Hotels, B&Bs and short stays
Fifteen to twenty percent of every room night goes to the agent that sold it. A direct booking of the same room is the same room at a better price, and winning one is a measurable, buyable thing.
Occupancy is acceptable and the commission line is enormous. You would like more direct bookings and have no way of knowing what one costs to win or whether last month's spend produced any.
What we keep finding
Four things that keep direct share low.
The billboard effect is assumed rather than measured
Guests find you on an agent, then book direct. Or they do not. Every operator has an opinion about how often this happens and hardly any have a number, which makes every argument about agent spend unresolvable.
The direct booking route is worse than the agent's
Three more clicks, a slower calendar, a form that asks for an address before it shows a price. People are not loyal to a commission structure. They book wherever it is easiest.
Brand searches are bought back at full price
Somebody typing your hotel's name into Google was already yours. When an agent bids on that name and you bid against them, you are paying to protect a booking you had, and it is often a large share of the paid budget.
Cancellation is not in the numbers
A booking that cancels is not revenue, and a channel with a high cancellation rate can look like the best performer right up until the month closes.
The moment the commission is decided happened days earlier, on a phone, and almost every hotel is guessing about where.
The arithmetic
The same room night, two ways.
Rates vary by property and agreement. The shape does not, and it is what makes direct share worth spending money to move.
Sold through an agent
- Rate paid by guest: the same
- Commission: fifteen to twenty percent
- Guest email address: theirs
- Repeat booking: through them again
- You learn: nothing about the guest
Sold direct
- Rate paid by guest: the same
- Acquisition cost: whatever you chose to spend
- Guest email address: yours
- Repeat booking: yours to earn
- You learn: everything, and can use it
What we measure here
The numbers a property runs on.
- Direct and agent bookings separated, with the real net value of each room night
- Cost per direct booking, set against the commission it avoided
- Cancellation and no show rate by channel, so net revenue is what gets reported
- Brand search defended deliberately rather than by habit, with the spend justified
- Booking engine measured as a funnel: dates checked, rate seen, details entered, paid
- Length of stay and repeat rate by channel, because agent guests and direct guests behave differently
- Seasonal and event demand mapped, with budget agreed against it in advance
Questions people ask
The ones that actually arrive.
Should we cut back on the online travel agents?
Not as a first move. They fill rooms you would otherwise lose, and a hotel that pulls its inventory before it has a direct channel worth the name usually ends up with lower occupancy and the same problem. Build the direct route, measure it, then decide.
Is it worth bidding on our own name?
Often yes, and it should be a decision rather than a default. If an agent is bidding on your name and appearing above you, the choice is between paying a few pounds for the click or a commission on the booking. That is arithmetic, and it can be done.
Our booking engine is fixed by our property system.
Then we measure it as it is and find the steps it loses people at, which usually produces two or three changes you can actually make. Where the engine itself is the problem we will say so plainly, because that is a decision worth making with the number in front of you.
We are a six room guest house.
Then the retainer version is wrong for you. The useful version is a short piece of work on the listing, the booking route and one measured campaign, and an honest conversation about whether paid advertising makes sense at your scale at all.
Proof
An Australian taxi company
More calls, at less than half the cost, by telling Google which callers paid.
From another sector. It belongs here because it is a clean demonstration of the same move: stop counting the easy event, start counting the one that produced money.
Read the case study- more booking calls
+27%
more booking calls
- lower cost per call
−56%
lower cost per call
- average cost per click
$2.10
average cost per click
Where this usually starts
Two pieces of work, in this order.
Businesses that sell the same way
Your turn
Bring the number you do not trust.
30 minutes. Most of these conversations start with somebody describing a report they have stopped believing.