Dan Lynn, CEO of Zuzu, discusses strategies for hotels to increase direct bookings. He argues that third-party booking sites can make sense as a distribution channel given high costs of driving direct traffic. Lynn advocates focusing on increasing "repeat direct share" rather than direct share alone by retaining customers through personalized service, competitive differentiation other than price, and retargeting marketing including brand keyword bidding, price assurance widgets, owning the Google presence, site remarketing, and remarketing lists for search ads.

1. DAN LYNN
CEO,ZUZU
Direct is best…
except when it’s not

2. What I’m going to talk about
1. Why third parties, such as Booking.com, make sense
as a distribution channel
2. How you should think about incrementality, and
move towards thinking about ‘Repeat direct share’
rather than direct share
3. To-do list to drive ‘Repeat direct share’

3. Direct is best
• No channel commissions
• Highly customized to your property
• Direct relationship with the traveller from
pre-trip thru post-trip

4. The big chains have run massive campaigns to this effect

5. Direct share is stagnant

6. Direct share is or even declining

7. Your competing against monsters

8. Your competing against monsters
5.3 5.1
Expedia Group Booking Holdings
Sales and marketing spend, US$Bn, 2017
53% of
revenue
40% of
revenue

9. It runs against consumer behavior
73%of first travel searches
worldwide were generic, with no
brand or destination mentioned
(Source: ComScore)

10. It runs against consumer behavior
30,400,000
monthly Google searches for ‘hotels’
165,000
monthly Google searches for ‘bangkok hotels’
6,600
monthly Google searches for ‘hotel muse bangkokls’

11. It runs against consumer behavior
6,600
monthly Google searches for ‘hotel muse bangkok’
6,600
monthly Google searches for ‘dream hotel bangkok’
880
monthly Google searches for ‘maduzi hotel bangkok’

12. Which makes it very costly to drive direct

13. Which makes it very costly to drive direct
Generic $2-5
Destination $2-5
Destination + luxury $2-10+
‘property name’ $0.5-3
Huge
Large
Small
Very small
VolumeCost per click
Irrelevant
Probably irrelevant
Relevant
Very relevant
Relevance

14. Competing requires high conversion
$100
$200
$300
$17.50
$35.00
$52.50
Channel
‘hotel net’ADR
$3.50
$4.00
$4.50
Direct CPC
Channel
commission
$82.50
$165.00
$247.50
20%
11%
9%
Required conversion
to match
$400 $70.00 $5.00$330.00 7%
$500 $87.50 $5.50$412.50 6%

15. Competing is uneconomic
20%
11%
9%
Required
conversion
to match
$100
$200
$300
Channel
‘hotel net’ADR
$82.50
$165.00
$247.50 4%
Typical
conversion of
Google Hotel
Ads traffic
Achieved
‘Direct
hotel net’
$12.50
$100.00
$187.50
7%$400 $330.00 $275.00
Gap
-85%
-39%
-24%
-17%
6%$500 $412.50 $362.50 -12%

16. Incrementality is key
• Brand-loyal/
searching
customers
• Repeat customers
= Retention (ish)
 New customers
 Far-flung customers
 Competitors
customers
= Acquisition

17. Move from focus on direct share
Sales
Direct
3rd party
Sales
Direct
3rd party
N=10,000 N=8,000

18. Move from focus on direct share
3rd party
Direct
N=10,000
6,000 3rd party
Direct
N=10,000
5,500
4,500
60%
40%
55%
45%4,000

19. 3rd party
Direct
New Repeat
3rd party
Direct
New Repeat
To focus on repeat direct share
N=10,000
4,0002,000
2,000
N=10,000
4,0001,500
3,500 1,000
66%
33%
75%
25%2,000

20. Retention (ish) marketing actions
Pure retention
Quasi retention (retaining
interested new customers)
• Gather data pre- and in-trip
• Differentiate your product
• Stay-in-touch
• Compete on something other
than price
• Brand keyword bidding

21. ‘Hotel name’ keywords

22. ‘Hotel name’ keywords
Yes 2nd
Yes 1st
Yes 1st
No
No
No
No
Yes 1st
Yes 1st
No
Yes 1st
Yes 1st
Yes 1st
Yes 1st
Yes 1st
No
Yes 2nd
Yes 1st
Yes 1st
Yes 1st
Yes 1st
Yes 1st
Yes 1st
Yes 1st
Yes 1st
No
Yes 3rd
Yes 1st
Yes 1st

23. Retention (ish) marketing actions
Pure retention
Quasi retention (retaining
interested new customers)
• Gather data pre- and in-trip
• Differentiate your product
• Stay-in-touch
• Compete on something other
than price
• Brand keyword bidding
• Price assurance widgets

24. Price assurance

25. Retention (ish) marketing actions
Pure retention
Quasi retention (retaining
interested new customers)
• Gather data pre- and in-trip
• Differentiate your product
• Stay-in-touch
• Compete on something other
than price
• Brand keyword bidding
• Price assurance widgets
• Own your Google presence

26. Google presence

27. Retention (ish) marketing actions
Pure retention
Quasi retention (retaining
interested new customers)
• Gather data pre- and in-trip
• Differentiate your product
• Stay-in-touch
• Compete on something other
than price
• Brand keyword bidding
• Price assurance widgets
• Own your Google presence
• Site remarketing
• Remarketing lists for search ads
(RLSA)

28. Remarketing

29. Remarketing

30. Remarketing

31. RLSA - https://support.google.com/google-ads/answer/2701222?hl=en

32. Retention (ish) marketing actions
Pure retention
Quasi retention (retaining
interested new customers)
• Gather data pre- and in-trip
• Differentiate your product
• Stay-in-touch
• Compete on something other
than price
• Brand keyword bidding
• Own your Google presence
• Site remarketing
• Remarketing lists for search ads
(RLSA)

33. What I talked about
1. Why third parties, such as Booking.com, make sense
as a distribution channel
2. How you should think about incrementality, and
move towards thinking about ‘Repeat direct share’
rather than direct share
3. To-do list to drive ‘Repeat direct share’