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Good or evil: Preferred Plus program

Preferred Plus program: New offer for hoteliers. Preferred Plus program didn’t start yesterday, yet many hotels in different regions became aware of this program in the last month when started to notify their clients.

In brief, what is the offer?

Preferred Plus is a variation of the Preferred programs that helps hotels get better visibility on the platform. On the partner portal, the platform reminds that seal of approval “thumbs-ups icon” and better listing can lead to Preferred Partners getting up to 65% more page views and ultimately 40% more bookings. Although, no numbers are given for Preferred Plus.

Except, the main one – the commission amount for Preferred Plus partners. Better visibility and more clicks will cost 23%.

Future of hotel online distribution

Online distribution is not getting any cheaper for hoteliers. Hoteliers who have been in the market for a while, have seen the steady growth of commission size from regular 15% to 18% for the Preferred program. Now costs are up for 5 % more. and other OTAs help hotels a lot to gain international visibility and to attain more guests. Yet, is the pandemic the best time to increase fees and commission for hotels?

Some hoteliers with whom we spoke, afraid that the Preferred Plus program will reduce the efficiency of the Preferred program. Therefore, hotels would be forced to move to higher payment in order to stay on the same level of sales through this channel. The second option would be losing the significant sales share.

Although, the positive thing is that it might give some short-term visibility boost for hotels and help hoteliers to improve their sales in the after-COVID-19 phase. In the long run, it’s not good for the industry. More likely, other OTAs will join the trend and will try to earn more from hoteliers.

Looks like there can’t be a better moment for hotels to focus on direct bookings.

3 reasons why should hotels focus on direct sales

First, as mentioned above, the commission for online distribution for all channels is not going to drop. Online distribution costs will rise and spend as one-fourth of the room rate won’t be an exception.

Second, OTAs prevent hoteliers to have direct contact with the guest and limit the chances to build loyalty during pre-stay and post-stay.

Third, for hoteliers, it is harder to encourage guests to return to your hotel, if the guest came from OTA. Guests stay loyal to the platform, not to your hotel.

Contacts us and let’s create a plan on how to enhance the direct channel for your hotel!