Direct Channel Optimization for Hotels
The key to being a profitable hotel
Rodrigo Perez Garofalo
Aug 8, 2024
TABLE OF CONTENTS
How to double your direct bookings?
That's a question every hotelier might ask.
With the amount of commissions being paid yearly to OTAs, direct channels are becoming more interesting by the day.
However, I still see a gap in knowledge between the aspiration of getting more bookings, and the actual steps that are needed to make that a reality.
This is the first session of a course looking to solve exactly that.
My experience working with hotels to achieve this kind of results has shown me that it's possible if you know what you're doing.
And the method we're going to use is called Direct Channel Optimization (DRO).
What is Conversion Rate Optimization?
At its core, CRO is about increasing the percentage of website visitors who take a desired action – in this case, booking a room. The formula is simple:
Conversion Rate = (Total Website Bookings / Total Website Visitors) x 100
Why CRO Matters for Hotels
High-Leverage Activity: CRO offers an exceptional return on investment. With relatively low effort, you can see significant gains in direct bookings and revenue.
Maximize Existing Traffic: Instead of spending more on advertising to bring people to your website, CRO helps you make the most of the visitors already coming to your site.
Reduce OTA Dependence: As OTA commissions continue to rise, a strong direct channel becomes increasingly valuable. CRO helps you build this asset.
Introducing Direct Channel Optimization
In the world of hospitality, every detail matters.
From the warmth of your welcome to the comfort of your rooms, excellence is the goal.
But what about your digital presence?
Is your website delivering an experience that truly represents your property?
Enter Conversion Rate Optimization (CRO) – the key to ensuring your online presence is as impressive as your physical one.
The digital hotel experience.
CRO isn't just about numbers; it's about curating an online journey that reflects your brand's essence.
It's the art of transforming your website into a digital concierge, guiding potential guests effortlessly toward booking.
Why CRO is Essential for Every Hotel
In an industry where first impressions are crucial.
Your website is often the first thing a guest sees about your property.
A well-crafted site doesn't just increase bookings, it shows your brand.
It's about creating and bringing what your hotel is about, on a digital front.
The Reality of Hotel Websites
Even the most impressive properties often fall short online.
Common issues include:
Websites that prioritize flash over function
Lack of branding.
No connection with the potential guests.
Complicated booking processes.
The power of CRO
Consider this scenario:
Hotel A has 100,000 monthly website visitors
Average Daily Rate: $295
Average Length of Stay: 4 days
Current Conversion Rate: 0.21%
Monthly Revenue: $247,800
Now, let's go to Hotel B:
Hotel B has 100,000 monthly website visitors
Average Daily Rate: $295
Average Length of Stay: 4 days
Current Conversion Rate: 0.42%
Monthly Revenue: $495,600
Same amount of visitors, twice the revenue.
That's an additional $240,800 per month without increasing marketing spend or visitor count.
What This Guide Offers
Insights into the diverse needs of modern travelers
Strategies to craft a website experience that truly represents your property
Techniques for running effective A/B tests
Curated tools that blend analytics with user experience
The goal is for you to get out of this course with all the tools necessary to increase your direct bookings.
Understanding Conversion Rates
Your conversion rate is the main measure of your website's success.
It's the percentage of unique visitors who make a booking.
Here's how to calculate it:
Conversion Rate = (Number of Bookings / Unique Visitors) x 100
This simple number is your north star for your direct channel.
Why Conversion Rates Matter in Hospitality
For high-end hotels, even a small improvement in conversion rate can boost profits significantly.
A slight increase can mean more revenue without spending more on marketing.
It's about making your current website work harder for you. Not about bringing more people to your website.
It's making more with less.
Key Performance Indicators (KPIs)
Conversion rate will be your north star.
However, there are other metrics you should look at to know where you stand.
Bounce Rate: How many visitors leave after seeing only one page. A high bounce rate means your site isn't meeting visitors' expectations.
Average Session Duration: How long guests spend on your site. The longer usually means the more engagement they have.
Click-Through Rate (CTR): How often visitors click your "Book Now" buttons. Low CTR? Your calls-to-action or offerings need work.
Exit Rate: Where visitors tend to leave your site. High exit rate on the payment page? Time to improve your checkout process.
How Does Your Conversion Rate Compare?
Here's a general guide:
Below 0.2%: Needs significant improvement.
0.2-1%: Good start, but room to grow.
1-2%: Strong performance, but don't stop here.
2-3%: Surpassing industry averages.
3%+: Top 1%, keep your website updated and adapt to new demands.
Remember, these are general numbers. Your ideal rate depends on your hotel's unique segment.
Putting It All Together
Understanding these metrics helps you spot where to improve your site.
But knowing isn't enough – you need to act on this information.
Next, we'll look at how to boost these numbers and turn your website into a booking magnet.
We're offering a free audit to anyone that want's to get started on this process.
Just use the Contact Us page and include "CRO Audit" on your message.
FAQs
Is CRO suitable for smaller or independent hotels?
Yes, CRO is about enhancing your unique appeal, regardless of size. However, for it to make sense, you should have at least 1.000 monthly visitors to your website. If you’re not there yet, we would recommend investing in your marketing initiatives to get an influx of visitors.
How can CRO help maintain our brand's image?
CRO isn't about changing your identity; it's about refining how you present it online. We focus on creating an experience that authentically represents your property.
Will implementing CRO require a complete website overhaul?
Not necessarily. Often, it's about making precise, strategic adjustments that significantly enhance the user experience without compromising your existing design. Sometimes, however, it will involve a redesign.
How often should I check these metrics?
For most hotels, weekly is good. Larger hotels might benefit from daily checks.
Do seasons affect my conversion rate?
Yes. Always compare to the same time last year to account for seasonal changes.
Should I try to improve all KPIs at once?
Start with one or two that need the most work. It's a step-by-step process.
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