The Distribution Train Is Leaving the Station—Are You on It?

Rachel Scott and Ian Rhodes
4/25/2022

The best booking is a direct booking. It’s every property manager’s most profitable and preferred channel; however, it can seem elusive with the prevalence of online travel agencies (OTAs) like Airbnb, Vrbo, and Booking.com. These websites offer incredible exposure for your portfolio and billions of dollars in potential revenue, but relying on them as your only source for bookings can be a major pitfall. There is a better strategy. Embrace direct channels to maximize revenue and beat your competition. With a thoughtful distribution strategy, you can have your cake and eat it too.

The Advantages of Direct Bookings

Before we get into how, let’s talk about why direct bookings are so important. Direct bookings are essential to your vacation rental business for a multitude of reasons, but it boils down to three major advantages:

• Take financial control of your business: When guests book directly from your website, you will avoid fees taken by OTAs and lessen your dependency on them.
• Maximize revenue: You can keep more of what guests pay and use it to reinvest in your business.
• Elevate your brand: Keep your branding front and center with potential guests on your direct booking site.

How Do Direct Bookings Fit Into Your Distribution Strategy?

As the growth of Airbnb and Vrbo have shown over the last few years, short-term rentals are increasingly popular with guests who are looking for more space, privacy, and amenities when they travel. Capitalize on this trend with a direct booking website that compliments your presence on these platforms.

It’s vital to get as many views on your listings as possible, and OTAs can help drive those views. These platforms have a large online presence and bring in millions of people looking to book accommodations every day. However, since typical OTA agency fees total roughly 17 percent, your distribution portfolio should not depend entirely on them. ‍Depending only on OTAs could mean tens of thousands of dollars in unnecessary fees paid over the course of a year for customers you could have directly booked.

Having financial control over your bookings is another key benefit of direct bookings. If the unexpected happens, you and your guests can work out how best to handle it instead of being subject to an OTA’s policies. Investing in a direct booking method for your portfolio will save you time and money in the long run, and will allow you to make deeper, longer-lasting connections with your loyal customers.

We recommend short-term rental managers list their properties on the major OTAs—as these sites will get them new customers—in addition to setting up a direct booking website. And we recommend experimenting with one or two niche channels at most. While more channels are better, at a certain point you will reach a plateau in bookings increasing—usually at about four or five channels.

Become a Master at Managing Multiple Channels

Managing multiple channels is time-consuming and can get expensive. There are also other dynamics at play with OTAs like changing guidelines and cancellation policies. We suggest starting with a broad distribution strategy and then capturing that demand from those channels to build a loyal (and profitable) guest base.

Consider the OTA fees as your customer or guest acquisition cost. This is the price you pay to acquire a new guest, but the key is to make sure you don’t pay the OTAs to keep that guest. You need to capture this demand and make it your own, whether that is through a streamlined check-in/out process or delivering a superior guest experience.

Short-term rental managers and owners can take a page directly out of the hotel playbook to ensure they don’t ever repay an OTA for a repeat guest by having a seamless, mobile-friendly direct booking engine and website. A direct booking engine is essential for any vacation rental owner or property manager seeking to profitably grow and retain guests. Only through this solution can they run impactful marketing campaigns or deploy valuable merchandising tactics.

Set Your Direct Booking Site up for Success

There are a few things to keep in mind when building or improving your direct booking website. You want to keep guest experience in mind, and you also want to ensure that the site is technically set up well.

When planning a vacation, potential guests demand a stress-free experience. Make sure that your website is flexible, responsive, and optimized for search engines. That way, visitors will be able to find the site quickly, navigate to the perfect property, and book on any device. Keep these things in mind for your direct booking website:

• Ensure that your website is SEO optimized for your destination and listings.
• Your website should be mobile-friendly to provide the best experience for guests.
• You should have the ability to update your website fast. You can set up a self-service web hosting tool, like WordPress, with admin tools that let you confidently edit, revise, promote listings, add pages, and own your content.
• To measure how well your direct booking site is performing, look for strong improvements to your conversion rates. A strong conversion rate is an indicator of a great direct booking website.

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