An acquisition channel that costs a maximum of $395 per year - how often do we hear about one of those?
This week, we spoke to Jordan Mckay of Check In Canada about the white-label software allowing destination marketing organizations (DMOs) to facilitate direct bookings at local hotels. According to Jordan, Check In Canada is one of the only examples of a country coming together as a whole to work collaboratively on providing an alternative to high-cost third-party channels. With a commission rate on conversions as low as 3%, the programme could be an exciting blueprint for alternative acquisition channels for hoteliers worldwide.
How does it work?
"Check In Canada is primarily a white-label tool that allows destination marketing websites, for example Explore Edmonton, to pull live rates and availability from local hotels, allowing visitors to book directly at those properties," Jordan explains.
"Our number-one goal is to drive direct bookings to Canadian hotels for as low a price as possible."
The programme leverages the brand power of DMOs to surface rooms and rates to qualified searchers, who are arguably well on the way to deciding where they want to travel to. Check In Canada allows a destination marketing website to add a 'Book Hotel Now' search field to their homepage, which users can then use to input dates and browse hotels.
The results page looks fairly metasearch-y in nature, pulling in rates, availability, reviews, and information about the property. Once the user selects a hotel, they are redirected from the destination marketing website to the hotel's booking engine, where they can complete the booking. Check In Canada also provides a low-cost online reservation system to hotels who do not have their own.
Who do they work with?
"In terms of providing the white-label software, we work with both destination marketing organizations and with provincial marketing organizations, like Travel Alberta and Ontario Tourism Marketing Partnership," Jordan tells us. "We then contract directly with hotels and accommodation providers in those regions."
It's easy to see why properties as diverse as small B&Bs to Hiltons, Fairmonts and Travelodges are listing with the programme; with an annual fee of $195 dollars and a maximum pay-per-click spend of $200 (regardless of number of clicks), Check In Canada's price tag pales in comparison to the average hotelier's advertising investment. Jordan is keen to point out, too, that any revenue from commissions goes directly back to not-for-profit industry associations.
"We're not trying to 'take over' the OTAs here," she explains. "Our main focus is recapturing some of that lost revenue and lost profitability that hotels are experiencing.
"Our mission and the values we put forward to hotels are always really well received. The one challenge we run into with hotels is simply the lack of knowledge around the cost of OTA distribution and the importance of rate parity."
Rate parity and direct bookings
Understanding of rate parity varies widely across the globe, with many hoteliers still unaware of both the scale of rate undercutting their properties experience and the impact that undercut rate has on their website conversion. We recently revealed that those properties being undercut between 0-10% of the time converted users at a 34% higher rate than those being undercut 30-40% of the time. Wherever your rates are being displayed, be that on your website or via another channel, they need to be in parity with the rates on OTAs. It's proven that guests shop around and book where it is cheapest.
As for the importance of direct bookings in general, the industry as a whole has clearly been well aware of it for a number of years - but hotel brands and groups can still struggle to identify the action that could turn the tide. Many of the groups we've spoken to have pointed to the proliferation of data they're inundated with by different systems as a blocker to taking meaningful action. The hospitality industry has long struggled with siloed systems and the compartmented thinking they engender; the true cost of a distribution channel can be obscured by those costs sitting in different 'buckets'. It can be difficult to see the causation between related events - such as an increase in PPC ad spend alongside increased revenue from an OTA.
The value to hotels
At the Direct Booking Summit: Americas in 2017, Kalibri Labs's Cindy Estis Green spoke of the importance of knowing the exact cost to the hotel or hotel group of each booking they receive:
"We have to know more than those that are bringing us the business. You have to know how much business is out there; you have to make a conscious decision about capping your [OTA] business at a certain amount."
Cindy Estis Green on deciding the optimal business mix for your hotel
The attractiveness of OTAs lies in their ability to bring incremental business to a property without the marketing heft to reach those guests otherwise. The channel becomes a burden when it is capturing bookings that the hotel group could reach themselves. Programmes such as Check In Canada could, like metasearch engines, be a valuable way of achieving those incremental bookings while allowing the hotel group to 'own' the guest from the off.
Of course, a Canadian regional marketing site does not have the reach of Booking.com or Expedia. Nevertheless, though, these are platforms doing their own brand building and attracting qualified traffic; if a hotel can take advantage of that traffic through a relatively low-cost system such as Check In Canada, it seems worth a try.
We'd be interested to hear of similar association-run metasearches or booking platforms - get in touch at firstname.lastname@example.org if you'd like to contribute!
Want to keep up with Triptease content? Sign up for our newsletter and we'll send your our best direct booking tips fresh to your inbox every week.