The #1 focus of hoteliers and revenue managers is increasing RevPAR.
How when about 65% of all hotel bookings are made online and 55% of bookings are made through OTAs with a hefty commission? Plus, hotels convert just 2% of website visitors into bookings, meaning roughly 50 visitors are needed to produce a single reservation. And of those who actually reach the booking engine, 81.7% abandon before completing.
Most visitors never reach the checkout and most of those who do still leave. Marketing can always help drive more visitors to the site but with a 50:1 ratio, especially on a cost-per-click basis, it can quickly add up to an expensive consequence to these two unsolved problems. The better solution is to fix the conversion rates and flip the lookers to the bookers.
Understanding the High-Intent Visitor
The starting point isn’t necessarily about attracting new visitors, but understanding who’s already on the site and why they stay or leave. Not every website visitor will be at the same place in their journey. Some are just getting ideas, some already have flights booked, others could be at the point of comparing rates. Distinguishing between each of these guest types is important. Research in the International Journal of Hospitality Management showed that there was a 400% discrepancy between conversion rates in a high- and low-season of an Italian boutique hotel. Interestingly enough, the low-season had a higher conversion rate of 3.41% with the high-season CR being under 1%. With low-season shoppers, they were more likely to be sure they wanted to travel to the region or hotel and there was less intense competition with neighboring properties. The website visitors in this case, weren’t the most obvious targets to capture the traffic, but the most valuable in the long run.
From how far in advance people are searching, whether they’re looking for a specific room configuration, or how many times they’ve visited the booking engine are all observable behaviors by a high-intent visitor. These travelers have already decided they want to stay somewhere. They’re just deciding whether that hotel is yours.
Why Travelers Abandon Before Booking
What’s actually stopping them from booking after they’re showing signs of intent? After a website visitor shows that they’re interested in the property, and they decide not to book, there is likely something in the experience that detracts from their interest, making them uncertain enough to leave and book elsewhere, whether it’s with another hotel or on a different channel.
OTAs are essential for hotels to thrive, especially for smaller hotels who can be placed next to larger properties on an equal playing field. However, if the offer is compelling or the rates are cheaper on the third-party site, it’s a no-brainer to book through them. Even if they were originally discovered through alternative sources, 37% of lookers will abandon their cart due to high prices and the desire to compare prices. When there are lots of fees stacked on top of the daily rate, 53% leave the site after seeing the price. A lack of transparency, especially when it comes to the cost, can result in a decrease in trust.
Even when the rate is right, the booking process itself can undo the decision:
A complicated path to checkout – When someone enters the site, is exploring the amenities, they want to see the cost so they click to see rates. Whether it’s asking for personal information, requiring numerous actions, or an unclear way to get to the booking engine, you get more and more likely to have people exit the page. The fewer the decisions or actions between intent to book and the booking confirmation, the better.
A poor mobile experience – Between 30-40% of all bookings for online travel are completed on mobile devices. If the buttons are difficult to tap or tricky to find, a pop-up blocks navigation, or the website/booking engine wasn’t built for small screens, a significant portion of high-intent visitors won’t be able to complete the booking process or will become frustrated.
An unfamiliar booking engine – When “Book Now” redirects to a page that looks nothing like the hotel’s own site, the trust built during the visit disappears instantly. Using consistent branding isn’t a stylistic preference but shows the potential traveler that they should be confident in the hotel’s competency, impacting conversion rates.
Fixing the process removes the barriers, but the next step is giving visitors a reason to commit.
Direct Booking Value Proposition
The starting point at many booking journeys are rates. If a guest has already seen your property on an OTA or through a third-party sale, they already arrive on your site with a number in mind. If your direct rate is higher than their first touchpoint, they’ll go right back to where they started. Rate parity is equal amounts of revenue management and marketing. Once there’s a great price in place, equally competitive and fair, every dollar that is flipped from an OTA commission paid, can be redirected toward the guest.
What makes a trip special is not just where you stay, but the experience as well. Not only will a bottle of wine with an early check-in give the guests something extra to talk about, but it can greatly improve their experience with little cost. A more flexible cancellation policy, breakfast credit, room upgrade costs a fraction of a 15-35% commission rate from an OTA, and gives the guest a much more concrete reason to book direct.
However, the value proposition only works if the guest actually gets to the point of comparing rates or properties. Again, it’s possible they weren’t interested, or maybe they got distracted, wanted to think about it, etc. But these website visitors aren’t necessarily lost, they just need to be reached again. They could just be browsing or they’re about to book the hotel next-door, which is where the next phase of the strategy comes into play.
Staying in the Conversation After the Visit
The guest who just left is still the warmest lead. They didn’t say no, they just didn’t say yes quite yet. OTAs are already re-engaging them across search and social within hours of that visit. However, in 2024, the top four online travel agency sites spent $17.8 billion in marketing alone. In the same year, Expedia spent 54% of its revenue on sales and advertising. Hotels are generally spending about 2.5% of their revenue on marketing, so it’s time to get a little more creative in order to be competitive. The answer isn’t to outspend them but to be present at the right moments, on the right channels.
Google Search and Display Retargeting
Utilizing the search engine to your advantage is one of the best opportunities a hotel’s marketing team has. This is the channel where people will already be looking in order to search for their trip and they’re likely still active in their search. A well-timed retargeting strategy keeps your property top-of-mind throughout the traveler’s search process and reinforces visibility during the critical consideration window. Plus, the CPC is generally lower for retargeting than it is during display ads on Google.
Metasearch
Metasearch (not affiliated with the social platforms Meta) is an aggregator search engine that pulls rates from OTAs, third-party sites, and the hotel’s direct channel. The metasearch is displayed side by side, right beneath the property listing on the search engine and it’s where booking decisions are frequently made. OTAs like to pay for the top placement in these results, which means a hotel’s direct rate can get pushed to the bottom, even if pricing is in line or better than others. Having competitive rates matters here more than anywhere else. If an OTA has a slightly lower price at this moment, even if it’s by a dollar, guests might default to the more familiar platform rather than booking directly. Showing up in metasearch with a visible and better direct rate is one of the best moves a hotel can make.
Paid Social via Meta
Not every guest is re-engaged while they’re actively searching but that doesn’t mean the window has closed. With the use of Facebook and Instagram, social retargeting can reach people in between their Google searches, and can still be retargeted to rethink their decision. The benefit of Meta is that they can be reached even when they’re not currently looking for travel or planning their trip. They’re using social media sites every day so why not subtly reach them when they’re already there? Retargeting through Meta ads serves your property back to someone who’s already visited the site. The brand is reinforced by showing beautiful photography, amenities, or offers which helps solidify their decision. They could be booking tomorrow, a week or a month from now but keeping your property in mind, can help convert in the long run.
Email Recapture
Lastly, a potential solution to retarget web visitors is through email marketing. Whether it’s a simple reminder that they left something in the cart, there’s a promotion going on, or just a news update, reengaging the guest with new details since they left is incredibly helpful to reach your most likely to book audience. The only challenge with this tactic is that you must already have the guest information, but this can be captured through opt-in forms or previous guest contact information.
Making the Most of Who's Already There
We’ve established that many website traffic solutions can be great at driving new visitors to your site, but they’re not always doing the job of increasing revenue. Boosting the conversion rate is the key to in turn, booking more guests and gaining incremental revenue. The highest value customer could have already visited your website multiple times, but just needs a final push to click “book”. Changing the mindset from getting more visitors to changing what gets in their way, whether its competing rates, an unclear booking process, or they just ended up booking through an OTA. Shift the focus from merely attracting more visitors to identifying and removing obstacles that prevent them from booking directly, such as overly competitive rates, a confusing booking process, or the propensity to use OTAs.
Retargeting should be a priority within any balanced marketing strategy. Email recapture activates your existing database at no additional cost, and retargeting campaigns typically outperform prospecting efforts with more efficient CPCs. These options are accessible for many hotels, whether there are 10 rooms or 1,000. There are dedicated tools built specifically to manage visibility, making it realistic for properties of any size to compete in a channel that OTAs treat as a priority.
The guests are already there. The strategy is making sure they leave with a reservation instead of a new browser tab
