A united campaign has started to increase direct bookings in hostels.
The hostel industry is fragmented, and it is rare that we all manage to join forces and work together
towards the same goal. Despite this, a movement has begun that is rapidly uniting hostels with one
common objective: to increase direct bookings.
Following the increase in commissions from 10% to 12% on Hostelworld and Hostelbookers, members
of our industry have responded in a variety of ways. The most practical and compelling suggestion came
from the German Backpacker Network when they urged hostels to simply include the commission from
each of the OTAs in their respective prices. The reasoning is that booking websites provide a valuable
service that benefits travelers, and therefore the costs of that service should be supported by the
travelers. This suggestion was also promoted by the Swiss Hostel Association to all of their members.
The letters from both organizations are well written and attached below. These letters can be seen here and here.
Some members of the hostel community felt that including the commissions in the price for OTAs was a
good first step, but not enough on its own. Travelers need to be made aware that the prices they see on
OTAs may not be the best prices available. A campaign was suggested to promote the simple concept:
The international collaboration really gained momentum following the Hostelworld conference in Dublin
at the end of February. There was a very productive meeting with representatives from some of the
hostel associations across Europe and North America. One of the goals of the meeting was to determine
specific actions that individual hostels could take in order to increase direct bookings and to reduce our
industry’s reliance on OTAs. The following list of suggestions came out of that meeting, and since then it
has been circulating to members of hostel associations and networks around the world.
Possible strategies to reduce our reliance on OTAs and increase direct bookings:
The 3-Stage Plan for reducing reliance on OTAs and increasing direct bookings:
Stage 1 – include the commission from each OTA in the price listed on that OTA without changing the
rates for direct bookings. (This results in receiving the same amount of money from bookings through
OTAs as we get from direct bookings)
Stage 2 – Send a clear message to guests that it’s cheaper to book direct by:
• Displaying the Book Direct and Save posters in our hostels
• Changing your Facebook/Google+ profile picture to the Book Direct and Save solidarity image. This
image can also be put on your hostel’s website and flyer and even made into stickers or pins that can be
worn by staff or given to travelers
• Changing the name of your wi-fi network to Book Direct and set your password as “book direct and
save”
• Offering guests who book directly a surprise (free drink/towel/laundry/etc) to encourage the
behavior
• Giving guests who book directly a credit that they can spend on products or services in the hostel
• Giving guests who book directly a bracelet that will entitle them to discounts on tours/products/
services and attract the attention of other guests
• Telling guests who book through OTAs that they could have saved money by booking directly and
that they should consider booking directly in the future
Stage 3 – Let the guests decide which method of booking is most beneficial for them (If they feel more
comfortable booking on HW and they are willing to pay more for it, no problem! We receive the same
amount of money and continue to receive occasional reviews. If they decide to keep their money and
book directly with us, then our industry takes one more step forward towards independence from
booking sites)
Hostel owners who are anxious about including all 12% can include a lower amount that makes them
comfortable. If every hostel is even a little less expensive on their own website, then this plan can be
highly effective and we can change the booking habits.
Points to consider:
“What about Rate Parity?”
Answer: HW eliminated rate parity from their contract. We can charge whatever we want now. The
existence of Rate parity clauses in any contract has now been eliminated in Germany, and other
countries may follow suit soon.
“I’m afraid my competitor won’t participate because they want to look like they have the cheapest rates
in the market?”
Answer #1: There is a finite amount of people who only look for the cheapest hostel. Being a LOT
cheaper or a LITTLE cheaper won’t increase the number of people who book this way.
Answer #2: Being a LOT cheaper than the competition makes people wonder what’s wrong with that
hostel.
Answer #3: If they want to be 0.50€ cheaper than the competition, they can still do that with higher
prices, but they’ll collecting more money for each booking. (Is it better to be 0.50€ cheaper at 9.50€ or
0.50€ cheaper at 11.50€?)
Answer #4: If they don’t figure this out on their own, send them a copy of this plan.
Answer #5: Not all hostels need to participate. If a backpacker sees that even 2 of their last 5 hostels
would have been cheaper if they had booked directly, then it will probably be enough incentive to check
for lower rates in the future. The attempt to change their booking habits can still be successful overall.
Other methods to encourage direct bookings:
• Join hostel networks like Go Around Europe who require that bookings be made directly with the
hostel without charging commissions
• Support the Hostels-Direct.com project that is currently under development. (Mentioned in this post)
and other initiatives that promote booking direct.
• Add a pop-up whenever a guest accesses an OTA website on your network that sends the message
“It’s cheaper to book your bed directly with the hostel” or create a log-in screen for your wi-fi network
saying the same.
• Add a signature line to your hostel’s emails that tells every correspondent something like, “In order
to keep our prices reasonable, it is very important to minimize the number of bookings made through
third party booking websites (like HostelWorld, Expedia, Booking com, and HostelBookers). We would
be really happy if you would book directly with us, ideally at our site, [INSERT LINK], or by phone or
email. Thank you very much!”
Other suggested actions to take:
• Reduce allocations on OTAs to the maximum level that you want to receive from them (for example,
if you only want 50% of your bookings to come through OTAs, then only give them 50% of your beds to
sell)
• Support alternative OTAs to encourage competition between the booking sites
• Support the introduction of hostel-specific sites like OnlyHostels.com
• Join the Open Travel Exchange program to provide an alternative booking method to guests and to
receive a commission for those bookings.
• Focus on improving your own website’s SEO and regularly create new and relevant content (blogs,
articles, photos, videos, useful information about your area, etc)
• Opt-out of the AdWords clause in the HW contract
• Replace the HW/HB booking engine on your own website with a free alternative such as
MyAllocator’s Book Now App, which provides real time rates and availability for instant confirmed
bookings without any commission.
• Compile a list of all of the hostels in your feeder cities with their direct contact information and post
this in public areas or make it a landing page for your wi-fi network. Have your reception team offer to
call and make bookings for guests (good for the guest and also good for networking between hostels)
• When you are full and cannot accept a reservation request or walk-in guest, suggest other hostels in
the city or in other cities and offer to make a booking.
• Track your historical pick-up to know when you are likely to sell your beds and when you are not. For
example, if you know that you normally sell 80% of your beds within a two-week booking window and
the other 20% will probably go unsold, then sell those 20% at promotional rates or on OTAs four weeks
in advance. (Sell the beds you expect to go unsold first, just like Ryanair does) During the two weeks
that you know you are likely to sell the beds, reduce your availability on the OTAs so that those beds are
booked through your own site instead.
• Put a long minimum stay (7 nights?) for bookings through OTAs and hope that people will look at
your own site for less restrictions.
• Set your cancellation policy to 3 days instead of 24 hours and hope that people will go to your own
site to find better conditions.
• Reduce cancellations and no-shows from Booking com guests by changing your policy to say that you
charge for these things instead of continuing with their default “free cancellations” policy.
• InfoHostels.com has a “Selected Hostels” section to showcase great hostels. An article about your
hostel here could gain free publicity through their network and newsletter publications. (contact Mario
for more information: eval(unescape('%64%6f%63%75%6d%65%6e%74%2e%77%72%69%74%65%28%27%3c%61%20%68%72%65%66%3d%22%6d%61%69%6c%74%6f%3a%4d%61%72%69%6f%40%68%6f%73%74%65%6c%69%6e%65%75%72%6f%70%65%2e%63%6f%6d%22%3e%4d%61%72%69%6f%40%68%6f%73%74%65%6c%69%6e%65%75%72%6f%70%65%2e%63%6f%6d%3c%2f%61%3e%27%29%3b')))
• Invite respected travel bloggers with a large following (3000+ people) to write an article about your
hostel and/or your city in exchange for free accommodation
Also see the following threads:
10 Ways for Hostels to Improve their Online Presence
7 Questions for More Direct Bookings
Tips for boosting direct sales
Encourage Direct Bookings with this Pster
