It's no secret how the hotel industry feels about OTA's and their obscene fees, as well as how they seem to be out-muscling the hotel industry in marketing and advertising to their customer segments. I have spoken about how the OTA companies have slowly become travelers' favorite travel brands, and how I think that the OTA's are also pushing the hotel industry into becoming a completely commoditized business segment. What I mean by this, is that your customers are only seeing your business as purely a commodity offering, i.e. a bed or a room.
What once started off over 15 years ago as a simple and innocent flirtation with your customers, which at the time may have involved 3 to 5% of your hotel occupancy, has now blossomed into 15 to 50% or more on our weekly business for a good majority of the hotel industry. Very few hotel businesses have been able to resist these OTA seductive ways. I see these OTA companies as sirens leading your company into the rocky shores of disaster and stealing your brand relevance.
"You can't buy your customer's loyalty. You only end up renting them when you compete on price."
Brett Patten 2014
The hotel industry has to take responsibility for these types of business relationships. They obviously didn't take these guys very seriously or as a threat to steal their customers away from them. But the fact remains these OTA's have a significant amount of leverage in the business relationship when it comes to their customers and the top line performance. Obviously the OTA's also have an impact on occupancy, but most of the time it's very much at the expense of ADR growth and other key aspects of their business.
Don't even get me started on the negative impact this relationship has had on the hospitality industry's ability to generate or maintain decent customer loyalty percentages, or the lack of integrity around the reviews and rating processes. It just reaffirms that these OTA companies do not care about the hotel industry, but rather better positioning themselves to sell more advertisement at the hotel industry's expense. That's right folks the gloves are off!
So what do we do, short of calling for a worldwide boycott on OTA companies? Well, I think there is a way to turn these situations and circumstances to the industry's advantage and win back your customer's loyalty. Let's start using these OTA's towards your advantage by utilizing a better business strategy approach for achieving a better results.
All buying experiences are emotional, and all selling experiences are logical
You're going to want to approach this in a manner that allows your business to see the win – win possibilities in this business relationship, rather than one of frustration or feeling like a victim to these OTA companies and the customers that use them. Let's turn the tables in this business relationship by competing on the total customer experience, not just the commodity and monetary aspects of your business.
The goal is to move OTA users from a transactional and monetary mindset to more of an emotional connection with your business, i.e., moving them from head to heart in a manner of speaking, out of an analytical or overly logical booking and hotel selection process. You want to find the win-win opportunities and possibilities in these relationships first and foremost. For this to be achieved it's going to be vital in having the right organizational perspective and a high level of operational engagement in place around this business strategy approach. That will allow your business to gain momentum towards its ultimate success in properly connecting with your customers.
Direct hotel booking strategies
The first thing to consider is creating a direct booking experience with all the bells and whistles that showcases the total customer experience of the business. You want to impact these guests in a very emotional way that generates memorable. Memorable generates customer loyalty, and customer loyalty generates financial performance, where the value comes from how you made them feel about themselves from your hotel experience. You want to move these customers from a monetary buy-in with the OTA to more of an emotional buy-in with your brand experience.
Tag and identify these guests so that everyone in your organization knows who they are and is coached up on the expectations you want to deliver and the emotions you want to invoke during their stay. Maybe consider using a different colored room key, or putting them in a certain part of your hotel. Offer them a certain continental breakfast in which one of the managers is hosting it. Then consider the guest journey touching points for setting up opportunities for moments of truth, that generating a connection with these customers. It's not going to be just about the freebies or points earned that's ultimately going to make the difference in their level of preference or loyalty, but more so in how you build up the experiential value that adds real quality and value to their life. That's what will be the difference maker in creating a sustainable commitment toward your brand.
You'll have to differentiate yourself in a way that breaks that transactional booking mindset, and also differentiate yourself from the competition in how your business goes about building experiential capital of the hotel stay. Where it would become very difficult for your guest to consider defecting from your hospitality experience, because of better pricing offers or a free amenity upgrade. It's all about elevating the level of trust, confidence and certainty factors in the customer relationship, that really need to be targeted and measured in the loyalty initiatives.
Creating an OTA guest experience stay
To make that happen, you have to consider establishing an OTA guest experience stay by creating a comparison of someone who's not a member, compared to someone who's a valued and loyal guest of the business. Almost frame it like having a really good friend who always has your back, but create a comparison of scarcity versus abundance. Play to their emotional needs and wants: what they're missing by not being in a committed relationship with your business. You want to create a buying experience, not a selling experience when it comes to creating customer loyalty initiatives.
That's where I think a lot of these initiatives go off the tracks. They try selling with logical and transactional elements like free amenities, services and points, instead of enrolling them in the total customer experience of your business. It's more about creating a sense that they're missing out on something really impactful to their life, that adds true value. Otherwise you're just doing what everyone else is doing or will eventually do, by offering them free stuff, points and a deal. But when you strategically design your customer loyalty initiatives on the total customer experience, it becomes very difficult to procure and duplicate this offering by your competitors. You have created a true competitive advantage, in transforming these OTA relationships.
Basically showcase life as a loyal brand customer to your business, i.e. membership has their benefits. You will have to have the ability to identify, target and manage these OTA customers coming into your business. You're spending a premium to have these guest in-house. They are in a sense your most expensive customer. So don't play for their usage or wallet. In the short-term, instead, play for their long-term loyalty and anticipate their arrival as well as their departure. Make sure you're handling all the expectations and touching points that would need to be managed to generate a valued and memorable experience with your business.
Provide what the OTA's can't provide, a deeply impactful guest experience that adds tangible value to their life that goes beyond just a relationship that's built on monetary aspects. A good way to do this is to track if they are first-time visitors to your hotel. If that's the case, consider upgrading them into one of your loyalty/direct booking packages, to give them a taste of the good life, but make sure you have the ability to track their usage. Basically why should they commit to you, if they can get the milk for free. Creating a different upgrade strategy is a good way to truly engage these OTA bookings in your total customer experience. Because by doing so, you create an emotional connection with them. By giving them value from the get-go, you're also putting yourself in a position to manage the expectations around the upgrade experience. Basically, you're in a position of leverage for achieving loyalty.
Create opportunities on a more personal and emotional level that show you really care about your customers and you're committed to providing them the best possible hotel experience. When you identify these customers coming into your business, you could create a little packet of simple information that identifies or showcases the benefits and values of being a direct booking customer to your business. That's presented to the guest during check-in or even during their stay, or the checkout process, whichever is the best fit for your hotel environment.
I think it's safe to say that we've all experienced that moment as a customer where a business earned our outright loyalty, and I guarantee you when this took place, either consciously or subconsciously, it was from the total experience meeting all our expectations, needs and wants, as well as their ability to make you feel good about your decision to do business with them. This is a very important point. You have to feel like a winner first, before you make that business one of your favorite teams. This is probably why your customers are sleeping around on you because you keep trying to make them feel good about your business first, i.e. brand equity position, before they feel good about themselves from the experience of your business, i.e. experiential value.
You don't want to be in competition with your competitors, that would just benefit the customer position and having them play you against each other, and I would imagine you don't want to keep giving up large percentages of your business to the OTA companies. So with that said start competing for your customers loyalty, and I think there is a good chance they'll stop sleeping around on you.
About the author
Brett Patten is approaching 35 years in the hospitality industry where he has spent those years accumulating invaluable experience in a variety of leadership positions, and business enterprises, to recently completing his education as an executive leadership and engagement coach in the area of customer experience design.
Brett's unique management and business approach consistently transformed hospitality enterprises with sustainable growth results from his days with the prestigious four and five-star hotels like Stouffers hotels, Pan Pacific Hotels, and Le Meridien hotels, as well as working with prestigious five-star club resort enterprises like Longboat Key and Greenbrier to the launching of a nationally award-winning four-star hospitality brand in 2007.
From there, he built a hospitality business strategy platform that he developed and trademarked out of his commitment for achieving customer experience excellence. Brett then turned this business strategy platform into a company called "Five-Star Customer Experience Design." Today, after spending the last 15 years researching, studying and developing customer experience design strategies for the hospitality and tourism industries, he engages with some of the top hotel brands and hospitality groups both nationally and internationally in the industry.
He has created a new customer experience design coaching service out of his Hospitality Brilliance Program. It is designed to give guidance and support to the hospitality industry leadership and management in introducing and establishing customer experience business strategies and experience management systems into their enterprise in a very approachable and manageable way.
