Hooray! A small but nimble UK chain plays the OTAs at their own game

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With conversions on their direct channel up 98%, could others learn from UK-based Shire Hotels’ new price comparison tool? Pamela Whitby hears more from the group’s e-commerce manager

About 18 months ago Sam Wilson, an e-commerce marketing manager at Shire Hotels was scratching his head. He’d been at the organisation for five years and in that time had seen year-on-year traffic to the group’s website grow by around 25%. Yet frustratingly conversions had remained completely static.

“It got me thinking about user psychology and what the journey to booking a hotel room would like for a customer that didn’t know how the hotel business works,” says Wilson.

And we all know what that journey looks like - Google first, then a comparison of various OTA, hotel and review websites, careful consideration of dates, price and other variables – and finally a decision on where to book. Various studies have put the number of sites a customer will visit before booking a holiday at anything between 15 and 150. And if Shire’s experience is the measure, more often than not, clearly not on the hotel website.

In thinking this through, Wilson started to wonder what would happen if he gave users more information on the group's website but still the freedom of choice about where to book. The idea was born to develop a Trivago-style price comparison tool at the point of booking.

Anything but the enemy

For price conscious customers – and many today are – the notion of getting the best deal is important. And while Shire Hotels has rate parity agreements with numerous OTAs, they can still offer a best rate guarantee. So if, for example, a hotel can throw in free breakfast or offer a room upgrade at the point of booking on the direct website, they’re in a much stronger position.

What Shire Hotels is doing, quite simply, makes good business sense, but Wilson is quick to point out that the OTAs are anything but the enemy.

We’ve seen a 98% increase in conversions on our direct channel

Sam Wilson, E-commerce Marketing Manager, Shire Hotels

“We have an extremely good relationship with the OTAs and the last thing we want to do is fall out with them,” he says, acknowledging that they drive valuable business from other sources that with a limited marketing budget Shire could never dream of achieving.

Great partners or not, if you’re paying hefty commissions of around 25% - and at times even having to bid against the OTAs for your own brand name (yes it happens)– then small and large chains need to negotiate harder for fairer OTA contracts, but they also need to innovate.

While it may be early days, at Shire Hotels this price comparison  innovation seems to be paying off.

“We launched with the tool on November 17 and to date we’ve seen a 98% increase in conversions on our direct channel,” says Wilson.

When it comes down to it, it’s about transparency and giving the user the choice to book on any channel that they see fit  - interestingly Shire is seeing some room bookings coming from social media. But it’s also about hotels thinking cleverly about how they can differentiate in a highly fragmented world.

According to Wilson, once the guest is through the door and settled in their room, they have no trouble differentiating on service and working on driving those all important ancillary revenues - see EyeforTravel’s latest report Ancillary Revenues in the Hospitality Industry.

 In keeping with the theme of transparency, the group displays both positive and negative reviews from TripAdvisor on its own website, but it also aims to respond to every bad review. Recognising the importance of social media, they also put advertising spend behind Facebook for things like weddings, events and so on rather than on accommodation, and use a range of monitoring tools to measure success. “We are aware that this is a 24/7 channel and all our hotels are trained up,” says Wilson, who sees social media as more of a PR and customer service tool.

But the battle for online share continues and with Google HotelFinder finding its feet and Amazon now entering the fray, Wilson knows it's anything but over. Still, what this small hotel chain has proved is that if you think through the user experience and innovate with technology there is everything to play for.

All power to Shire Hotels!

 

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