Driving Direct Online Bookings with Deposit PoliciesPrashant Raj
In working with thousands of hotels, we have found interesting ways in which hotels can increase their website bookings. It turns out that the amount of payment a hotel collects at the time of booking also plays an important role in driving bookings on the website. There are several deposit options that hotels use, these include:
- Pay 100% at the time of booking
- Pay a percentage between 0-100% at the time of booking
- Pay at hotel but provide a Credit Card guarantee
- Pay at hotel – no card required while booking
We observed a significant growth in website bookings for hotels who decrease the up front deposit amount at the time of booking or switch to completely pay at hotel (i.e., no deposit required). A large hotel chain saw 50% increase in online bookings by moving from 100% advance payment to 25% advance payment. Another hotel in Mumbai saw a 2x growth in website bookings by switching to completely pay at hotel – no card required at the time of booking.
This phenomena is not surprising. By collecting smaller deposits the risk of a customer is reduced, encouraging him to book on the website. The trend is similar to e-commerce industry where 70% orders are Cash on Delivery – a customer only pays after receiving the product and takes no risk whatsoever. Pay at hotel – no card required – works in a similar way for guests booking a hotel on the website.
However, just like e-commerce which sees a high rate of returns on CoD orders, pay at hotel – no card required – can result in no shows. As a hotel you of course do not like a no show, but its impact is felt more acutely when your hotel is running full – when the room could have been sold to another guest – a no show then where you are unable to get retention charges from the customers becomes a complete loss of revenue.
At Simplotel we are constantly trying to help you get more bookings from your website. The Simplotel Booking Engine allows you to set up a deposit policy by day of week or on certain dates (e.g. off season or low occupancy dates). You can also set up pay at hotel just for last minute bookings.
Try out different deposit policies for your hotel today to see how they impact your website bookings. You are welcome to share your findings with us in the comments section below or at firstname.lastname@example.org.
To learn more about Simplotel call us at (+91) 8033646154 or contact us at email@example.com.