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Hotels reaping high from direct sales post-covid19 and many are considering it a strategic pillar in their distribution & journey to recovery

Direct selling, both telephone and website, has gained a large share of sales during the pandemic.

This huge increase has meant that many hoteliers have changed their passive or neutral attitudes towards direct sales, considering it a strategic pillar in their distribution.

In this article, I will analyze the reasons for this explosion and why part of this change will be permanent, and what hotels need to do to consolidate it.

Many reasons have led to this situation and each hotel will be able to identify with some but maybe not all of these reasons.

1. Customers are looking for accurate hotel information.

Given the situation of such uncertainty, customers are making an effort to look for information at its source, and what better way to do this than on the hotel’s website

2. More domestic and even local customers.

  • Less need for air travel and, therefore, for packaged sales (the big loser here is Expedia).
  • Greater relevance of the hotel brand and repetition rate, which again greatly facilitates direct sales over intermediated sales.
  • Same language and time zone. As many customers are local, it’s much more convenient to contact the hotel via the website or phone for answers to questions or bookings. And as it’s a local call, it doesn’t cost anything, unlike an international call.

3. Greater agility of online channels to reactivate quickly.

Opening an extranet takes a matter of minutes while reactivating a tour operator, travel agency or even wholesaler always takes much longer, especially for short-term sales.

Reactivating flight operations requires sustained demand over time, something that has not happened until very recently and is still very timid. Staff returning from temporary lay-offs or investments in marketing to stimulate demand are actions that also take time.

For this reason, customers were often only able to book hotels online and, for the most dynamic hotels, moving to direct sales was not a difficult challenge.

4. Internet as an escape route from continuous confinement.

We’ve spent months locked up at home, with very few outings. The internet and mobile devices, in particular, have been our travel companions for long periods.

For many months, the only way to book a trip was online. This has helped many to lose the fear of booking and buying online.

5. Lack of group, MICE and corporate segments.

As we noted earlier, for many hotels there are key segments that are still experiencing tough times. 

This means that all those resources that are normally reserved have been made available for leisure and online as a lifeline. An unintended consequence for other hotels, however, is that they are now competing with these hotels based on price.

6. Loyalty has its rewards.

Those hotels that had identified and nurtured loyal customers were able to lean on them to start their recovery and generate those first few bookings without the need to turn to OTAs.

What could be a better way to return to normality for many customers than to go to a hotel they already know? This again demonstrates the strategic importance of loyalty.

7. Bad experiences with intermediation during the pandemic.

Although there are many different stories out there, it is rare to find someone who has not had serious difficulties managing a non-refundable airline ticket or hotel reservation.

Many hotels disappeared and never responded, but those who turned to their customers and their direct sales made a lot of headway for the reactivation of the sale.

Aware of this situation, Online travel agencies took the unilateral decision to defend “their” customers and convert bookings from non-refundable to flexible, triggering a storm for many hotels and great displeasure with the intermediary that showed its bitter side.

8. Better conditions on websites than OTAs.

Although many hotels, including almost all major hotel companies, already offered better conditions on their direct channel than OTAs.

Those that are maintaining this strategy, combined with an increase in visits to their websites, have had a multiplier effect, achieving great results for direct sales.

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