The Budget Paradox: Why Do Hotels Have Unlimited Budgets for Expensive Reservations?
💸 Hotels allocate a fixed yearly budget for direct bookings, but unlimited commissions for OTAs. Indirect bookings cost twice as much as direct ones (16% vs. 8%). To boost direct bookings, reinvest 10% of revenue in marketing, and implement a per-booking budget after the first 100. Also, allocate more for marketing high-end rooms and incentivize staff with a direct booking commission. This strategy aims for uncapped growth in the most profitable channel.
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