OTA booking sites provide convenience at the cost of personalization, higher prices, and lower marketability. A small investment in developing a direct booking pipeline can not only lead to an increase in revenue, but it’s a strong step towards developing a unique brand that guests can recognize and seek during future vacations.

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This blog is written to teach property owners about direct booking benefits and provide direct booking strategies to bring new guests to your site and retain them over the long-term.

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History of Hotel Direct Booking vs. OTA 

After an earnings call last week, Airbnb stock dropped 14%. Why? Business Insider writes “Airbnb told investors to temper expectations for the third quarter because of waning customer demand.” While the company saw an increase in bookings in Q2, it seems like Airbnb is preparing the market for what a future with fewer Airbnb bookings might hold.

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Increasing Market Share of Third Party Sites

Online travel agencies (OTAs) such as Airbnb have been very successful ever since their launch in 2008 and established themselves as an essential part of the vacation rental business. As of 2023, the company reported a 12% year-over-year increase in online booking and a 17% increase in revenue. 

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Their success can, while multifaceted, have largely to do with their convenient service to both short-term rental owners and the guests. OTA bookings streamline the guest experience since the site visitors can find various listings from all the available properties. At the same time, property owners can ensure that their listed property will be visible to potential guests with the OTAs featuring high search engine optimization (SEO) to make sure that the postings appear on top of most commercial search engines and metasearch engines. 

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Like with most services, the services that third-party booking platforms provide come at a cost. For property owners, these third-party sites can take a large cut out of the total revenue via commissions and service charges. For guests, the service charges make the rates look more expensive than the property owners intend. The disadvantages of OTAs are not solely limited to finance. The streamlined, third-party websites make it additionally difficult for property owners to personalize their listings.

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Why Direct Bookings are Essential for Hotels

The hotel industry soon realized these issues and decided to develop hotel direct bookings to circumvent the additional charges and lack of personalization options. Major hotel companies such as Ritz-Carlton or Marriott feature hotel websites with integration with their social media channels that create an accommodating booking experience without worrying about the OTA fees. 

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Direct hotel bookings are not an industry-exclusive strategy, however. It is applicable throughout the hospitality industry.  Direct sales via online bookings will solve similar issues for short-term rental property owners. 

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What is a Direct Booking?

Direct booking in the context of the short-term rental business will establish a direct relationship with the guests during the booking process by avoiding the usage of third-party platforms such as Airbnb, VRBO, or Booking.com. To accomplish this, the host must provide all the services that an OTA would provide and more to persuade the guests to use the new direct booking website.

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Advantages of a Direct Booking

The advantages of successfully managing a functional direct booking website are plentiful. Here are some examples of the benefits that short-term rental property owners can reap. 

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Better Margins

The immediate advantage is in no longer needing to pay for the commission fees that are attached to the OTA websites. The revenues generated by direct website bookings are solely for the property owner, which is impossible to have when one involves third-party bookings, which can easily take up to 15-35% of the total revenue. 

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Customer Satisfaction

OTAs also charge a service fee to the guests who are using their booking channels. Offering the guests a direct booking option allows property management to offer them the best rates possible along with exclusive deals that can further attract website visitors to book through the platform.

Further options such as posting online reviews or posts from the social media platforms on the website further enhance the user experience as well.

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Increased Loyalty

OTAs such as Airbnb will often prioritize categorizing the listings by location rather than the hosts. This can make it difficult to advertise other properties in the same city or elsewhere in the globe, which can be fixed through direct booking. Positive customer experience can now be used to encourage repeat bookings. Repeat guests can easily rebook the short-term rentals that are managed by the property owner.

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Motivating Rebooking

Reaching out to past guests is also easier with a direct booking website since it is one of the easiest ways to collect guest data which is essential to generate repeat business.

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How to Drive Direct Bookings

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Create a Quality Website

The most essential element to generating direct booking is creating a functional, appealing website. Many online booking engines offer no commissions per booking that can be used to not only make booking easier but possess other features such as applying conversion rates for different currencies. Some can even aid in creating customer segments by collecting contact details and guest data, which can be used to personalize the guest’s website experience by offering properties that are popular for their demographic. Also, make sure that the website integrates an effective channel manager that can properly display all the available rental properties.

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An ideal website would not only offer a seamless booking process but also provide additional attractions to retain website visitors. For example, having a tab of positive guest reviews can help potential customers feel assured in moving forward with the reservation. Another way to appeal to the visitors would be to feature quality images of the short-term rentals that would not be crudely cropped like they are on OTA websites.

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Generate Traffic to your Website

The best website in the world is useless if no one can find it. Ensuring that the local SEO is maximized would ensure that search engines will put the website on top of the search list. Having blog posts that have high local SEO visibility can be one of the methods to generate increased site traffic. We use Positional for our SEO Marketing and they can help you too.

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Another way to generate traffic is through social media marketing. Social media followers can be introduced to the new website through posts. Adding special offers that can be claimed only by interacting with the post can also boost social media interactions as well. 

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Retaining users is equally as important as acquiring them. Offering loyalty programs or integrating a property management system to create a universal platform for guests throughout their stay would enhance user retention.

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Streamline the Booking Process with a Chat Widget

Ideally, online travel agents can provide support to customers who may have questions about booking a reservation. Unfortunately, having a 24/7 manual hotline can be costly and often inefficient. Chat widgets can aid in solving FAQs, but they often have limits to the type of questions they can answer. 

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Build a CRM

A guest that books through your direct booking site once is nice. A guest that continues to book through your direct booking site is a scalable, retentive business. HostAI can aid property managers throughout the guests’ stay and make sure they book another stay. What’s important is that you have a source of truth for your guests’ contact info (a CRM) such that you can retarget your guests to book directly again. 

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Remarket with Emails

One of the most advantageous points of owning a direct booking website is the ability to collect essential guest data, like email addresses, that can be used to maintain customer retention. Develop effective email marketing campaigns that aim to persuade former guests to return. For example, sending emails with special deals for returning guests may encourage them to at least visit the website again to explore potential options.

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Why Direct Bookings Are The Future

The demand for a personalized experience is glaringly visible in the current market. An Epsilon Travel Survey suggests that over 87% of tourists prefer companies that offer a personalized experience. Such an experience is difficult, if not impossible, to achieve through a third-party OTA website. 

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Build a Brand

Features such as a unique website paired with an active social media platform enable the property owner to develop a brand reputation that can appeal to tourists. It’s very difficult to establish a brand in OTA.

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Remember that a direct booking website provides an opportunity to have the guests feel like they are part of a community. Maximize the options that the guests have from the very beginning. Appeal to their interests through visual aids such as pictures of rental properties or a video showcasing a popular property. Have a chat widget that asks the right type of questions and offers customized deals to fit their needs. Offer potential upsells and recommended activities in the neighborhood to maximize the amount of agency that the guests have over their visit. Lastly, give them a constant reminder that they are getting the best rates and services by using the direct booking website over other third-party ones.

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Making constant social media posts off of testimonials and exclusive deals can create a positive loop of increased interest. These posts also allow former guests to interact with each other and create a community around the brand.

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How HostAI Can Help

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Automated Messaging and Chat Widget

Our chat widget (currently in beta) is built to streamline the booking process on your direct booking site. It will use AI to answer top-level inquiries and convert potential guests into confirmed reservations. The beauty of it is that it integrates directly into your HostAI Inbox, giving you the ability to pool all your messaging channels—PMS, Email, WhatsApp, SMS, and chat widget—into one inbox. 

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Moreover HostAI does not provide users with the typical impersonal, awkward customer experience that is often attributed to automated messaging. Better yet, machine learning will ensure that the chat will continue to evolve through every encounter. HostAI even knows when it should defer communicating with the guests to the host. In more serious situations that require direct intervention, HostAI has features to alert the host on urgent messages that require their immediate attention.

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This way, the property manager can rest assured that the majority of the interactions with the guests are taken care of by HostAI while the most important ones are immediately brought to their attention.

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Retain and Grow your Guest Database with HostAI

Establishing a strong customer relationship management system (CRM) is essential in ensuring a positive guest experience. A positive guest experience is cultivated by taking care of the guest at all hours of the day. HostAI’s guest support platform can not only help with automated guest messaging and upselling but it also builds a contact for each of your guest for you to reach out and retarget to drive more direct bookings, creating a flywheel for your business.

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Conclusion

Ultimately OTA booking sites provide convenience at the cost of personalization, higher prices, and lower marketability. A small investment in developing a direct booking pipeline can not only lead to an increase in revenue, but it’s a strong step towards developing a unique brand that the customers can recognize and seek during future vacations.

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