As the recent changes to health and safety legislation in Australia starts to bite TMCs and corporates are starting to actively focus on the issue of hotel leakage.
For the uninitiated, hotel leakage happens when an employee uses an Online Booking Tool (in our case Serko Online) to book flights, but leaves the OBT without booking a hotel. On average 50% of bookings that have an over night requirement don’t have any accommodation attached, which means hotel leakage is a big problem – not only for corporates that need to know where everyone is, but also for TMCs who are missing out on rebates and commissions.
Of course there is a myriad of perfectly legitimate reasons why users might not book a hotel – for example, at the time of booking flights they might now know where in Sydney they need to go, they just know that they need to go to Sydney. As long as they use the OBT to book their hotel when they do know where they need to stay then everything should be fine, but the reality is that they don’t. And worse than that, there’s a whole group of users that deliberately leave the safety and comfort of the managed portal and head out onto the Internet to book their own accommodation. But why?
It’s a good question, and one that our friends over at Expedia Affiliate Networks sought to answer. They interviewed a substantial number of travel bookers in the USA to find out why they booked their accommodation outside of the OBT. The results are fascinating:
(note that users could select more than one answer in the survey, which makes the total tallies to more than 100%)
Despite the fact that the survey was conducted in the US, we believe that the results are directly relevant to the local Australasian market. Let’s face it, there’s nothing in there that doesn’t ring true, right?
So, with insight into the reasons why bookings leak, the obvious question is "who can do what to affect it? It’s in the interests of corporates to change booker behavior as the more they leak the more money they lose (trust me, the hotels that employees are booking offline are no where near as cheap as they think they are, particularly after they’ve changed their dates and had breakfast…) and it’s in the interest of TMCs to change behaviour as the current framework is costing them a lot of money.
From an OBT perspective there’s an obvious solution – identify the leisure-centric supply channels that users are turning to and integrate them into the managed portal. As a user, if I can access and book the Booking.com inventory that I like without leaving the online booking tool, then why wouldn't I book it at the same time as my air segment? After all, if it’s booked through SOL I know that a) I’m not going to get in trouble and b) it’s less maintenance for me when my trip changes – which it will, because it always does.
So, with the leisure content supply channels aggregated inside Serko online:
Of course, making the leisure aggregators available through Serko Online won’t solve the leakage problem completely, because someone always wants to stay with their Mum, but it should hopefully make a huge dent in, which is to the benefit of everyone involved.