Hotel booking trends post(ish)-COVID: What’s squeezing your booking times and margins—and what to do about it

Although travel has bounced back from the COVID-19 pandemic, hoteliers are facing a new set of challenging travel trends. Some 92% report significantly shorter booking lead-in times than compared to the pre-pandemic norm. Complicating things further, 50% of leisure bookings are now coming from costly online travel agencies (OTAs). The convergence of these two trends is shrinking hotel margins and making it harder to maintain control over hotel operations.

So if you want to grow your hotel’s margins and have a greater say over your business, where should you focus your hotel marketing strategy? The answer: direct bookings.

Understanding current travel trends

The uncertainty of the past two years has had an enduring effect on travel behavior. On one hand, the appetite for travel is intense. Properties that would normally have to drop their rates during the off-peak season haven’t needed to do so. On the other hand, travelers are less likely to feel comfortable planning their journeys far in advance, and many don’t have the confidence to plan directly with hotels. If you want to tap the potential of the post-pandemic travel surge, you’ll need to be able to navigate this new landscape.

 

Website traffic and bookings suggest that the summer and autumn seasons exceeded 2019 in value. Yet 75% of hoteliers surveyed for the 7th What’s Next for Travel? Report expect shorter lead times to remain throughout 2022. That may be because travelers are worried that restrictions will be reintroduced if a new COVID-19 variant emerges.

 

Shorter booking windows are a challenge unto themselves. As travelers shift into a pattern of last-minute planning, hotels have less time to project revenue, forecast occupancy, and plan schedules. Every time booking windows shrink, it makes it that much harder to run a profitable business. Building trust is the key to changing the outlook of guests.

 

Additionally, Expedia, Travelocity, and other OTAs are enjoying quite a year. According to Phocuswright’s latest travel research report, OTA hotel gross bookings rose 97% from 2020 to nearly $41 billion—almost back at 2019 levels. That’s 52% of all hotel online leisure sales in 2021. While OTAs do help put heads in beds, they eat into profit margins.

 

The growth in OTA use is both a challenge and a blessing. No hotelier should fight OTAs, but it’s harder to develop guest loyalty when a middleman stands between the traveler and the hotel.

 

Optimizing direct bookings

A good hotel marketing strategy can help you overcome the challenges posed by both new hotel booking trends. Direct booking optimization is the name of the game. By building a direct relationship with guests, hotels can cultivate trust and loyalty. Trust and loyalty give travelers the confidence that underpins longer lead times. Direct bookings also bring more opportunities to drive repeat business, such as bounce-back offers and emails.

 

Here are three ways you can optimize direct bookings:

 

  1. Provide a lowest-rate guarantee on your website. When they know they can book direct for the lowest rate, guests will have one more reason to cut out the middleman.

  2. Highlight direct bookings on both owned channels like social media and your website, and paid channels. Even a low-level paid search can do wonders to gobble up those looking for the best deal.

  3. Finally, reach out directly to guests that used OTAs in the past. One effective strategy is a bounce-back offer for those who book direct in the future. Direct outreach allows you to recapture previous OTA bookings and convert them into direct bookings.

 

Analysts do expect that both last-minute and OTA trends will not be as pronounced in the future. That being said, impromptu trips won’t disappear. The growing self-care trend will ensure that spur-of-the-moment vacations gain a level of social acceptability that they lacked in the past. So even as the typical traveler regains the trust needed to plan for the long term, a significant portion of guests will continue to book on short notice.

Marketing to this segment will be a part of direct booking optimization for years to come. Bounce-back offers tailored to the professional in need of a long weekend are one way to get the attention of a new type of traveler. There’s no reason why these last-minute self-care trips can’t be booked directly.

In fact, there may be no travel itinerary as relaxing as a return to a familiar hotel. And with a direct line to your past guests, an invitation from you might be all they need to book that trip.

 

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