In September, Four Seasons Resort Nevis in the West Indies introduced a package with an ulterior motive: to rely less on online travel agencies to fill rooms. The “Nevis Festive Air & Sun Caribbean Package” includes a four-bedroom villa (sleeping up to eight) for seven nights, $1,000 food credit and nonstop flights out of New York City. While the price tag is steep ($170,000), divided by eight people it’s more manageable, and though it’s more costly than booking through an OTA, an OTA can’t compete with the package’s sheer luxury.
All-inclusive resorts are the ones typically offering one-click shopping. By bundling air and hotel, it’s easier for guests to say “yes.” These packages directly compete with OTAs. Airlines, too, are beefing up their vacation packages to keep customers off of sites like Expedia and Orbitz. And cruise lines continue to offer one-stop shopping. Should more hotels be in on the game, too?
Within the past two years, more and more independently owned hotels, as well as properties tied to a brand, such as Marriott Inclusive Vacations and Vacations by Marriott, are starting to bundle airfare and hotel rates.
In 2014, Coconut Bay Beach Resort in Saint Lucia—and sister resort Serenity at Coconut Bay—rolled out a vacation package that includes air and hotel. The goal was to further compete with OTAs by offering direct booking on the resort’s website. “We recently switched from Orbitz to our new booking-engine provider ReservHotel,” said Natalia Greene, director of marketing. “We like to provide the option to make their booking process simple and seamless and hopefully also speed up their decision making.”
Family-owned Bolongo Bay Beach Resort in St. Thomas, U.S. Virgin Islands, has long offered bundled air and hotel—and has no plans to stop. “It makes it a one-stop shop, a convenience to our guests, which is the reason guests use OTAs,” said Katarina Doumeng, the resort’s director of sales and marketing. “Like OTAs, we offer trip insurance, but we can also add extra amenities, like sailing trips, dive passes, honeymoon packages and fruit baskets, which they cannot get on OTAs or through traditional wholesalers.”
Find Your Target
On the fence about whether to employ this strategy? Stuart Butler, COO of Fuel Travel Marketing, cautions hotels to first consider their target audience. What the guest is looking for is an easy, simple experience that often includes hotel transfers, meals, drinks, airfare and the room, he said. Aria, part of MGM Resorts in Las Vegas, created Aria Vacations—including air and hotel in quoted rates—to spur more direct bookings. Booking through MGMResortsVacations.com yields not only one bill but also such offers as two free breakfast buffets with a two-night stay.
“They’ve done an excellent job bundling the deal and they’re winning, that’s for sure,” Randy Bonds, co-founder of digital marketing company Magnetic Strategy, said about OTAs. But this strategy might not work for every property. “It really depends on the geographic location. A lot of domestic locations aren’t profiting from these kinds of deals,” Bonds said, pointing to Mexico’s Riviera Maya as a destination where it works well, especially because hotel transfers tend to run $150 to $200 per person (and should be included in the bundle). The same could be true for Los Cabos, Mexico, where Hacienda Encantada Resort & Residences introduced a bundled package five years ago. Flights booked through the property lead to a 10-percent discount on any suite or villa—an easy fix when you can’t adjust the airfare.
If the prospect of bundling seems daunting, consider another way to compete with OTAs that offer air and hotel for a flat fee. Add value-added services to any direct bookings, Bonds said, like free parking, internet and daily breakfast. “As far as a single hotel, it’s very expensive [to bundle],” he said. “That puts them at a disadvantage.”
One exception, said Mike Murray, CEO of TripCraft and Vir.al, is if a destination is served by only one or two airlines, or a majority airline. Airline seats might be easier to obtain, or negotiate a price on. “People are just so used to shopping for packages and hotels don’t have the inventory or flexibility that Expedia has with airlines,” Murray said. “OTAs have a lot more buying power.”
Another way to inspire more direct bookings is to beef up local-destination content on the hotel’s website. “The OTAs don’t have that same kind of knowledge about destinations,” Murray said. “It’s your home away from home and it’s not a commodity purchase. It’s not just a bed with a cheap rate.”