Direct bookings give the business more control over customer service and higher profits, while indirect bookings let the business reach more customers and improve communication with them through third-party agents.
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In the digital age we live in now, there are two ways to book: directly and indirectly. In this article, we'll talk about how these two types of reservations are different, as well as their pros and cons.
Direct bookings are reservations guests confirm directly with a property without using an online travel agency (OTA) or 3rd party intermediary. They're typically made on a hotel's website or other direct booking channels, like email, the sales team, social media, or through messaging tools like WhatsApp or Messenger.
Direct booking can be more profitable for hotels because it eliminates the commission fees that are typically charged by OTAs. These fees can range from 15-30% of the room rate, which can significantly impact the hotel's bottom line. By encouraging guests to book directly, hotels can increase revenue and profitability.
There are two core types of bookings: 1) Direct Bookings and 2) Indirect Bookings. Within these different types of bookings there are also multiple variations including instant booking (guaranteed booking) and pending bookings.
Reality is, hotels tend to offer the best rate when guests book directly with them. At the same time, hotels are very clear about their prices in order to avoid any misunderstandings that might affect the guests' experience. Because of this, when you book directly with a hotel, prices are final and free of hidden fees.
Direct booking can be more profitable for hotels because it eliminates the commission fees that are typically charged by OTAs. These fees can range from 15-30% of the room rate, which can significantly impact the hotel's bottom line. By encouraging guests to book directly, hotels can increase revenue and profitability.
In 2019, only 11.8% of bookings were made directly. In 2021, this figure climbed to 21.5%, an increase by 82% in two years. In the first quarter of 2022, the share of direct bookings was on average 19.3%, which indicates that booking directly remains significantly more popular than was the case in 2019.
Rather than booking directly through the airline, doing it through Expedia can save travelers money. In many cases, Expedia can offer flight tickets cheaper than the airlines. Because third-party services often get a bulk discount, they can sell their flight deals for less than the average ticket prices.
“Throughout the day of check-in, prices keep decreasing,” says Shank. “If there are still these empty rooms by 4 p.m. the day of arrival, the hotel will have a lot of certainty that they are not going to get filled otherwise. That's when they're really willing to put a really, super good deal on it.”
Most travel agencies agree that the cheapest days to book hotels are Fridays and Saturdays. While these are the most expensive days for actually checking in and out, the best hotel rates are on the days when most people are traveling.
Figuring out the best time to book a hotel isn't an exact science — there's plenty of variation throughout the industry. But if we're looking at statistics, the lowest prices for hotel rooms are typically found just 15 days before your stay. Yes, last-minute bookings are (usually) better.