Encourage Direct Bookings with this Poster

Thanks for the insight, Marina. Seems crazy that a hostel would charge MORE for direct bookings. I have often talked about providing a discount off our rack rates for guests calling from another hostel. This is a great way for a hostel to provide a value added service to their guests with absolutely no cost to them. I also really miss having the community of hostel owners and staff that starts during a phone call.

I thought Marina's experience with lower prices on the 3rd party booking engines was the rare exception but now I hear if from decepe too. It my hostel, it's all about keeping the price as affordable as possible for this style of traveler. Even though I'm technically a for-profit business I started my hostel to make travel as accessible to as many people as possible. In the words of Mark Twain, "“Travel is fatal to prejudice, bigotry, and narrow-mindedness". If the 90% we receive from a booking engine works for the economics of my hostel it will certainly work to receive 90% from the guest.

What you are describing sounds like hostels who do this are trying to "trick" travelers into come to their hostel, hoping that they will stay follow-on nights at a high cost. A "bait and switch" of sorts. I would be interested to hear from others on this topic. Anyone else experienced LOWER prices at the booking engines? Nowadays, it's so easy to book a hostel online using cell phones or the hostels free internet, I'm not sure why this would even work.

This was pretty common practice in hotels back in the day. They figured that once you were already in the hotel you weren’t going to leave to go shopping around for a better price. Of course, that was before the proliferation of wi-fi and smartphones with constant access to the internet. Generally the online rates would be a bit cheaper, especially on the hotel’s own website, but other conditions may have applied, like being fully prepaid and non-refundable. Also, hotel booking sites would frequently have a one- or two-day cut-off period for their room allocation, so they didn’t sell the hotels on the day of arrival. The idea was that the people who showed up at the last minute really NEEDED to be there, so they would pay the full price anyway.

All of that made sense at the time. Now it’s an outdated and ineffectual pricing model.

Given the easy access to the internet, you can assume that if the price is cheaper online, then guests will book it there. Even if they’re already standing at your Reception desk. But this is an incredibly poor strategy for a hostel because it throws money away that was standing there waiting to jump into your pocket.

For example, if your hostel costs $22 to book directly but only $20 online, then obviously a guest is going to choose to book it online. Now you automatically lose the $2 difference between the prices PLUS an extra $2 in commissions at 10%. This isn’t potential loss from a potential guest, but rather guaranteed loss from a guest who is already standing in front of you with their money in their hand. Plus, now that guest feels put out and thinks that you run a ridiculous business, which will be reflected in the rating that the cheaper booking site will prompt them to leave. By accepting the $20 rate at the desk, the hostel will automatically GAIN $2 over the online booking because they do not pay commissions and they will make the guest happy.

I noticed throughout the summer that the percentage of our bookings through direct sources (our website, e-mail, phone, and walk-in) went up significantly compared to previous years. Is this a trend that other hostels have noticed too, or did we just get really lucky?

We posted the Book Direct poster in our hostel in May, and several other hostels in our feeder cities did the same. Since then the percentage of direct bookings has gone up significantly for us, but not all hostels in those cities reported the same results.

At the end of the summer, the difference in revenue was a pretty respectable amount for us. I’m thrilled!