was no further detail on how the bookings were split in terms of first-time or repeat bookings and, in terms of rhetoric at least, the operators were eager to point to growing contributions from a growing volume of loyalty members.
The lucrative repeat booker is of course the target for these schemes, with a perfect world featuring the OTAs only in terms of acquiring new guests. Which causes this correspondent to wonder why hotels can be so very mean to OTA guests.
While loyalty members float on by on a sea of free breakfasts and backstage passes to Taylor Swift concerts, the OTA guest is more commonly shoved in the cupboard under the stairs next to the lift shaft. Rewards for booking direct are one thing, but converting a guest from first timer to loyal member may need something more sophisticated than just offering the chance to join the loyalty programme at reception. A little flirting goes a long way before leaping into a long-term relationship.