The Little Box That Is Costing Hotels Millions

September 14, 2015 • By

blog

Modern travelers are savvy, deal-seekers.

If a hotel deal exists, they’ll find it, use it, then expect it every time.

Such is the case with that prominent "promo code" field found on practically every hotel’s booking engine. Widely used by hotels (check out the example from Hilton above) to close the gap during slow periods, to compete with deal-heavy OTA rates and to entice travelers to book direct, promo or discount codes also hold dire consequences when it comes to getting travelers to book at all.

The Perils of Promo Codes

Think promo codes are a magic bullet that will give travelers that extra shove to make a reservation? Think again. Here are some of the most likely scenarios you’ll face instead:

After researching for hours for the perfect hotel for her family’s next vacation, a mother finally makes the decision to stay with you. She goes to your site, plugs in her vacation dates and selects a room type. She’s almost done – all she has to do is fill out her information and reach for her credit card. Then, she sees the box asking for a promo code.

“Oh, there’s a promo code?” she asks herself. “Where is it? How big of a discount can I get? I better find it so I can save money.” She tucks her credit card back into her wallet and opens a new window in her browser in order to search for the elusive promo code. Then, it goes from bad to worse.

She has already abandoned her initial reservation and left your site, even as she was in the final stages of booking. In fact, a study by ComScore showed that 27 percent of online consumers end up abandoning shopping carts in order to go search for a coupon or discount.

She’ll find a discount for your hotel from another site, perhaps even an OTA, since she is now convinced that your published rate is too expensive and that she can get a room there for cheaper.

Her search may lead her to another property entirely, where she’ll end up booking instead because she’s convinced they’ll have a better deal.

She’ll find a promo code, use it, then expect a similar special offer for all future visits. 

That prominent discount or promo code field makes online visitors doubt their purchase decision and will convince them that, if they look hard enough, they can get money off of the room rate. If they’ve made it far in the booking process, which is usually the case since that is where promo code boxes are placed, that means they were likely dead set on completing the reservation before the call for a promo code changed their mind. 

There IS a place for promo codes in smart hotel marketing. Here’s how to use them:

1. Lure Back Unfinished Reservations

When travelers don’t complete their reservations, which can happen for several reasons, lure them back by offering a promo code through your reservation abandonment system and retargeting ads. This way, promo codes will only be shown to a highly engaged audience and will not show up in search results across the web. Use the principle of scarcity to make this even more appealing by adding a deadline to use the promo code before it expires. For example, “Come back and complete your booking within 24 hours and we’ll take 15% off.”

2. Create Your Own Page of Current Promos and Link Back to It

Macy’s has a brilliant solution to keeping shoppers on their Website while they’re looking for promo codes. Next to their Promo Code box, they invite shoppers to take a look at all of their current promotions and provide a convenient link to the list of codes. In your hotel’s case, include a direct link back to your special offers page where travelers can look at all of the promos you have available at the moment. By offering an internal link to your own promotions, you’ll reduce the number of visitors who would have abandoned their reservation to search for a discount or promo code on another site. Plus, you’re also showing transparency to the guest by letting them know you are willing to help them find travel savings.

3. Track and Measure Advertising ROI

You can use coupon and promo codes to track and measure the success of your advertising. The concept is easy – just publish a different code for your different ad buys. For example, use a different code in your email marketing than your Facebook and pay-per-click. This way, you can track how many sales are generated from your various media placements.

4. Get Rid of the Promo Code Box All Together and Replace With Auto-Fill

Customize your advertising links so that, if there is a promo code available, the inbound ad link in your website will take prospects directly to your booking engine where the promo code will automatically be plugged in. This way, you don’t have to have the promo code box on your website at all. Which means, shoppers won’t leave your site to go find a discount somewhere else on the Web.

About Tambourine

Tambourine uses technology and creativity to increase revenue for hotels and destinations worldwide. The firm, now in its 33rd year, is located in New York City and Fort Lauderdale. Please visit: www.Tambourine.com

Direct Bookings, Guest Experience, hotel marketing, Hotel Marketing Advice, Mistakes to Avoid, Online Bookings, Promo Codes