Hosts earn up to 12.5% more from direct bookings, especially from lucrative market segments like digital nomads that tend to book longer stays. But where are the guests coming from and what motivates them to book directly?
Fewer fees, no commission, and a stronger bond with your guests. While hard to find, direct bookings are the holy grail for hosts – giving infinitely more control over margins, outgoings, and guest experiences. But with the rise of third-party booking platforms like AirBnB (and the Google real estate they rightfully earn and purchase), standing out from the crowd requires a bit of manoeuvring. And once they are on your site, guests need ample convincing to book.
Thanks to marketing tools like Speedy, it’s never been easier to convince prospective guests to stay. Over the past two years, there has been an 82% increase in direct bookings, largely driven by uncomplicated communication and more forgiving refund and cancellation policies when dealing directly with the host.
Direct bookings are more profitable
Given the cost savings and future marketing opportunities, it comes as no surprise that direct channels remain a priority for accommodation providers. Hosts not only pay less fees and receive timely pay outs, but have full control to maintain direct relationships with their guests and take advantage of opportunities to upsell, test new revenue streams, and earn return customers.
Saving on commission is a huge upside for hosts, especially given the rising costs of doing business. Third-party booking platforms typically charge between 15% and 25% to recruit and manage bookings. On average, that’s US$15,000 paid in commission on a mid-range location with an annual income potential of US$75,000. And that’s excluding income lost through reimbursements and refunds over which hosts often have little to no control. (any figures to add here from BeachBox?)
All things considered, hosts stand to earn 12.5% more from direct bookings. Financially and strategically, there are no drawbacks to investing in a direct booking strategy.
Swinging the pendulum in favor of direct bookings starts with creating an impressive online footprint with a website at its center. From there, a good mix of channels – marketing, SEO, social media, partnerships – branch out into the world to recruit prospective guests.
Far from competing against third-party booking platforms, there are huge benefits to incorporating these well-trodden websites in your strategy. Listing on sites like AirBnB and Booking.com is free. Research has shown that 50% of people visit direct booking websites after finding it on a third-party booking platform – a phenomenon known as the billboard effect. Hospitality leaders are tapping into the billboard effect to buoy their direct booking ambitions and gain visibility from a global audience.
Turn browsing into booking
So your website is up and running and guests are trickling in. Now what? It’s vital to give guests exactly what they need to tempt them into your booking funnel – ever closer to the BOOK NOW button. But if information is hard to find, the opportunity is wasted. It begs the question – what do guests want?
A recent consumer survey by AirBnB found that amenities like Wi-Fi and free parking are a top priority for 97% of travelers. For lucrative market segments like digital nomads – successful professionals that travel and work remotely full time – proven fast and reliable Wi-Fi trumps everything. But finding qualified information about proven Wi-Fi performance remains surprisingly tricky. Especially given how little formal protection guests have from poor internet performance.
Get up to Speedy
For the first time ever, Speedy shows prospective guests exactly how the Wi-Fi behaves at their next destination – empowering remote workers to make informed decisions about whether the internet is good enough to support their work needs.
The world-first Wi-Fi verification platform tracks internet performance via a device plugged in on site. The data comes to life in a handy widget embedded on the listing with a real-time Wi-Fi speed and reliability – giving full transparency into actual internet performance.
Speedy tracks and diagnosis outages and alerts property managers as soon as an internet connection drops. The platform enables property managers to mobilize world-class Wi-Fi experiences and save thousands on refunds. Speedy keeps guests connected, happy, and coming back for more.
For more information about Speedy and our partnership opportunities, head to GetSpeedy.io or connect with us on LinkedIn and Instagram. We’d love to hear from you.