Loyalty, direct booking and building your own channel

Thursday mid-morning, the monthly channel scorecard (lesson 43’s routine). Daniel’s eye catches on a row in the repeat-guest list: the Webers — a couple from abroad, here for the first time last autumn, a second time in spring, and now booked for September a third time. All three times on Booking.com.

He calls over to Esther, the marketing manager: “Look at this. The Webers are coming for the third time — and for the third time we’re paying the 18% commission on them. Two nights at 112 EUR, that’s forty euros per stay to Booking. Across three stays we’ve paid more than 120 euros for our own regular guest to find their way back to us.”

Esther: “So why don’t they book with us?”

Daniel: “Turn the question around: why would they? Our website shows the same rate — and on Booking they even get a loyalty discount, with us nothing. Their card is saved in the app, the whole thing is one click. Booking has built a loyalty programme on our guest. We’ve built nothing.”

That sentence is the core of this lesson. A repeat guest who books on the OTA isn’t being “disloyal” — they’re being rational. Nothing ties them to the direct channel: no better rate, no benefit, no relationship. In lesson 43 we calculated how much more a direct guest is worth; this lesson is about how to get more of them — with a member rate, direct-only benefits and a long-term own-channel strategy.

Why does “our guest” book on the OTA?

Before we talk about tools, let’s understand the guest’s side. The OTA offers three things most hotel websites don’t:

• Convenience — a saved card, a familiar interface, all their trips in one app.
• A discount — the OTA’s own loyalty programme (e.g. Booking.com’s Genius tiers) gives the guest an immediate, visible rate advantage. The irony is complete: the OTA binds the hotel’s guest to itself with a loyalty programme financed out of hotel rates.
• A sense of safety — customer service, a familiar cancellation flow, “if something goes wrong, the platform is there”.

Against these, the direct channel is only competitive if the guest gets something they cannot get on the OTA. That is the founding principle of building your own channel: we are not fighting the OTA (from lesson 43 we know that in the low season the OTA is a valuable, paid guest-acquisition channel) — we are fighting so that the second and third stays no longer cost commission.

The direct-steering toolkit

1. The member rate — the closed discount

The member rate is the most important pricing tool of direct steering: a discount that only a closed group receives — newsletter subscribers, registered or logged-in users. The closedness is not marketing decoration; it is the essence of the construction, for two reasons:

• Rate parity: the parity clauses in OTA contracts (we know them from lesson 7) apply to the public rate — the rate shown publicly on your own website typically must not undercut the one displayed on the OTA. A rate given to a closed group, behind a login or list membership, is however not a public rate in the established industry reading — so the member rate gives the direct channel a price advantage while the public BAR and lesson 44’s rate bridge remain untouched. (The exact boundaries are always set by the wording of the specific contract — which is why the closedness must be taken seriously technically, too.)
• Cannibalization protection: the closed circle is targeting in itself (lesson 46’s logic) — the discount doesn’t spread across all demand.

2. Direct-only perks — the value asymmetry

The perk (a small, tangible benefit) is the member rate’s natural companion, built on lesson 46’s value-add logic: low marginal cost, high perceived value.

Three such perks together add 40-60 EUR of perceived extra value to the direct booking for a few euros of actual cost — granting the same amount as a discount would cost several times more.

3. The book-direct message on your own website

A significant share of guests find us on the OTA, then search for the hotel by name (the billboard effect mentioned in lesson 43) — and the website is where they decide where to book. This is the moment to catch: a rate-comparison message next to the booking engine (“guaranteed best rate with us + late checkout”), the member rate’s registration point and the list of direct benefits. If the website shows the same rate with no extra, the guest rationally goes back to the OTA.

4. Converting the OTA guest in-house

We said it in lesson 43: the OTA brings the first stay; the second is ours to win. Conversion is not a poster but a process, with four touchpoints:

1. Check-in: asking for the email address with a natural reason (“we’ll send the invoice by email”) + opt-in (explicit consent to be contacted) — with a front-desk script, not improvised. A realistic goal: it works at 30-40% of check-ins.
2. During the stay: recognising the repeat guest — the front desk sees the guest history and greets them by name, at the “glad to have you back” level. This is free, and it is the emotional foundation of loyalty.
3. Check-out: a concrete, tangible offer for the next visit — “register for the member rate: −8% and late checkout whenever you next book with us.” On a card or via QR code, ten seconds.
4. After the stay: a thank-you email within 48 hours with the member registration link, then — once in the CRM (the guest-relationship system) — a segmented newsletter, with lesson 31’s timing logic: a low-season offer goes to the list, not “a monthly newsletter to everyone about everything”.

The economics of the member rate — let’s work it through

Here is the backbone of the lesson. Esther asks the obvious question: “But if we give members −8%, aren’t we cutting exactly the revenue?” Let’s look at it in lesson 43’s net ADR framework (net ADR = what remains of the gross rate after deducting channel costs).

Hotel Peaqplus City’s member rate: BAR −8%. The guest comes from our list — a newsletter click has no advertising cost, so the CAC (customer acquisition cost) is zero. The Booking column and the from-ads direct column are familiar from lesson 43’s June table:

The member column step by step:

1. Member gross: 105 × 0.92 = 96.60 EUR
2. Booking engine 2%: 96.60 × 0.02 = 1.93 EUR
3. Card fee 1.2%: 96.60 × 0.012 = 1.16 EUR
4. Net: 96.60 − 1.93 − 1.16 = 93.51 ≈ 93.5 EUR

The result is surprising at first: even with the −8% discount, the hotel earns 3 euros more per night (93.5 vs. 90.5) than if the same guest had booked on Booking. The discount costs less than the commission saved — and on top of that, the guest relationship (email, preferences, stay history) stays with the hotel.

But — and this is the other half of the number — the member rate is only a gain if the guest’s alternative really was the OTA. If a guest arriving from the list would have booked direct at full BAR without any discount, that booking’s net value is 105 × 0.968 = 101.6 EUR/night (no CAC, only engine + card fee) — giving them a member rate is a loss of 8.1 EUR per night. This is lesson 46’s cannibalization lesson in a member edition: the member rate is a tool for pulling over the OTA-habit guest — which is why it is closed, why it lives in newsletter campaigns, and why it doesn’t push itself in front of the guest who would come direct anyway.

The second layer: the email list as an asset

The member rate on its own is just pricing — its engine is the list. Hotel Peaqplus City’s list currently holds 8,000 addresses. What is that worth?

With conservative assumptions: 2% conversion a year (from lesson 31: email marketing typically converts at 1-3%) = 160 bookings, at 2 nights on average. If those bookings would otherwise have landed on Booking:

• First stay: member 2 × 93.5 = 187 EUR vs. Booking 2 × 90.5 = 181 EUR → +6 EUR/stay → 160 × 6 = 960 EUR/year.

Modest on its own. The real value sits in the second layer we know from lesson 43: 28% of direct guests return within two years, versus only 10% of OTA guests. In two-year guest value (conservatively pricing the return stay at the member rate as well):

• Member guest: 187 + 0.28 × 187 = 187 × 1.28 = 239 EUR
• Booking guest: 181 + 0.10 × 204 = 201 EUR (lesson 43’s calculation)

The difference is 38 EUR per guest — projected onto the annual converted cohort of 160, that is 160 × 38 = 6,080 EUR of two-year surplus value. Deduct the newsletter/CRM tool’s annual fee (~1,500 EUR): in the order of ~4,600 EUR remains — from a single year of list work, while the list keeps growing. On top come the things we didn’t count here: the direct guest’s higher ancillary spend (per lesson 30, the addressable guest arriving through your own channel is easier to steer to dinner or the spa), and the fact that a member guest’s LTV (lifetime value — the guest’s total lifetime worth) keeps producing beyond year two.

The takeaway: the list is not a marketing by-product but an asset — the only distribution tool the hotel owns, and one whose return compounds.

A loyalty programme in an 80-room hotel

At the weekly meeting, Adam asks the obligatory question: “Should we run a points-based loyalty programme, like the chains?”

At an 80-room independent hotel the answer is almost always no — the economics of a points-based programme depend on scale. It works for the chains because a guest collects 15-30 nights a year across the network; in a city hotel, a regular comes 1-3 times a year. The burdens of a points system — tracking the redemption liability, IT, administration, communicating “what a point is worth” — don’t pay off at that frequency.

What works instead is a recognition-based programme: not collecting, but immediate, tangible benefits and being recognised.

• A maximum of 2-3 tiers — e.g. member (immediately upon registration: member rate + welcome drink) and regular (from the 3rd stay: + upgrade priority, guaranteed late checkout).
• The benefit lives at arrival, not in a future points balance — the guest experiences on every visit why booking direct is worth it.
• Administration-light: the tier is kept on the guest profile in the PMS, the front desk sees it, no separate system needed.

A formal, points-based programme is justified where visit frequency is high (chains, a heavy business mix, 200+ rooms). At Hotel Peaqplus City’s size, the member rate + CRM + recognition trio delivers most of a points programme’s value at a fraction of its administrative burden.

Channel-mix evolution — the long game

Direct steering is not a campaign but infrastructure — and its effect is measured in years, not weeks. Daniel and Esther set a three-year target path (the starting point is lesson 43’s June mix: OTA 65%, direct 20%, corporate 15%):

What is each step worth? Out of the hotel’s ~21,600 sold nights a year (lesson 43’s June 1,800 nights at an annual run rate), shifting 5 percentage points is ~1,080 nights — at the net difference between Booking (90.5) and the member rate (93.5), that is ~3,200 EUR/year of direct surplus per step, before any repeat effect. By the end of year three, the cumulative 15 pp shift produces close to 10,000 EUR of net surplus a year — and that is a lasting return, not a one-off campaign result.

Two rules of discipline come with it:

• Quarterly measurement with lesson 43’s channel scorecard: mix shares, list growth, opt-in rate, member conversion. What isn’t measured isn’t a strategy — it’s an intention.
• Patience: the mix shift is a slow, compounding process. Whoever shuts it down after six months with a “it’s not working” label exits right before the compounding phase.

Back to the Webers

In September the Webers arrive for the third time — still on a Booking reservation. But now the process is running: the front desk greets them by name, at check-out they receive the member offer (−8% + guaranteed late checkout), and Esther’s thank-you email is in their inbox the next day, registration link included.

Their fourth stay, in January, already arrives on the member rate, direct: net 187 EUR. This time the forty euros of commission stayed in the house — and even after the discount and the transaction costs, 6 euros more of it remains than another Booking reservation would have left. And what’s worth even more: the relationship now belongs to the hotel. The fifth stay no longer has to be bought from anyone — it goes into a well-timed newsletter, not into commission.

The classic traps

Trap 1: Making the member rate public

If the “member” rate is in fact visible to everyone on the website, it does double damage: a parity problem (OTAs can contest public undercutting contractually, and can punish it in rankings) and BAR erosion — a public −8% is not a member rate but a price cut, one that wrecks lesson 44’s rate-bridge position. The closedness (login, newsletter list, code) is not a formality: it is the construction itself.

Trap 2: A member rate without a list

The member rate is an empty engine if there is no one to offer it to. Whoever launches the rate but doesn’t build the list (check-in opt-in, website registration, post-stay email) reaches a few dozen people with their member rate — and the 8,000-address numbers above scale precisely with list size. First the collection process, then the rate.

Trap 3: Direct steering at peak times

On peak days, when the house fills anyway and we would be tightening the OTA allocation regardless (lesson 43), the member discount doesn’t steer — it marks down: it gives −8% to a guest who would have come at full rate. Direct steering is a mid-period game — where the shifted night genuinely takes from the commission channel, not from our own full-rate demand. Lesson 48’s day-by-day mindset applies here too: steering tools live targeted at day types, not calendar-wide.

Trap 4: The illusion of “free” perks

A perk’s marginal cost is capacity-dependent. At full house, a room upgrade occupies a sellable higher category — there it carries a displacement cost; and late checkout works against that day’s arrivals when the house turns over that day (lesson 42’s arrival-pattern logic). The perk programme should therefore be written with capacity conditions (“if a higher category is free”, “guaranteed subject to occupancy”) — the “always, for everyone” perk collects its price precisely on the most expensive days.

Key takeaways

• A repeat guest isn’t disloyal but rational: if the direct channel offers no rate advantage, no perk, no relationship, OTA convenience wins — and the hotel pays commission for the same guest again and again.
• The member rate is a closed discount: the public BAR and rate parity remain untouched, while for a guest arriving from the list the −8% costs less than the 18% commission saved — on Hotel Peaqplus City’s numbers, net 93.5 vs. 90.5 EUR, i.e. +3 EUR/night despite the discount.
• The list is an asset: 8,000 addresses at 2% annual conversion, with the 28% vs. 10% return-rate gap, produce ~6,000 EUR of surplus value over two years — and it compounds as long as the opt-in is part of the check-in routine.
• In a small hotel, loyalty is not point collecting but recognition: immediate, tangible benefits, 2-3 tiers, administered from the PMS — the economics of a points programme require chain-level visit frequency.
• Shifting the channel mix is a multi-year, compounding process: a target path (65% → 50% OTA over three years), quarterly scorecard measurement and discipline — steering is a mid-period game; at peak it would just be a markdown.