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It's all about direct bookings: Interview with Ákos Gyenes, RESnWEB

Direct bookings serve as the cornerstone of profitability for hotels However, the role of online travel agencies (OTAs) cannot be overlooked. Increasing the ratio of direct bookings is essential for maximising profitability in the hospitality industry. To dig deeper into the importance of direct bookings, we turn to Ákos Gyenes, an esteemed economist with over two decades of international hotel experience. Ákos is not only the founder and lead expert of RESnWEB but also the co-founder and revenue management director of Everguest. His expertise extends to providing trainings to hotels and properties in Hungary and beyond.

 

Tell us about yourself and your professional background.

I graduated as a tourism economist in 2001 and have since worked in various hotels in Hungary and abroad. My roles have ranged from front desk supervisor to hotel director, giving me a comprehensive understanding of hotel operations.

During my time at Sofitel Budapest, I gained valuable experience in revenue management and online distribution, which laid the foundation for my later ventures.

In 2010, I co-founded RESnWEB, a company providing real-time booking solutions for independent hotels. I've been working as an expert lead at RESnWEB since its inception, and I currently serve as the director of revenue management at Everguest, which launched in 2020.

In addition to my roles at RESnWEB and Everguest, I also work as a consultant for several hotels, specialising in sales, marketing, and general operations advice.

Don't you miss the front office?

With my current responsibilities, I spend several days a week in hotels. While I don't particularly miss standing behind the front desk, I still maintain a strong connection to the industry. Working at the front desk was like playing on the field, but now I'm more focused on giving advice from the sidelines, using online solutions and consulting to help hotels perform better.

You’ve worked for over 20 years in the hotel industry. What motivates you to stay in this business?

I'm among the few who pursued studies in tourism and have remained dedicated to this industry over the years. I find motivation in my constant need for change throughout my career. Whether it is adapting to differences between hotel categories, exploring opportunities domestically or internationally, or transitioning from the front office to revenue management, each new challenge has kept me engaged.

The opportunity to create my own business provided a unique source of motivation, and my role at Everguest in recent years has further fueled my passion for the industry. I've always been drawn to new challenges, and the progression of my career has been fortunate enough that each change has built upon the last.

Can you tell us more about RESnWEB?

Back in 2010, there was a notable absence of real-time booking solutions tailored for independent hotels. Recognising this gap, RESnWEB emerged as a new solution, offering a comprehensive package that hotels could seamlessly integrate into their websites.

Prior to its founding, I collaborated with a small IT company from Veszprém, serving clients in the hotel industry. During this time, the idea for RESnWEB took shape, sparked by the question of how we could streamline the booking process for hotels, moving away from manually handling offers. RESnWEB operates at the intersection of the IT and hotel industries, with a dedicated team comprising developers and customer support staff. This unique blend allows us to address technical queries and offer valuable insights rooted in our understanding of hotel operations.

Our primary objective is to empower hotels to boost their direct sales. We provide innovative solutions to our partners that simplify their daily operations and save working hours and human resources while improving their direct booking ratio and ultimately their profitability.

What is the value of direct hotel bookings, in your opinion?

Direct bookings play a crucial role in maximising hotel profitability. Unlike indirect bookings facilitated through online travel agencies (OTAs), direct bookings typically result in higher profit margins. This is because commissions paid to OTAs for indirect bookings can significantly reduce the price margin, ultimately impacting the hotel's revenue. By encouraging direct bookings, hotels can retain a larger portion of their revenue, improving profitability over time.

What is the main difference between direct bookings and the ones made through OTAs?

Direct bookings and bookings made through online travel agencies (OTAs) differ in several key aspects. While it's essential for hotels to have a presence on major OTAs due to their significant brand recognition, direct bookings offer distinct advantages.

From the guest's perspective, the journey often begins with a search on OTAs, where they find accommodation options that match their preferences. However, more than half of these guests continue their search on platforms like Google, hoping to find better prices or additional perks. If they find the hotel's website through this process, it's a successful transition, often called the billboard effect. Studies have shown that about 20% of direct bookings originate from OTA searches.

In the competitive market, price tends to be the ultimate deciding factor for guests. There's a constant battle between OTAs and direct providers to offer the most competitive prices. OTAs often employ various tactics, such as the Genius program on Booking.com, virtual wallet points, and discounts, sometimes without the explicit consent of hotels. It's essential to note that hotels may activate OTA promotions that aren't available on their own websites. The key takeaway here is clear: if a hotel offers a cheaper rate through an OTA than directly, it risks significantly undermining its direct sales.

How can hoteliers boost their direct bookings?

To begin with, hotels need to understand their current ratio between direct and indirect sales by utilising proper, trustworthy statistics.

Effective direct marketing is paramount, tailored to the unique characteristics of each hotel, including size, category, location, target audience, guest satisfaction metrics, and percentage of returning guests. Paid Google campaigns targeting the hotel's own brand name are essential, even with a minimal budget. Without such campaigns, search results for the hotel's name may be dominated by ads paid by OTAs and metasearch platforms, significantly reducing the likelihood of direct bookings. In fact, studies suggest that the top 3-4 paid results capture around 80% of clicks, leaving only about 20% for organic search results, leading to a decrease in direct bookings.

Once a visitor lands on a hotel's direct website, the quality of the website becomes crucial. It should be optimised for user experience, with attention-grabbing visual content, short loading times, and user-friendly navigation. Unlike OTAs, hotels have the advantage of providing a segmented approach on their websites, catering to the specific needs and preferences of different types of travellers. For example, business travellers, families, couples, and groups of friends have unique requirements. By offering relevant information upfront, such as child menus, playgrounds, and children's pools for families, hotels can enhance the user experience and increase the likelihood of direct bookings.

High-quality visual content, including images and videos, also plays a significant role in influencing online booking decisions. Hotels should ensure that their services are showcased through compelling visuals to attract potential guests.

While there are various methods to gain a competitive edge for direct bookings, ultimately, a simple booking process and offering the best price are crucial factors. If guests encounter the same price on the hotel's website as on OTAs, there's no guarantee they will book directly.

In addition to offering the best price, hotels should transparently communicate the benefits of booking directly to inspire guests. These incentives may include free or discounted services, better booking conditions, or participation in a loyalty program.

It's important to note that direct bookings also rely on the efforts of staff involved in the sales process, including front desk and booking staff. During phone calls and email communication, it's their responsibility to recognise opportunities for direct bookings and guide the conversation towards a sale.

RESnWEB offers more than just a booking engine. With additional modules such as the proposal sending module, gift voucher module, and guest loyalty program module, we provide measurable solutions that significantly contribute to online marketing efforts. These modules not only streamline operations but also help save valuable working hours and reduce the margin for error.

Moreover, our dedicated customer support staff is a source of pride for us. They consistently receive positive feedback from customers for their exceptional service. Accessible through various channels, our support team leverages their extensive hotel experience to go beyond simply answering queries. We provide professional advice and offer comprehensive explanations of the effectiveness of certain settings or why a particular direction may be more beneficial for the client.

RESnWEB is also available as an integration in SabeeApp PMS. Can you tell us about this collaboration and how it helps hotels?

SabeeApp offers a range of useful functions within its comprehensive software suite. For hotels already utilising SabeeApp but seeking additional booking engine functionalities (like proposal sending, guest loyalty programs, and gift vouchers), RESnWEB integration is a great solution. This integration enables hotels to access RESnWEB's extended features while benefiting from SabeeApp's core functions, such as the PMS, Channel Manager, and GuestAdvisor Tool.

What's the next big leap in booking engine technology in the short term?

The next big step in booking engine technology is likely to be driven by artificial intelligence (AI). Customisation will significantly improve, offering a more personalised solution for different types of users. AI can revolutionise the booking process, tailoring the platform to provide relevant information based on user preferences. Despite challenges from a developer's perspective, leveraging AI alongside human resources will lead to greater success and profitability in the long run.

 

Final words

Thank you, Ákos, for your insightful responses. We've gained a comprehensive understanding of the importance of direct bookings and the opportunities they present. Increasing direct bookings is a priority for all hosts and hotel managers. Various factors influence direct bookings, but with careful planning, an open mind, and attention to detail, we can unlock numerous growth opportunities.

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