GTMC 2016: hotels – direct booking challenges & the rise of user reviews

Research by Audiencenet shows that despite business travellers being conservative in their hotel choices, TMCs and buyers must tackle a strong preference for direct bookings.

The study, which polled more than 1,000 frequent business travellers (who take at least six trips a year), was commissioned by HRS and the GTMC and revealed during the GTMC’s annual conference at the Marriott Marco Island Resort in Florida.

It found that travellers remain fairly traditional in their accommodation choices: 75 per cent prefer chain hotels, and even in the 18-29 age bracket this figure is 70 per cent. And only 4 per cent of these younger travellers said they preferred home-share websites such as Airbnb.

But while 73 per cent said their organisation has an accommodation booking policy in place, of these 45 per cent said booking directly with the hotel was a permitted booking method in their policy, and 29 per cent are allowed to use generic travel websites – these methods ranked higher than booking with TMCs (27 per cent) or corporate online booking tools (24 per cent). When those with policies in place were asked which booking methods they prefer, 39 per cent said direct, while 19 per cent said with their TMC.

Audiencenet research director Ben Fowler highlighted a finding showing that user reviews have overtaken hotel star ratings as a key factor in deciding where to stay – 33 per cent of travellers cited user ratings as a ‘very important’ factor, compared to 31 per cent citing a hotel’s star category. The top factor for travellers was location (71 per cent), followed by price at 55 per cent and ease of booking (53 per cent), safety (49 per cent) and hotel facilities (47 per cent).

Fowler also noted that ‘personalisation’ was often cited when travellers were asked how their trips could be improved. Examples given included staff having the customer’s profile in advance, so they can greet by name, and room music added from a guest’s Spotify profile.

Wifi and loyalty issues

When it comes to a hotel’s facilities, complimentary wifi topped travellers’ priorities, with 96 per cent saying it was important. Marriott vice-president Marian McLean defended the group’s hotel wifi charges – and its controversial move to offer free wifi to those booking directly.

She acknowledged the importance of the company’s 36 per cent of sales that are via intermediaries, and said direct marketing efforts are “not in lieu” of the TMC community. But she said: “We have to get the right balance. We need to protect our most loyal customers and fortify our direct channels.”

She added. “We did a great job creating loyalty with the baby boomers. The challenge now is creating that same loyalty with Generation Y.” McLean said key member and direct booking benefits were a result of research that found 53 per cent of Millienials booking Marriott rooms via online search websites never visited Marriott.com, and had misperceptions about the website and believed reward points offered low value.

Payment problems

The study also found 50 per cent of travellers were paying for accommodation using their own money and claiming the expense, and 45 per cent using a company credit card. HRS UK managing director Jon West said this raised the issue of the cost to companies of processing expenses. Corporate use of virtual cards can take major costs out of the expense management process and if finance departments were more involved in buying accommodation, “they would be shocked to find” that inefficient payment and expense processes can add up to 50 per cent to the average cost of a hotel room.

Baxter Hoare MD Adam White flagged up the issue of the billback system for hotel payments – where invoices for individual hotel bills are sent to the TMC and presented to the client as a regular consolidated invoice, an area of concern for several of the TMC delegates. “Too many hotels, particularly in the Middle East, are still mucking around with billbacks,” said White. “It’s a very expensive process for TMCs. We need to work together to improve the process a great deal.”

He said the GTMC’s hotel strategy group is currently working with suppliers to find ways of streamlining and taking costs out of the payment system.

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About RezNext

RezNext is the world’s only true Real-Time Distribution Management Solution provider. It empowers hotels to adopt a distribution strategy that simplifies the complex global distribution environment and makes it understandable and manageable. It is integrated with revenue management, operating intelligence and powered with reputation management insights. RezNext’s portfolio of offerings include Rate & Channel Manager, Revenue Management, Online Reputation Management, Website Designing and Web Booking Engine, Mobile solutions, Central Reservation System, Business Intelligence, Property Management System (PMS) two-way connect, GDS and OTA Interface and Loyalty & Feedback Management. Our growing range of solutions can be access by hospitality properties across market segment and size, such as independent hotels, chain hotels, business hotels, resorts, clubs, service and limited service apartments, spas, restaurants and others.
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