According to Kalibri Labs' analysis, bookings via official hotel websites are showing 9% higher profitability than bookings made through OTAs.
Launching in 2011, Kalibri Labs is a major US-based data firm, which monitors everything from bookings and revenue to customer acquisition. After observing the big brand hotels announcing their direct booking campaigns, the switch in data must have been as exciting for Kalibri as it was for us at Triptease.
After exploring the figures, it's no doubt that the findings are promising for hotels thinking about driving direct bookings. Based on Kalibri's analysis, it concluded that hotel profitability would be up by as much as 9% - and even by as much as 18% when taking into account ancillary revenue! The statistics speak volumes and it's clear that the hotel industry as a whole could really benefit from employing more direct business.
In regard to customer acquisition, costs either stay the same or increase (should commission fees rise) with OTA consumers, but may decrease with those who book via direct channels. The reduction is thanks to lower marketing costs, which have in turn successfully increased loyalty with guests through campaigns like Hilton's "Stop Clicking Around" advertisement.
What's more, OTAs often rely on the "Billboard Effect" phenomenon, stating that their online advertising directs potential guests to book via the source hotel website. This June the AH&LA Consumer Innovation Forum will see this researched in further detail, but the 2015 study contests it, confirming that there is only a 7% chance that consumers would return to the official hotel website after visiting an OTA page.
Overall, although it is important hotels and OTAs have a healthy relationship, hotels should equally consider pushing their direct bookings. Kalibri Labs suggests that a balance between both direct and indirect business will result in higher profitability and stronger guest engagement and satisfaction.