Online Travel Agencies (OTAs) like Airbnb, VRBO and Booking.com dominate the online vacation rental market. And it is generally advisable to list your vacation rental on more than one OTA. However, an often-overlooked addition to diversifying your sources of bookings via a multichannel distribution strategy, is direct bookings. Adding direct bookings increases bookings and revenue for your vacation rental while providing you with added control over your business.
A direct booking is when a guest books your vacation rental directly with you, without going through an OTA or other third-party intermediary. Most often, a direct booking is made on the vacation rental’s website, but can also involve a booking made over the phone or via email, as well as when a guest walks in to make a reservation. Direct bookings are an important aspect of any vacation rental’s distribution mix and helps improve the business’ overall profitability.
Direct booking offers many advantages that are not available through OTA booking. These include:
Direct booking doesn’t require you to pay a commission to an OTA, saving you from 3-16% fees on Airbnb, for example, or 5-8% on VRBO.
Because direct bookings allow you to diversify the sources of your bookings, you are not completely dependent on OTAs, giving you more independence. You also have the freedom to set your own rules and processes, giving you control over cancellation policies, marketing strategies, etc.
Direct booking is an essential part of a multichannel distribution strategy and makes a complementary rather than disruptive addition to your OTA booking sources while increasing your potential to grow revenue even further.
Because you are showcasing your brand, on your website, on your own terms, it doesn’t have to compete against the other brands listed while operating under the shadow of the OTA brand. You can let your brand be expressed to its fullest potential, from color and design to tone of voice, as well as every aspect of your property, giving guests an all-encompassing view of your offering. This increases awareness and recognition of your property.
When guests book directly with you, they interact with you directly from the time of booking, allowing you to build a better relationship with them, as well as have them recognize your vacation rental by its brand and not as just another Airbnb or VRBO listing. They are also more likely to recommend your vacation rental by name, sending more guests your way, no commissions deducted. Ultimately, direct booking enables you to create your own pool of customers loyal to your vacation rental business rather than an OTA.
Direct bookings allow you to easily collect your guests’ contact details such as email addresses, phone numbers and even home addresses. This allows you to keep in touch with them, adding them to your mailing list, giving them special offers, etc to encourage and incentivize repeat bookings.
Because you save on the commissions deducted by OTAs, you are able to make a higher margin of profit. This allows you to offer direct booking guests a better price while still making a profit.
When guests make bookings with you directly, you become privy to their required information. You also have the opportunity to freely communicate with your guests and are not limited to OTA messaging apps. This allows you to gain a greater understanding of what your guests like and to personalize your offering, leading to great reviews and loyal customers who keep coming back.
Adding direct bookings to your channel mix gives you a revenue stream to fall back on in case you ever encounter an issue with your OTA listing. For example, a number of hosts were able to continue earning revenue during the pandemic, despite a wave of cancellations on OTAs, due to their direct booking business stream.
Offering a price discount alone is insufficient to steer guests away from reputed OTAs and to book directly through you. To generate significant direct bookings, you must make sure to offer guests a booking experience that is easier, more credible and more secure while assuring better accessibility.
According to a report from Hubspot, 38% of people will stop engaging with a website if the content or layout is unattractive. Create a well-designed, picture website that is user friendly, loads fast and reflects your vacation rental brand in all its glory. If your website is only so-so in terms of design or usability, not only may potential guests stop engaging altogether but judge your vacation rental by the association, no matter how amazing it may truly be. With many users now searching for and even booking their stays through their smartphones and tablets, it is important that your website is mobile responsive so they can experience the full design and functionality. Also make sure your website domain is HTTPS and SSL encrypted so your guests are assured of a secure booking experience.
(Check out our guide to building a fantastic vacation rental website here.)
Equip your website with a booking engine that is secure, easy to use and only takes a few steps. This allows your guests to book and make payments directly through your website, and receive automatic booking confirmation. Make sure the online direct booking engine you use does not require a commission and will integrate with the property management system you will be using. Or pick a property management system like Hostaway that comes equipped with a booking engine. Don’t forget to take into account government regulations such as the GDPR (General Data Protection Regulation, EU) and SCA (Strong Customer Authentication, EU).
Make sure your website is optimized for SEO so it is easy to find and ranks high on Google search results and is therefore much more likely to be found by guests searching for a vacation rental. This involves incorporating the right keywords in your copy, including verified backlinks and updating your content regularly. Hosting your own blog on your website also helps improve your SEO while making you look like an expert. You can write about the area your vacation rental is located, local cuisine, activities possible, events, etc.
Because direct bookings don’t cost you an OTA fee, you can afford to offer guests who opt to book directly a discounted nightly rate while still making a higher profit than if they booked through an OTA. Price is a great motivator and will incentivize guests to book directly. You can also offer them added value for booking directly, like complimentary drinks, flexible check-ins, late check-outs, discount vouchers to a nearby pub, etc.
Social media is an important avenue for growing your brand and converting users to guests. Use professional photographs, write enticing descriptions and give users a sense of the amazing experience they can have staying at your vacation rental. Facebook, Instagram and Pinterest are all great platforms for you to use. Try to use at least two if not all three platforms. Engage with your users directly, replying to their questions and thanking them for their comments. And don’t forget to link back to your website where users can book directly. Check out our guide to social media marketing for detailed information.
You don’t have to be a hotel chain to offer a loyalty program. Even a single property rental can offer one. This encourages repeat business by incentivizing guests, including those who came to you through an OTA to return and book directly when doing so. You can offer perks like a complimentary meal or discounts based on guests’ previous spend and/or length of stay.
There are always going to be visitors who find your website and may be even begin the booking process who drop off before completing the process. But just because you were not able to convert them to a paying guest the first time round does not mean you can’t later. You can use tactics of remarketing, which is when you re-engage visitors who were about to convert to a customer. You can do this by adding a special code to your website which allows you to track such visitors and present them with personalized online ads in order to bring them back.
Encourage your guests to review your vacation rental on your website. Reviews act like a digital word of mouth. And people are far more likely to trust another person who has experienced what your vacation rental offers . In fact, most people give a lot of weight to reviews when deciding where to book.
People like booking through OTAs not just for the variety of listings they offer but also the convenience. In addition to including a user-friendly booking engine on your website, make sure your contact details are accurate and displayed prominently. Give guests options on contacting you, from email and phone calls to text messaging. And make sure you reply to all queries in a timely fashion. The longer you keep a guest waiting, the more time they have to reconsider direct booking with you and move on to another listing.
In-property branding allows you to create a stronger relationship with your guests, no matter the channel through which they reached you. Display your brand tastefully. Market to your guests directly during the arrival process but in a way that does not put them off. Consider using a digital interface like a YourWelcome tablet that allows you to promote your property and the benefits of booking directly while offering guests value such as an introduction to the history of the area or a map of activities they can engage in.
Having your own database of guests and potential guests details you can market to is a valuable asset in increasing direct bookings. Once you start getting direct bookings, you can capture both paying and non-paying guests’ details such as e-mail addresses and preferences. This allows you to offer a more personalized stay when they return, making it even more likely they will return again. You can also collect email addresses by asking visitors to your websites to sign up to be informed of promotions and special offers. Now you can directly engage with an audience that has already shown interest in your business and start increasing your direct bookings.
The biggest risk you run in using a multichannel strategy is double-booking. No guest wants to hear they lost their booking because of an error you made. You are likely to lose the guest altogether or have to cough up some freebies to make up for it, affecting your profit margin. A software like Hostaway will help you make sure you never double book, but also so much more. In addition to bookings, with Hostaway you can also manage your communications, property maintenance tasks, invoicing, payments and so much more. It even includes a booking engine! You are also privy to a marketplace of over 100 integrated software partners. These include OTAs like Airbnb and VRBO, payment platforms like Stripe and Braintree and messaging platforms like Slack and Whatsapp.