Hotel Industry Blog

Bookassist CEO Des O’Mahony discusses Cost Per Acquisition

By Editor | On Wed, September 20, 2017

Bookassist CEO Des O’Mahony discusses the metrics of Cost Per Acquisition, what hotels can do to measure it properly, and how they can leverage the knowledge it brings. In particular, the fact that hotels often hamper their own ability to drive direct business is discussed. The interview is with Stephen Dudley from Fáilte Ireland, Ireland’s National Tourism Development Authority.

The interview is a follow up to Bookassist’s contribution to the Fáilte Ireland CPA report released in late 2016.

Mobile Marches Forward - Is Your Hotel Ready?

By Des O'Mahony | On Mon, August 14, 2017

Mobile is increasingly becoming the dominant avenue for information access and is increasingly strong in the decision-making process in travel.

​Mobile internet access continues to move to “the norm” versus desktop/laptop access. This is hardly surprising given the advances in mobile devices and access capability, as well as the reduction in access costs. Mobile is particularly critical for the travel sector, since it combines key elements of the experience in a perfect storm, i.e. the ability to geo-localize information, to research and to book, as well as the ability to share travel experiences in-the-now via mobile-dominated social media.

What we’ve looked at

We’ve analysed traffic and revenue generation across hundreds of hotels in the European marketplace for the first six months of 2017 and compared with the equivalent period in 2016. In order to be sure of a representative and comparative sample, we focused on the top 200 hotels in each of the following catchment regions that we manage with our local Bookassist teams, namely UK & Ireland, Spain & Portugal, Italy, Austria & Germany, France, Czech Republic & Slovakia.

Traffic on Mobile in Selected European Regions

In every market looked at, desktop traffic as measured by average user sessions per hotel has shown a decrease for the first six months of 2017 versus year ago, and the smaller tablet-related traffic element has also decreased. This drop has been taken up by strong double-digit growth in mobile phone traffic in all markets in terms of user sessions (see figure 1).

Mobile phone alone will surpass 50% of sessions in our Ireland and UK sample by the end of 2017 based on the current trend.

Visitor sessions by platform
Figure 1: Visitor sessions by platform on Bookassist client hotel websites in Europe from January to June 2017, together with the relative change (in brackets) compared to the same period in 2016. Mobile traffic is significantly up universally.

Revenue Generation on Mobile in Selected European Regions

With revenue generation data, we see quite a different story. For the same hotels, mobile revenue generation also shows strong double-digit growth year on year, but this is coming off a very low base of mobile revenue generation in many cases (see figure 2). The volume of mobile business is increasing in all our European markets, and again Ireland and UK is proving to be in a strong position with this trend.

The ratio of mobile to desktop traffic however is far higher than the ratio of mobile to desktop revenue generation, indicating that customers are still far more comfortable committing to hotel booking transactions on desktop despite researching on mobile. At least for now.

Revenue share by platform
Figure 2: Revenue share by platform on Bookassist client hotel websites in Europe from January to June 2017, together with the relative change (in brackets) compared to the same period in 2016. Mobile-generated revenue is significantly up universally but doesn’t capture the same impressive slice that mobile traffic does.

What does it all mean?

The data presented here are just the tip of the iceberg in our analysis, but there are two key points here for hotels: the obvious growth in mobile access and the need to cater for it, and the questions around the relatively slower pace of mobile revenue generation.

In terms of access, hotels need to be fully mobile-aware online right now. It’s no longer something for the future. The industry must also recognize that a full user experience is increasingly required on mobile, and must move away from having lower-level content and weaker experience on mobile versus desktop. There is a trade-off here in terms of what you can present to the mobile visitor and the bandwidth requirements for it. But the key is to always have information optionally available should a visitor take the active decision to access it, rather than taking pre-emptive action by stripping out content to satisfy online speed tests but leaving yourself with a fast and useless site. Active access decisions are less influenced by mobile speed issues than relatively uncommitted browsing for example, so optimizing everything to match a browsing or search-oriented mobile speed test could be detrimental. This is a complex area of debate that we continue to study and try to quantify.

Regarding revenue generation, there are a number of factors at play. It could be that difficulty with credit card entry or payment models on mobile could negatively impact mobile conversion versus desktop. But in our data we do not see an appreciable increase in cart abandonment at the payment stage on mobile versus desktop. Bookassist’s mobile booking engine does allow credit card scanning for example, as well as the possibility for “book without credit card” in some cases. But there is no doubt in general that the industry struggles with credit card entry and/or payment as a higher barrier on mobile. Fixing this as an industry will certainly help trends.

Another factor often touted for relatively lower mobile revenue generation is that people book last minute and cheap on mobile. In our data, this is not so. There is no significant difference in the individual transaction values between mobile and desktop in our preliminary data. In other words, people tend to be booking the same kind of thing whether it is on mobile or on desktop. In fact, for one of our 5 star resorts outside Dublin, we saw 36% of their booking engine revenue come via mobile in July 2017, so “expensive” bookings are not immune to mobile at all.

Right now, it seems that many people may simply be more comfortable booking on desktop, or may be in a different frame of mind (i.e. at a different stage of the decision process) when on mobile which reduces their tendency to complete a transaction there. If so, this habit will certainly change soon.

Not the Complete Picture

It’s important to realise that bookings on mobile in particular are not confined to the web, though this is the only really viable channel on mobile for the independent hotel. In-app booking on mobile is on the rise, but publicly-available data on the area is difficult to find. In discussing bookings via OTAs with a number of hotels, it is clear that OTAs are not sharing information on whether bookings for their clients are coming from in-app on mobile or from mobile web. Thus OTA figures in the public domain regarding mobile booking need to be treated with some caution in terms of their exact interpretation. See

Bookassist Keeps You Prepared

Bookassist solutions have been mobile-ready since our first mobile booking engine launch in 2010. All web design and booking engine products are now responsive/adaptive or tailor made for mobile. Our mobile booking engine is the fastest and cleanest experience out there - and is set to get even better with a new release in late 2017.

Bottom Line

Mobile is increasingly becoming the dominant avenue for information access and is increasingly strong in the decision-making process in travel. But for now, revenue generation on mobile for hotels falls short of desktop. Continuing improvements in mobile user experience, and in payment methods should redress this shortfall in time.

(Note that there are more specific data for the Island of Ireland in the news post “Are Irish consumers more avid users of mobile?”)


Dr Des O’Mahony is CEO and Founder at Bookassist (, the multi-award-winning technology and digital strategy partner for hotels worldwide, and is a HSMAI “Top 20 Extraordinary Minds” recipient.


Bernhard Böhm is Product Research & Development Officer at Bookassist.

Learning from the Giants: how Booking and Expedia build their traffic online with Metasearch

By Jacopo | On Mon, June 26, 2017

Metasearch is no longer the wave of the future, but of the present. it is now a strong reality that can be no longer be ignored by independent hotels in the quest for direct booking business.

It’s always good practice to look at how the big online travel agents (OTAs) behave operationally in order to identify what best practices can be taken away for your own everyday hotel business operations. From how they build their visibility online through to their cutting-edge conversion tactics, OTAs are highly optimised and very good at what they do, so there’s always something to learn.

Visibility at the core of OTA strategy

In recent months there’s been considerable noise in the industry after Priceline Group Inc released its Form 10-K 2016 Annual Report detailing the unimaginable sums of money they spent in online advertising in 2016. It wasn’t only the $3.5B that impressed, but also the fact that it represented an increase of nearly 30% year on year. How could it happen that such a big group that already owns the largest market shares in most of the markets it operates in saw fit to increase its own online advertising spend by such a margin? What changed market dynamics so dramatically?

The reason why Priceline has kept putting - and indeed increasing - spend in online advertising is actually clearly stated in its Annual Report and is no secret. It is the exact same goal that every hotelier in the industry also faces:

Performances advertising expenses increased [...] primarily to generate increased gross bookings and gross profit

Generating bookings is the ultimate and definitive goal as this is the only road to profitability: and how the goal can be pursued in first instance looks very clear to Priceline: make a massive investment in online advertising.

Where is the spend?

However it’s not really about the quantity of the spend but the quality. How is this huge amount of money actually spent by Priceline? On what campaigns? Which platforms are they capitalizing on in terms of generating visibility? This information is also conveniently stated in the report, namely:

…advertising expenses consist primarily of the cost of
a) search engine keywords purchases;
b) referrals from meta-search

Now this sounds interesting. We know OTAs have been spending a fortune on Google AdWords for years (with Priceline Group Inc. and Expedia Inc. actually accounting alone for about 5% of Google overall revenue, some estimate). But seeing referrals from meta-search specifically listed here is actually a big change in Priceline’s visibility strategy. In other sources, Priceline is said to have spent about $350M on Trivago cost-per-click based advertising in 2016, representing about 10% of overall Priceline online advertising spend.

Metasearch-wise, we actually see Priceline brands ( primarily, then Agoda,, etc.) regularly advertised through cost-per-click based advertising across other metasearch websites too, primarily on Tripadvisor. We expect this visibility to grow now that Tripadvisor is said to be reducing emphasis on their direct-to-hotel instant booking effort. It’s reasonable to assume then that another 10% of overall online advertising budget is allocated to Tripadvisor cost per click (CPC) campaigns (or potentially more, as costs of traffic acquisition in Tripadvisor are far away higher than Trivago average CPCs). In addition, perhaps another 10% is split across other metasearch websites that Priceline still regularly dominates in terms of CPC visibility, for example Google Hotel Ads, Kayak, etc.

This analysis leads to our first conclusion: that OTAs have been allocating from 20% to 30% of their online advertising budget to metasearch advertising. This is also confirmed by looking at the OTAs’ online traffic. We can use SimilarWeb functionalities to benchmark metasearch traffic vs other traffic sources, as shown in Figures 1 and 2 for and Expedia respectively. Metasearch appears to deliver at least the equivalent to paid search for the OTAs, and it’s growing.

Figure 1
Figure 1: in March 2017: Looking at search, 34.38% of all traffic is search, and 54.82% of search is paid. Therefore 34.38% x 54.82%, or about 18% of traffic is paid search. Top referral sites are TripAdvisor, Kayak and Trivago in that order, accounting for 18.29% of traffic. It appears that metasearch is therefore accounting for a similar traffic share percentage as pay-per-click in online visibility (SimilarWeb).
Figure 2: Expedia in March 2017: Looking at search, 34% of all traffic is search, and 27.49% of search is paid. Therefore 34% x 27.49%, or about 10% of traffic is paid search. Top referral sites are TripAdvisor, Trivago and Kayak in that order, accounting for 22.72% of traffic. It appears that metasearch is accounting for a much larger traffic share percentage than search pay-per-click in Expedia online visibility (SimilarWeb) compared to

The growing maturity of Metasearch

Contrary to some uninformed discussions in the industry, Metasearch has continued to grow over the last few years and has clearly moved from an early innovation to a majority-adopted platform (See Figure 3).

When Metasearch first disrupted the industry many years ago, OTAs were first to tap in and engage with the Metasearch movement not only by participating from a marketing perspective, but even from a mergers & acquisitions perspective with solid acquisitions. Priceline was first to innovate with their Kayak acquisition and then closed the loop few weeks ago with the Momondo purchase. Other OTAs have also been playing a role in the meantime with Expedia taking major stakes in Trivago and Chinese giant Ctrip acquiring Skyscanner.

Today Metasearch is an area that OTAs cannot afford to ignore, but the question for us is how are independent hotels positioned for benefit from Metasearch?

Figure 3
Figure 3: Innovation adoption curve for Metasearch, and Bookassist’s view on where hotels are positioned.

Metasearch for Independent Hotels

At Bookassist we’re proud to work with some very smart and excellent hoteliers that immediately understood the potential of Metasearch and worked with us as early adopters to tap into it immediately. These hotels today generate significant amounts of direct bookings through referral links from Metasearch with a Cost per Acquisition consistently below 10% and a contribution to their overall direct business of between 20% and 30% generally or even up to 40% in some excellent cases (see Figure 4).

These excellent hotels have been participating in Metasearch for well over a year now and their “early adoption” allowed them to totally understand the challenges of Metasearch as it continues to evolve, with both its opportunity and threats.

But we still see a majority of hotels that remain sceptical of Metasearch, hotels that don’t get it and are reluctant to embrace the change it represents. Hotels really need to change their mindset here and embrace the opportunity that Metasearch can present. Otherwise, the big risk for the slow-adopting hotels is in their attitude, which will bring them to Metasearch only in its Late Majority phase or even later when most of the opportunity has been taken already by earlier adopters.

Figure 4
Figure 4: The results of Metasearch usage by early adopters, the excellent independent hotels who embraced Metasearch and have been able to leverage it in partnership with Bookassist.

Bottom Line

Metasearch is no longer the wave of the future, but of the present. it is now a strong reality that can be no longer be ignored by independent hotels in the quest for direct booking business. A change of mindset is needed by hoteliers who need to move now to assign budgets and adopt Metasearch as a key customer capture opportunity.

Jacopo Rita is Metasearch Manager at Bookassist (, the multi-award-winning technology and digital strategy partner for hotels. Bookassist is The Direct Booking Expert™ and a Google Premier Partner.

Hotels Hamper Their Own Direct Online Business

By Des O'Mahony | On Wed, April 26, 2017

At the recent Bookassist + Google summit held in Dublin on April 24, we specifically polled the audience of some 80 hoteliers or so on quite a number of topics. Of particular interest was the view of their own direct business versus their approach to business via online travel agencies (OTAs).

Here’s just a snapshot of the issues that make OTA dominance harder to manage.

We asked hotels whether they set budgets (spend limits) on their own efforts to advertise their direct business​. Almost three quarters of hotels set hard limits on what they will spend each month, on pay per click advertising, meta search and other costed reaches to their direct potential bookers. In discussions, it’s apparent that the majority review such budgets just annually, not on an ongoing basis. In reality, the 24% of the polled audience who are flexible is actually a figure that represents an improvement over previous polls we have taken in earlier years, so there is a growing realisation that flexibility is needed. But that growth is slow.

Conversely, asked whether there are equivalent maxima on what they will spend on OTA business, two thirds have no limits. Effectively, 66% of hotels polled have an “open tap” ​on the cash they will channel to OTAs once the bookings come in, versus the cut off they apply to their own potential direct business.

The polls are a stark reminder that a mindset change is needed in the independent hotel space, a change in how real cost per acquisition is measured and accounted for, and indeed budgeted for.

Simply deciding to monitor your return on direct advertising on a weekly basis, and adjusting what you are willing to pay once that return is positive, would make a major change in how hotels compete for online market share versus OTAs. Hotels should be prepared to buy business at any rate that is less than or even equal to OTA commission costs (all else being equal). To not do so means (a) paying OTAs so that they grow in strength and (b) yielding valuable booker data to OTAs who increasingly leverage their marketing prowess to switch bookers from online (where you have some chance of competing) to in-app booking routes (where you have no chance pf competing).

Once the OTA has successfully switched potential bookers to in-app booking, that route is locked to external influence and the hotel’s ability to compete overall will further diminish. This shift is further enabled by hotels themselves, offering discounts on so-called “private” sales on OTAs, which again is a tactic being used to switch bookers into in-app booking where “the best deals” will be found.

In my discussions with hotels, I’ve not met any that can tell me whether guests arriving via OTAs have booked online or in-app with that OTA. It would be very interesting to see those statistics, and hotels should make efforts to ask arriving guests and start to see where this is going.

Hotels need to think about the endgame, not just the current move they are making.


Dr Des O’Mahony is CEO and Founder at Bookassist (, the multi-award-winning technology and digital strategy partner for hotels worldwide, and is a HSMAI “Top 20 Extraordinary Minds” recipient.

A Vision Of Hotel Excellence Online

By Des O'Mahony | On Thu, April 20, 2017

The second Bookassist-Google Summit for hoteliers takes place in late April at Google HQ in central Dublin. Building on the last, this meeting’s theme is “A Vision of Excellence” to show how smart hotels achieve higher direct booking figures, with both companies presenting their joint view of what excellence looks like, as well as what it results in. This latest summit meeting for hoteliers follows a very successful Bookassist-Google Summit held at Google HQ in Dublin in mid-November last that highlighted best practice in online strategy for hotels in what is a very fast-moving space.

Bookassist’s overall aim is not just to improve direct online business for hotels, but to allow hotels to benchmark themselves against their peers so that routes to improvement become more clear. To this end, we launched our Direct Booking Clinics in March to allow for assessment of a raft of online and offline metrics for hotels resulting in a personalized Direct Booking Health Score .

To date, almost 200 hotels have been benchmarked in our clinics and have taken positive action based on the findings that give measurable improvements to their online business.

It’s the Journey

So what does excellence in hotels look like? What are the critical factors in achieving success? Is it actually worth striving for excellence? These are the concepts being teased out in the Direct Booking Health Score and in the Bookassist-Google summits.

Let’s start with the result. Achieving excellence online is for sure worth it. Understanding online strategy, to the point where you can control and leverage distribution and develop strong direct business, pays in real hard cash in terms of reduced cost of acquisition and higher margins. It also insulates you against an overly-dependent exposure on online travel agents who can change their fees or terms of business at any time, to your detriment.

However, achieving excellence is not a one-off event. It is a continual journey that requires strong effort and ongoing nurturing. What separates excellent hotels from the others is not just how they leverage knowledge and technology for their own advantage, but how they continue to re-educate themselves to stay ahead of the pack to protect and nurture their direct business.

What Does Excellence Look Like?

Let’s run through a few of the key factors that separate the excellent from the ordinary.

1. Excellent hotels know their numbers inside out. And they understand them. It is critical that all decision makers in every part of the business know what the breakdown between online and offline business is, what the breakdown between GDS, OTA, travel agent and direct to web is, what the real cost of acquisition per channel is, regardless of the revenue. Without this knowledge shared in your organization, there is no urgency created to reduce distribution costs and focus on margin improvement. In our experience, a majority of hotel staff have misconceptions about their own distribution figures and costs, and this needs to be fixed.

2. Excellent hotels share information with their online partner, be that Bookassist or any other online strategy partner. Your marketing agency and online technology provider can only operate to the optimum with full information on your overall marketing plans, online and offline promotion plans, advertising campaigns, distribution strategy and, of course, your numbers. This requires coordination at the marketing strategy level that, in our experience, is often missing in hotels. It is a lost opportunity at best and at worst leads to conflicts of approach that affect performance both online and offline. Hotels and their online partners should also challenge each other to strive for improvement and ensure that expected outcomes are reached on both sides.

3. Excellent hotels leverage the best technology and recognize the need for investment in staff upskilling. Distribution strategies need micro-management that can only be achieved with technology. Rates and availabilities have become dynamic variables that need 24 hour attention. The battle for customer interaction requires relationship management technology to stay on par with or ahead of OTAs. The increasing need to control long-tail business and exposure requires 12-24 month forward planning and management. The plethora of online sales channels means that your web and booking engine must be highly optimized at all times to ensure you can convert, not just optimized once every two years. All of these issues require interconnected technology, and staff who understand how to operate it.

4. Excellent hotels are never complacent and are continually working to improve on processes and remain on top of the changes in the marketplace and in technology. It is not good enough to get the best technology and implement workplace change as a once-off. This sows the seed for excellence, but to flourish there must be ongoing nurturing, constant feeding with a continual watchful eye on your natural predators.

5. Excellent hotels demonstrate excellence throughout the organization. Every staff member has their part to play, this is not just a senior management game. For example, the cleaning staff are more responsible for your TripAdvisor ranking than anyone else in most cases. The breakfast chef, or the doorman, is often the last impression left on the guest of what your brand stands for. And the reception staff are those who can encourage every arriving non-direct customer to consider the direct booking path next time by cheerfully explaining the advantages given to direct customers (do you/they actually know what they are?). In excellent hotels, front-line staff understand their influence on the customer and are trained to ensure that influence is a positive one. This is about management and an empowerment culture, sharing the organization goals with the entire team.

6. Excellent hotels know their data and use their data, using good CRM technology to capture data and good segmentation principles to organise their data. From targeted email marketing to segmentation and personas driving search engine marketing, hotel data usage is invaluable in ensuring differentiation for hotels and helping hotels balance the power of OTAs.

What does excellence bring?

Excellence comes with a cost. Technology, strategy, education, training, marketing spend, continual improvement – none of this is cheap. What’s interesting is that when all these elements work in unison, like a tuned orchestra in flow, they help each other to produce better overall brand recognition, better customer satisfaction and more direct bookings, resulting in a reduction in cost per acquisition and improved profit. However, when done half-heartedly, like randomly-played musical instruments, they fail to compound eachother and simply cost money without clear return.

If efforts to improve direct booking are not working for you, the solution is not to reduce budgets and limit your exposure, which will only guarantee failure. The solution is to redouble your efforts, seek help to improve your strategy, and increase your targeted spending to ensure results. Success breeds success and rewards concerted effort, so identifying areas for potential improvement in your strategy is something you should embrace. This is what the Direct Booking Health Score is designed to do.

But more than anything else, excellence brings independence. It reduces reliance on external distributors who view you only as a supplier, not a partner. It ensures that you can take decisions that are in the long term interest of your business.

Bottom Line

It’s clear that there are no absolute benchmarks when it comes to online measurement. Each hotel is genuinely unique in terms of its location, feature set and appeal. However in almost any category you care to mention, there are best performers and worst performers that you can gauge your hotel against, and in doing so implement change that puts you on the track towards the best performer position where you can reap the benefits.


Dr Des O’Mahony is CEO and Founder at Bookassist (, the multi-award-winning technology and digital strategy partner for hotels worldwide, and is a HSMAI “Top 20 Extraordinary Minds” recipient.

Hotels Must Work Collectively To Champion Direct

By Des O'Mahony | On Fri, March 03, 2017

The industry saw a strong return to focus on direct-to-website online business from the big hotel chains in 2016, with campaigns from Marriott, Hilton, Hyatt and IHG attempting to push the customer from online travel agents (OTAs) to the direct hotel website route (see Skift). The chains are fighting back against OTA dominance to woo the customer directly, and are clearly prepared to pay to do it. Their action alone should be an example to independent hotels that there is a serious issue to be tackled here, and that they too must engage.

But the chains have very significant resources to take on the OTAs and counter their advertising. What can an independent hotel do against the OTA onslaught? They key is for hotels to work together and leverage the scale of the industry itself.

It’s not the product, it’s the route…

Before we address actions, let’s step back and look at context. The competitive issue for hotels is quite unusual versus other industries. With most industries, you live or die on how you shift product or gain customers versus your competitor. But where hotels suffer real competition is on the route to sale and the relative costs of those routes, not on the ability to sell.

Hotels don’t have a product problem, they have route-to-sale problem. OTAs have optimised their route to sale while the lack of collective action by the hotel industry has blocked opportunity on the direct route.

Getting the right mix of routes to sale is the key to profit generation in hotels. Shifting more sales to the direct-to-hotel route means saving on OTA commissions. But successfully getting that shift means spending money elsewhere - on advertising, on web presence, on technology. This is where hotels are challenged, balancing what needs to be spent versus the gain.

Individual hotels rightly wonder if their digital marketing spend can have any meaningful influence on the rise of OTAs. The perception that OTAs have endless online advertising budgets compared to independent hotels is technically correct, but it’s not the whole story. Priceline, the parent of, apparently spends over $3 billion ($3000 million) on online advertising annually. But remember that lists over 1 million properties, so this equates to $3000 or so spend per property per year - a figure that individual hotels should easily top. So the total amount being spent by the OTAs is not necessarily the issue, it is how it is being spent - and how optimised, targeted and single-minded it is - compared to the highly fragmented approach of individual hoteliers. Think laser versus blunderbuss.

But the route is not always visible

What’s worse, OTAs are now leveraging their brand and customer tie-in position to move their customers onto mobile apps in the next phase of sales route dominance. In the mobile app, no amount of online budget will help hotels - the customer is locked into the route with no advertising distractions allowed. Customers of course like the app route and gain from it precisely because hotels give cheaper prices and special offers to the OTAs to use on those routes - hotels themselves are enabling the creation of a business model that will drive down their own pricing, ensure cost of acquisition rises, and against which they cannot hope to compete.

Obviously as OTAs build stronger and stronger usage of the app route rather than the web route, online advertising by hotels would have comparatively less and less effect. This is already happening. I would bet that most hotels have no idea if the OTA guest arriving has come from the web route or the app route - but it would be sensible if hotels asked and started to find out!

What to do?

OTAs do a great job at getting business, but should not be ceded business that hotels can readily service themselves. This is the hotels’ fault - you cannot blame OTAs for taking business that is easy to take. Hotels can only hope to compete if they genuinely work together to change the way the customer thinks. It can be done, but it takes hotels and hotel organisations to get fully behind it and start thinking in terms of their industry rather than in terms of their own individual business. That’s the tricky part - the hotel industry needs to act collectively.

1. Champion Direct

Hotel websites need to clearly show customers that booking direct gets them something better. There is no point encouraging a booker on your website with the same price and same features that an OTA guest will have. You will lose that sale. It must be better direct. Better.

What are you giving the direct booker that you are not giving the OTA booker? Access to spa or treatments at preferential rates, vouchers to use for f&b discounts at the hotel, guaranteed upgrades or superior rooms compared to non-direct customers, late checkout, early checkin, discounts on future stays?

Define that direct advantage and champion it on your website and on advertising within your hotel. Hotels must educate the booking public that direct brings real advantages compared to OTAs, but hotels need to make sure there really is a clear advantage first. This is not happening universally and hotel organisations need to be educating hotels and encouraging them.

2. Think Collectively

Every single customer that arrives at your front desk from an OTA should be told on check-in that by booking direct they would have gained more advantage - those you’ve already defined in point 1 above. Your staff should be required to do this based on the OTA arrivals list every single day.

But more importantly, ensure your staff speak for your industry and remind OTA customers to book direct every time they travel, not just at your hotel but at any hotel. Spread the word for your industry that direct is best. What comes around goes around, and if every hotel encourages direct then every hotel will benefit.

3. Recommend Direct Alternatives

Your booking process should be smooth and simple, and should recommend alternative dates and packages when a chosen date or package is not available. That’s a given. But again, thinking in terms of your industry, your system should offer alternative hotels nearby right within the booking process if you cannot service the guest - don’t let the guest leave and go to an OTA when they are already engaged on the direct route.

Bookassist’s booking engine allows hotels to offer their own selection of alternative accommodation right within the booking process if there is no availability for your hotel. With reciprocal arrangements, hotels in an area can pass business to each other in this way and recommend direct booking at other hotels. This helps keep the direct booker within the direct community, and it actually works. We see significant engagement with alternative accommodation advertising.

Bookassist hotels can offer their own selection of alternative hotels within the booking engine, encouraging customers to stay on the direct route even when your hotel has no availability.

Bottom Line

Only by genuinely working together as a collective can independent hotels hope to move the dial back towards direct business. The traveling customer must be made aware that booking direct will bring them advantages, and the onus is on hotels to educate their customers for the benefit of all hotels. OTAs will continue to capitalise on a lack of collective action by hotels. It’s time hotels and their associations and organisations moved their thinking towards the bigger picture and began speaking with one strong voice.


Dr Des O’Mahony is CEO and Founder at Bookassist (, the multi-award-winning technology and digital strategy partner for hotels worldwide, and is a HSMAI “Top 20 Extraordinary Minds” recipient.

Five Things Hotels Should Stop Doing In 2017

By Des O'Mahony | On Thu, December 22, 2016

This time of year is great for resolutions and lists of things that one should adopt for a new beginning. But developing good habits is hard work, and without some instant gratification it can quickly become a chore. However, making small changes to existing practices can sometimes be easier and can ultimately reap rewards. Specifically, stopping doing things can sometimes be easier to engage with. Here are existing hotel practices that really need to change, and 2017 is the opportunity to see if you can begin making it happen.

1. Stop treating your website as a hobby

We continue to see hotels relegate their online and mobile presence to an afterthought at worst, or a secondary fill-in strategy at best. Your hotel’s online and mobile presence needs to be front and centre of your entire strategy - not front and centre of your online strategy, but of your entire strategy.

Failure to consider your direct sales strategy first and distribution second automatically means that by design or (likely) by default, your organisation will favour sales via more costly distribution – because it seems easier. Worse, it causes your organisation to build a reliance on non-direct business and removes availability from the direct channel which causes further reductions in your capability.

In 2017, hotels need to stop thinking of their website/mobile sales as a bonus. Instead the attitude should be that anything not being sold on the website/mobile is a problem that needs to be solved. There must be strong and clear ownership of the online presence in every hotel and that strategy needs to take primacy. Accept that your website is no longer a hobby, it is a sales-generating machine, so allocate the financial and personnel resources it deserves or your business will be dictated by external parties if you do not. Can you make a change here in 2017?

2. Stop hiding third party commissions from your accounts

Understanding real cost of acquisition and developing practices to track it is crucial. The sad reality is that most hotels do not really know their cost of acquisition per distribution channel and specifically how it compares between direct business and indirect business. One of the strongest reasons for this lack of visibility is actually the accounting practices of hotels.

Two issues occur which obscure the real cost of your distribution.

The first issue is the “post sale” treatment whereby hotels do not budget in advance for how much they are willing to pay out in commissions to OTAs. They simply write the cheque for commissions once the guest has stayed. This creates a scenario where there are no restrictions on what you will allow OTAs to deliver to your hotel, even though every room sold via an OTA can be a lost opportunity to sell that room via your direct online presence at a higher profit. Worse, your accounts probably record all of those costs together as an innocuous-looking cost of sale line without breaking down each OTA as a specific cost line. The result is unchecked and often invisible expenditure on OTAs.

The second issue is where wholesale commissions are not recorded at all in the P&L. Take this example from Fáilte Ireland’s recent excellent report on Cost of Acquisition (

  • A guest books through a merchant model online travel agency and pays the OTA €200, plus VAT, including a contracted mark-up rate of 20% that was previously agreed upon by the hotel with that online travel agency.
  • Your hotel-collected revenue is recorded on your hotel’s profit and loss statement as €160 from the guest, but €218 is what the guest actually paid, (inclusive of VAT @9%) [the Guest Paid Revenue]
  • The OTA collects its €40 commission before the guest even enters your hotel
  • There is no place to record the €40 as a customer acquisition expense in the P&L.

The lack of visibility on real costs of distribution negatively influences strategic decisions. Hotels need to take steps to fix this issue and ensure that the data necessary to properly inform strategy is no longer hidden. Can you make a change here in 2017?

3. Stop putting barriers on your own marketing

Ironically, while OTA commissions are often paid “post-sale” with no real constraint (or visibility) on their true magnitude, hotels’ accounting practices will begin the year by trying to restrictively budget on what they are prepared to spend on their own online marketing and online presence. In other words, hotels view their own marketing on a “pre-sale” basis - asking what am I prepared to spend to get direct bookings – which often restricts spend.

In contrast to the post-sale approach, this often leads to immediate barriers on a hotel’s own success. Take this simple illustration of why a simplistic approach to budgeting for online marketing can result in lost opportunity:

Your hotel has a bar. You sell Guinness. If you run out of Guinness half way through the month, you don’t say to customers: “Sorry, we’ve exhausted our Guinness budget for this month, we have no more Guinness, go next door if you want some”. Instead, you buy more Guinness, and you will keep buying more Guinness as long as there is an opportunity to sell it.

Spending on online marketing also needs to be viewed this way – you keep buying more advertising as long as you have opportunity to convert at profit. Yet we continually find hotels capping their spends because of pre-defined budgets even when we demonstrate that there is still opportunity to get a return on online investment. You are sending customers elsewhere by not engaging with the opportunity.

Hotels need to think hard about why they continue to apply an outmoded budgeting/restriction approach to a new more dynamic marketplace where opportunity needs to be seized and where returns on investment can be measured quickly. Can you make a change here in 2017?

4. Stop incentivising staff on revenue

The consequences of some of the foregoing, particularly the lack of visibility that many hotels have on the real cost of acquisition, means that many staff responsible for business acquisition continue to be incentivised on revenue. This practice needs to stop, since incentivising revenue alone actually encourages more sales via the easier OTA path at the expense of direct sales.

In today’s marketplace, getting revenue is relatively easy. The battle is getting revenue at the lowest acquisition cost. Since profit is the aim, so that capital is made available for business development, hotels need to focus on NetRevPAR and eliminate old metrics. NetRevPAR is calculated as the Guest Paid Revenue (as defined in the example above) less total acquisition costs, divided by number of available rooms. It focuses on what you as a hotel are left with from what the guest was prepared to pay.

Put simply, incentivising staff to maximise NetRevPAR means that there is a required emphasis on lower-cost distribution such as direct-to web. Can you make a change here in 2017?

5. Stop believing that you can’t compete

Recent reports show Expedia spends about 28% of its revenue on online advertising. spends more now on metasearch marketing than on Google advertising, and both figures are in the gazillions. Hotels often feel that the game is up and they can’t compete. But the wildcard here is the customer, who is increasingly savvy. And that means they shop around and they do seek validation by visiting hotel websites.

Therein lies your opportunity to convince and sell, to demonstrate that booking direct gets them something they don’t get on OTAs. Showing the same prices, features and conditions on your website as on an OTA means you will lose. You must demonstrate that direct customers are different and are something you want to encourage, and that requires clearly answering the online guest’s question of “What’s in it for me?”. If you understand how to do that, you actually can compete and you can redress the imbalance with OTA sales in your favour. It’s not rocket science but it does require effort and focus, and spend.

Can you make a change here in 2017?

Dr Des O’Mahony is CEO and Founder at Bookassist (, the multi-award-winning technology and digital strategy partner for hotels worldwide, and is a HSMAI “Top 20 Extraordinary Minds” recipient.

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