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Over the past few years, the vacation rental industry has been experiencing quite a fast-paced growth, and there are no signs of slowing down.

It comes as no surprise, then, that there is a large proportion of the business that’s currently being researched, analyzed, and booked online, and there is also a constant shift in the trends surrounding the industry. From the rising number of options, increasing guest expectations, experiential travel being on the rise, and the budding popularity of personalization – there’s a lot that property managers are expected to do, in order to stay competitive.

Of course, this now leads us to the fact that independent property owners can no longer ignore the dominance that OTAs (online travel agents) have over the market. In recent years, the commission-based model used by OTAs has been adopted, bringing with it a decrease in the number of Direct-Booking vacation rentals.

And while OTAs offer a valuable service, more and more independent property owners are realizing their over-reliance on them, and the great success that can come with by-passing them and offering direct booking options to their guests.

The Rise of Direct Booking

So why are forward-thinking property managers now beginning to push for direct bookings? The pie chart above documents a breakdown per channel of all bookings of Hosthub customers within the past 12 months. Although direct bookings represent 22% of total bookings, they are actually responsible for 38% of profits.

So, then, if direct booking gets you more profits, then why isn’t it being utilized more, and what are the advantages and disadvantages of implementing one for yourself? Let’s have a look below.

Advantages of Direct Booking for Property Managers

Increased Profit Per Booking

OTAs usually set high commissions and fees (annual, monthly, per booking, etc.) for both you and your guests.

By receiving direct online reservations on your own website, you will have the huge financial benefit of spending less on OTA fees and commission payments. This is one of the main reasons why creating your own direct booking channel is so appealing and is growing so rapidly in popularity again. You can effectively get your property in front of a large number of people (depending on your advertising budget), and you don’t have to share part of your profit margin with any of the OTAs.

You Can Re-invest Money Saved from Commissions Into Your Properties

Increased profits consequently mean a better experience for your guests. You can invest your extra 15-20% into your property and, eventually, even raise the price of the property. These investments can include things like techy-gadgets, better experiences, a revamped place, free breakfast, welcome packs, or even more amenities – all of which will certainly lead to even better customer experiences and further, higher profits.

Lower Prices for the Guests, More Bookings

It’s not just about individual revenue, either. Having lower costs means that you won’t need to increase your prices to cover the OTA fees and commissions. In fact, travelers are actually becoming well-aware of the fees they have to pay, and they will appreciate the lower price (for the same exact property) on a direct-booking platform, rather than via an OTA.

Better Guest Retention

The best way that direct booking will affect your vacation rental business is through superb guest retention. If you’re building a direct-booking website, you’re more likely going to be looking for a long-term relationship with your guests. You can easily accomplish this by having your own website – from which you’ll be able to retarget them effectively, directly communicate with them, and avoid any third-party players that might affect your relationship with your guest.

Leveraging the Deal Mentality

End-consumers typically have what is known as a “deal mentality”; they understand that, by eliminating the middleman, they get a better deal. And that’s why a growing number of consumers are now choosing to book directly on hotel or airline websites, instead of with OTAs, and thus reap the benefits of lower costs. Savvier guests will shop around for a bargain, and if they can find the same property for cheaper elsewhere, they’re definitely going to forgo the familiarity of OTAs and simply choose to book directly instead.

Better Customer Experience

Another advantage of eliminating the middleman includes the ability to foster a more personal relationship with your guests! They’ll always have direct access to you, and they will easily be able to communicate with you. You’ll easily be able to offer world-class customer service to your guests, and if your guest has any special needs, they’ll know that they simply have to contact you, and then you can work directly with them in order to accommodate their unique, individual needs.

Centralization

Regardless of the number of properties you own, the regions your properties span, or the type of consumers you have, you’ll have a pretty centralized property management experience. You can customize your site’s homepage to your liking, and feature your top properties.

The Building of Brand Loyalty

You can brand your website however you want! Your website should reflect your brand (in terms of colors, look and feel, as well as your brand persona), and you can control exactly how to market your listings. Eventually, this is going to lead to easier brand recognition and is one of the main building blocks of brand loyalty.

Disadvantages of Direct Booking for Property Managers

You cannot screen your guests based on reviews like you can on Airbnb

One of the best features that come with OTAs is their review systems, both for the guests and for the hosts. Without these, you won’t be able to screen your guests beforehand and make a decision based on their profiles and their reviews as guests.

It’s harder to get reviews

In order to get reviews for your property from these guests, you’re now going to have to send them to your TripAdvisor profile. There are some things you can do to inspire them to write reviews, however, which include:

• Sending an email after their stay, prompting them with a link to write a review on TripAdvisor
•  Printing out Reminder Cards and leaving them at the property
•  Sending them a quick message reminding them to review your property on TripAdvisor

No Host Guarantee

One of the main disadvantages is losing the Host Guarantee which Airbnb and HomeAway both offer. The Host Guarantee provides protection to hosts for damages that may occur during rare instances of guest damages that go over and above the security deposit.

Without this, you’ll definitely need to make sure to have an accurate security deposit in place, to ensure that you’re covered in case of damage. It’s also important to note, though, that you don’t usually get a Host Guarantee on all platforms; for example, Booking.com doesn’t offer that with your reservations.

You need to invest some time to set up and maintain your website

Setting up a website takes time, effort, and dedication. You will need to invest that amount of time and energy into creating a website that truly captures the vibe of your property and features your listings effectively. You’ll also need to find a good way to sync rentals on the website if you’re still posting your property on other OTAs as well.

It’s not cheap

It will usually cost you around $2k-5k to build a fully-functioning direct-booking website with a professional. However, you can do it right now for only $799 one-off by using our Website Builder Product – learn more here

How to Make Sure Your Website Stands Out

Did you know that websites usually have around eight seconds to make an impression on a user? Yep. Not an easy task there!

Here’s how you can make sure to make a good impression:

• Prioritize having an incredible gallery for your properties – Make sure that you hire a photographer to take professional pictures of your property, and hero them on the front page. Keep your pictures regularly updated, and always make sure that your website highlights the best features of the property and the surrounding area.
• Engage with other travelers on Instagram, Facebook, and Travel Forums – You’re going to need as much exposure as possible, so be sure to hop online and share your property’s story and website on social media, to help drive traffic and bookings.
• Encourage reviews – The more positive reviews you have, the better! Make sure you send review reminders and offer discounts for repeat stays, to encourage regular guests and higher guest retention.
• Advertising – You’ll need to invest in advertising your website through re-targeting, pop-ups, CTAs, boosted posts, and content.
• Make sure your website is SEO optimized – Your keywords and content are going to be driving factors in bringing people to your website and converting them into direct bookings.
• Make sure you have an Airbnb Booking Sync Software in place – If you’re still going to be posting your property on Airbnb and Booking, for example, while also simultaneously using your website, then you absolutely must make sure you have a software in place to avoid the dreaded double-booking.

A Few Last Words

In the end, creating a vacation booking direct website is the ultimate channel for you to have. It’s not just a place to market your rentals, it’s a place where you will make your own. You will be able to create a whole brand story for your property and build superb brand loyalty in the process.

Of course, as an independent property manager, balance is key. It makes complete sense to balance both direct bookings, along with utilizing direct third-party OTAs, and manage them simultaneously through a rental calendar sync software.