• Hotels Want to Capitalize on the Direct Trend - but for How Long?   

Excerpt from PhocusWire

Large hotel chains are looking to make hay while the sun shines when it comes to attracting bookings via direct channels.

For several reasons, from loyalty membership to the latest information on hygiene protocols, many consumers have gone down the direct route over the course of the pandemic.

The most recent earnings calls from Accor, Hilton, InterContinental Hotels Group (IHG) and Marriott International contain overt references to direct channels or at least hints of encouraging the trend.

In its fourth quarter, 2020 earnings call, Accor chairman and CEO Sebastian Bazindescribed the company’s loyalty program Accor Live Limitless (ALL) as the best tool in the armoury to fight the online travel agencies.

He said the company had managed to protect its direct clientele in 2018 and 2019 and that the strategy going forward would be to continue boosting its lifestyle offering and working hard to retain existing customers.

Bazin said while Booking.com and Expedia would spend billions on keywords to acquire customers, Accor did not have the same “amount of wealth.”

He also said that recent strategic partnerships with brands such as Faena, Rixos and Hoxton mean far less reliance on OTA customers with repeat guest rates of 75% or higher.

“So yes there’s concern, but let's be very disciplined. I'm not competing on the wrong metrics because that's a lost battle.”

And now is definitely the time to capitalize while the online travel giants aren’t spending on marketing with Expedia and Booking slashing marketing by $6 billion in 2020.

Certainly Accor made a big deal of its ALL program during the earnings call and although its loyalty scheme growth rates - growing by about eight million a year before the pandemic - dipped somewhat in 2020 to only grow by four million to 68 million, Bazin expects the rates to go up again as soon as its hotels are open.

While many fear that business travel will not come back in the same volumes and hotels will have to work hard to make up the gap, Bazin said the company is very focused on giving members the lifestyle opportunities such as sporting events and music experiences to burn points.

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