The #BookDirect movement is alive and kicking but constantly oppressed by OTA and large platform search dominance. Nearly all accommodation sectors have similar issues, except those that are not as technically aligned yet (individual caravans, canal boats etc.), which are moving more to e-commerce and mass distribution but are not quite there yet but will see the same challenges.
The short-term rental sector is aligned with hotels' displeasure at the e-comms approach to commission generation, guest control and marketing directions. With hotels, Book Direct gets a lot of airplay but little impact on the market as the likes of Booking.com dominate. Short-term and vacation rentals have been the target to convert into a money tube, but it has taken longer than anticipated. With the industry becoming tech-centric and overcrowded, the terms of engagement weaken, and OTAs benefit from more significant guest interaction over choice and volume.
The question is: Is it worth the effort? You will need Google, and Google is not your friend! You probably use Airbnb too, and they aren't your friend either, nor are Booking, any OTA or social media channels. You are one of 10 million+, which is not worse odds than winning the lottery jackpot but well on the way! Our answer is toward the bottom of the page.
The Search Wildnerness?
In 2014, I wrote an article that went viral on Tnooz and then Phocuswire, primarily before social media took off with such vehemence. It was called "Open Letter to Google, a Cry from the Search Wilderness."
This letter was born of frustration with Google as it headed to increase its returns through paid advertising. Two quotes from this are as accurate today as ever, and despite the endless advice on applying all your efforts to Book Direct as a means of de-risking, for the most part, the advice and amount of work needed to make headway is a step too far for the majority.
I have absolutely no doubt that many people who read this will say, that this is life, the big boys will always squeeze the life out of the small guys. Well it’s true of course, and Google also does this by auctioning limited space.
If Google's mission is still as quoted "to organise the world's information and make it universally accessible and useful" then is it still failing, with an endless presentation of heavily SEO'd content rich and largely irrelevant sites.
Google's ad income is substantial and needs it to continue. OTAs are big partners.
The spend by major OTAs on Google in 2022 is $billions (from Phocuswire). Across the four brands, spending on marketing (reported by Airbnb and Expedia Group as both sales and marketing) was just over $14 billion for the year – that spent in 2019 by about $500 million. The bulk of that spending came from Expedia Group and Booking Holdings, with the two companies disbursing $6.1 billion and $6 billion, respectively, in 2022. Airbnb – which dramatically cut marketing spending in 2020 – has ramped it back up as revenues have increased. Airbnb spent $1.5 billion in 2022, up from $1.2 billion the year before. But as a percentage of revenue, marketing dropped from 20% to 18%, the lowest among the four OTAs analyzed. Airbnb quotes, “Ninety per cent of our traffic is now direct.
Meanwhile, Trip.com reduced its marketing spending in 2022, going from $772 million in 2021 to $616 million last year. As a percentage of revenue, the China-based company’s marketing spending dropped from 25% in 2021 to 21% in 2022.
We believe that 8-10% of all Google Ad revenue comes from the OTAs in travel. This is not a space that can be ignored; accommodation is one of the key foundation stones of travel.
The big shall inherit search: I have recently been helping homeowners look at their options for renting out their homes. Having been saturated in rentals for 20 years, in management and tech, two approaches made sense:-
a) DIY: start with OTAs: build a website, and invest time and effort to create a platform for referrals and direct guest interaction, especially personal referrals, "guests in the know" who are researching prices, engage with social media and focus on returning guests and their networks. But aim to get good organic listings on Google. You will know the steps: Interiors, amenities, photos, copy, maybe a PMS, dynamic pricing, distribution, T&Cs, guest apps etc. Easy eh?
b) Use a manager and hand off a commission and, to a degree, control.
It is very apparent where the low-hanging is:
Use Airbnb and maybe others, and do little else as it's too complex (and time-consuming) to start from scratch and become educated. There is a reason Airbnb has 6m accounts and 10m+ properties.
Or: -Employ a manager who will remove all these headaches.
Both approaches illustrate the costs and challenges. The first is possibly cheaper but hard miles, and the second means being at the mercy of a manager, who may or may not perform and will take money for the service. Managers are more likely to use PPC on Google due to scale; an individual owner is much less likely, and managers will, if competent, build an organic local brand and see good organic positioning. Managers like OTAs are more likely to find their way into that all-important first page and top slot listing on search.
Google focuses on ad spending as it's their bread and butter. OTAs spend big on Google, and managers need owners and guests. They are as likely to use a mixed marketing approach with Google ads and OTAs. It seems all roads lead to Google (don't forget the Chrome browser too).
Is Google losing its ad power in accommodation and travel? If so, is this due to their largest customers' focus on apps, reducing paid ad dependency on search, and spreading their marketing muscle and money across a more comprehensive media audience? Bearing in mind that in 2022, Google saw 8.5bn searches per day, this could be a lot of money if there are significant drops in one market sector.
According to Booking.com, 40% of bookings were made via the app, and in the first quarter of 2022, 60% of total room nights came from mobile bookings, mainly through the app, which currently has more than 100 million monthly active users. If this is an indication of the trend of pocket access and booking, then Google has issues (despite Android) with all companies pushing harder to go direct via your mobile. It won't change the total search numbers substantially, but in the rental market, we are concerned with, it has a financial challenge Google needs to address.
App Stats
They are substantial and growing.
Google still has 90% of all searches and contributed a hefty amount (circa 80%) to its 283bn$ revenue. However, we now have AI on the horizon as a challenge to standard search, and Bing is making a big thing out of this, with its investment in GPT and Google's Bard still not performing well. Google search, along with much of the internet, has significantly matured and been commercialized over the years, which might make it feel less 'wild' or unregulated.
Some of these feelings may also stem from nostalgia for a smaller, less mature internet.
Does this mean the OTA super-spenders, who now focus on Phone Apps, will see Google become more focussed on the smaller OTA supply businesses, such as Vacation Rental managers?
Target the OTA suppliers.
If Google is losing out to apps, further down the family tree are the suppliers who have the technology, have marketing staff and are keen to use multichannel marketing opportunities. Is Google more attentive to these? We have heard for years Google's "EAT" approach (Expertise, Authenticity and Trust), and managers are potentially more likely to connect and convert bookings than individual owners. We also have Google Travel for Vacation Rentals, and the eco-system is rapidly evolving and, to a large degree, becoming more confusing.
Paid and organic research.
We did a little research to see how the local competition was doing. We searched, on Google, for "Holiday Cottages in the Cotswolds " using an anonymous browser and a cleared cache.
These were the results, two supermanagers, Sykes Cottages and Cottages.com (Awaze) and StayCotswold, a local manager—only Booking.com is spending enough on this search or its various term combinations.
A little further down the page are what appear to be the individual local listings with star rankings attached to them.
The obvious takeaway is that these will link to a page where you can see the property and perhaps book directly.
Again confusion sets in, and like all e-commerce businesses, the tendency is to push toward established brands with trust or those with apparent substantial size and web flows that reinforce professionalism. These properties end up being promoted by managers.
Also, note the "Find results" above the map.
Large managers also provide the properties and prices, and the weblinks follow onto a price check page from the "View Details."
The weblink sends you to the manager's website if pricing or availability is not accessible.
CLICK > to see the 40 companies listed on our search page. The first of two private companies is at position 34. - * = Paid advert at page top.
1.https://www.sykescottages.co.uk* Manager
2.https://www.cottages.com* Manager
3.https://www.booking.com* OTA
4.https://www.staycotswold.com* Manager
5.https://www.sykescottages.co.uk Manager
6.https://www.cotswoldshideaways.co.uk Manager
7.https://www.boltholeretreats.co.uk Manager
8.https://www.cotswolds.com Manager
9.https://www.holidaycottages.co.uk Manager
10.https://www.character-cottages.co.uk Manager
11.https://www.manorcottages.co.uk Manager
12.https://www.independentcottages.co.uk Manager
13.https://www.ruralretreats.co.uk Manager
14.https://www.hometogo.co.uk OTA
15.https://www.booking.com OTA
16.https://www.cottages.com Manager
17.https://www.holidayhomes.co.uk Meta
18.https://www.honeypotcottages.co.uk Manager
19.https://www.holidaysinthecotswolds.co.uk Manager
20.https://www.classic.co.uk Manager
21.https://www.simplyowners.net Listing Site
22.https://www.nationaltrust.org.uk Manager
23.https://www.tripadvisor.co.uk OTA
24.https://www.holidaylettings.co.uk Manager
25.https://www.handpickedcottages.co.uk Listing Site
26.https://www.mulberrycottages.com Manager
27.https://www.uniquehomestays.com Manager
28.https://www.sykescottages.co.uk Manager
29.https://www.cottages.com Manager
30.https://www.booking.com OTA
31.https://www.wellybootcottages.uk Manager
32.https://www.orionholidays.com Manager
33.https://boutique-retreats.co.uk Manager
34.https://www.kinghamcottages.com Owner (5 Props)
35.https://www.luxurycotswoldrentals.co.uk Manager
36.https://www.booking.com OTA
37.https://www.bridgefarmholidaycottages.uk Owner (7 props)
38.https://www.secludedsecrets.com Manager
39.https://www.staycotswold.com Manager
40. https://boutique-retreats.co.uk Manager
It seems apparent that in this particular case (and others we tried), Google Search is completely dominated by managers and a small number of OTAs both on paid search and organically, and this is in leisure destinations, where it is easier to get direct bookings.
Admittedly this is the summer period. and managers will block out OTAs, and less inventory is available, although the searches were for post-summer dates. Note: VRBO and Airbnb are both absent from the top 40 results. Airbnb's first result is at position 56.
What about cities where OTAs and, in particular, Booking.com and Airbnb are dominant in the UK?
No surprise, page after page of an extended range of OTAs serviced by individual owners and managers when searching London
This section above summarises that OTAs still spend but prefer app bookings, and managers dominate the complete paid and organic listings more aggressively, which probably suits Google going forward. Urban areas, however, are too aligned to the hotel sector with shorter stays and business trips. A Book Direct website is never a bad idea, but the competition to be seen is very tough with such OTA dominance and inventory access.
Can you use other marketing channels to get direct bookings?
The answer is yes. but how effective are they? In years gone by, in the absence of huge OTAs, DMOs (Destination Marketing Organisations) were popular, as were small listing sites.
Adding a listing to a DMO site offered exposure and supported the local economy. Unfortunately, they were left behind in the technology race, are still challenged, have fewer accommodation choices than OTAs and have lost the battle, even at a local level, as supply moved to OTAs and managers. Once a prime target to search for local information, the lack of choice, the poor general presentation, and the link to many private sites to check availability and pricing add too much friction. Managers, however, will still subscribe to DMOs as an added SEO link and traffic driver. Any visitor to a manager's website will also have the benefit of choice, price and availability from a single link.
Example from one of the UK's biggest DMOs
>Step one: Click the self-catering menu item, which is invariably one of a number of choices. Note the "Self Catering" agency independent menu item, a relatively new selection option.
>Step two: The site creates pages of listings (below)
>Step three: Click a link to an interesting property and find the contact details:
>Step four: Click the URL link (or email or phone) and use the site search box for dates if it has one!
Step Five: REPEAT 50 TIMES.
Yes, some sites have more OTA-like tools, but having sufficient choice requires mass integration from PMS systems and channel managers, leaving the DMO at the mercy of the tech supplier.
DMOs also use OTAs.
This screenshot is from the VisitScotland Accommodation link and has search and price facilities:-
BUT: Many "Book Now" links on this page head off to book on Booking.com,
and others link directly to various inconsistent web checkout pages (example below), again a poor guest experience.
In addition, only 16 places were available in Edinburgh in mid-October, compared to over 1000 on Airbnb. Even if 20% of these were in the same proximity, it is 20 times the choice.
Consider an OTA like Booking.com, ranked 37th globally, with low bounce rates, very focussed on accommodation, with browsers spending 8.45mins per visit from 614m visits per month. A typical DMO of note may see 2 minutes only review on the limited accommodation pages, and <25% of all traffic is for accommodation, the popular searches being events and attractions.
The Question: Should I focus on Book Direct?
Perhaps, but let's qualify this question: If you are:
Prepared to put in the time and effort required
You are keen to provide a great hospitality experience
You are in this for the long haul, not a few months or short years
You understand this is not a "build it, and they will come" approach. It is a build, keep building, market, link, tweak, refer, review, distribute, socialise then rinse and repeat.
then absolutely yes:
OTAs and Managers are focused daily on marketing, technology, hospitality and growth. They are your competition, but as reviews have shown, owners see higher review ratings, and it's obvious why. A clear and narrow focus is hard across thousands of properties and guests. If you have a higher-value property or one that sleeps large groups, then your need to derisk is even more significant, and it is often easier to achieve a higher % of direct bookings.
De-risking the loss of an Airbnb account for no reason, especially if guests get cancelled and want to find you is one reason you need a website, at the very least. Airbnb is removing the alias email system, which has security PR embedded in the message as to why: it also means that all messages can be reviewed for improved booking opportunities and any offsite transaction likelihoods reduced.
As technology progresses and more and more owners use technology to distribute to marketing channels and other websites, the booking channel and trust elements embedded in the journey will improve, such as insurance and payment security.
Artificial Intelligence and Machine Learning may yet level the playing field.
Just as we thought the Internet would help the little guys, and this turned out to be incorrect, AI may offer the same hope!
If, for example, your property is on OTAs and is more expensive and offered fewer benefits, then if a guest can book direct with complete confidence, and the same cancellation and insurance rules apply, the increased opportunity is there.
AI and financial transaction companies offer new horizons. Imagine asking your personal travel AI to locate a villa in Tenerife on your budget (it knows what you and your family like) and offers up suitable choices, then finds the best price on your chosen villa. The AI tool finds the direct property underpinned by relevant Trust businesses and books for you. The financial transaction company makes money: the OTAs offer choices before referrals direct.
We asked GPT4 the question, and it replied: "AI can help analyze a massive amount of data, including hotel & rental rates, room availability, customer reviews, and more. AI can also consider multiple factors, such as seasonal trends, special events, or even weather forecasts, to predict price changes and suggest the best time to book a hotel room. These systems can provide users with a wide range of options, potentially including non-OTA (Online Travel Agency) accommodations like direct bookings, rentals, and bed-and-breakfast establishments."
A brave new world, and no doubt, Google and Bard or Microsoft and GPT will squeeze the money pipeline, but AI is out of the bag already, and who knows what intelligent people will create?
Unless you start now, however, you may become trapped forever in the OTA silo as one of the millions without a unique identity. A film quote comes to mind:
"You are Number Six.
I am not a number, I am a free man!"
The Prisoner, 1967/8
Social Media
A topic for another day but indeed an additional necessity to improve your book direct opportunity, if only for social validation, let alone direct booking traction.
Some More Google thoughts
The Brave New World Never Happened
Quite simply, it is not a tool that any longer allows small enterprises to grow and flourish without extreme effort and education; it is not seen as a playing field leveller or even an opportunity for smaller companies or individuals to leverage without bottomless pockets or strenuous workloads, creativity and rich networks.
OTAs and Managers will dominate the current situation.
Google is still important, but less so.
Off the back of Google and massive spending over the years, brands have been built that now command organic bookings and engender trust in the unsuspecting public: Booking.com, Expedia, Trip.com, TripAdvisor even Airbnb has become the Hoover of rentals. They are focused on mobile apps and have global brands.
It didn't take too long for other companies to jump on the bandwagon and start consolidated aggregation of inventory as APIs and tech accelerated. More recently, we have seen new players such as Hometogo, Holidu and niches such as PlumGuide, BringFido, Misterbnb and many more. Then we saw hotels entering the market, with The Mariott leading the charge with Homes&Villas and 140m loyalty members. The correlation between ad and SEO spend vs booking commission and tapping loyalty programs is their simple approach until a global brand is built. This approach takes deep pockets.
Google needs fresh blood.
Is this good for the consumer?
As a member of the public, these OTAs offer choice, ratings, immense company trust and frictionless transactions. On the downside, there is no responsibility or property qualification on-site or remotely: they add fees, and managers also uplift prices, which are often considerably more expensive.
Google and AI can rectify this situation.
Google's Response to Changing Internet
Blog-style content has migrated to closed forums or social media, making traditional search less effective and users expecting precise results from broader and more complex search queries.
Use alternative media in your exploration of Direct Booking opportunities.
The Transformation of Information Processing Google has fundamentally changed how we evaluate, process, access, and even conceive information. The younger generation engages with Google Search differently, often conversing with it like a person, which has led to anticipatory behaviour in the search tool and the rise of humanized AI voice assistants. This shift has made it increasingly challenging for traditional search methodologies to provide the precise results users seek from a spectrum of complex queries.
This is a future opportunity for AI and Book Direct.
The Need for Competition Google Search would benefit from better or more competition. The most significant improvements to Search occurred from 1998 to 2007, attributed to competition for market share. Google's current focus on promoting its products in search results has allegedly led to a range of underperforming Google products.
AI will nibble away at the current status quo.
The Call for Increased Competitive Landscape There's a growing consensus that Google Search stands to gain from more robust competition. The most notable advancements in Google Search took place between 1998 and 2007, a period marked by fierce competition for market dominance. However, the company's current emphasis on pushing its products via search results has purportedly resulted in a host of subpar Google offerings.
Google has a suite of widely used products, but search and mapping (that Trojan Search Horse) underpin much of this.
Use Google but follow its direction and developments.