Bid management for hotels

In a nutshell – what is bid management and how does it work?

Hotels are now fully digitized. They know exactly who is offering what and, above all, to whom. Always in the right place and at the right time. At least that’s the theory.

And guess what? The reality is usually different. If this is exactly what happens in your hotel, congratulations! Then you’ve played the bidding game. For everyone else, we recommend reading on.

It usually works like this: Hoteliers set the prices of their offered rooms in their booking engine, the guest still books in most cases via large OTAs such as Booking.com, after which the hotel pays a fairly high commission to these same OTAs.

In order to intervene in this process and simply change it, there is no way around bid management. The aim is to place your website on the metasearch channels in such a way that it is the most profitable sales channel for your guests and the booking is therefore made directly via your booking engine. At the same time, you avoid the high commissions of the OTAs. So much for the theory, now how do we put this into practice?

Are the first steps always the hardest?

The best place to start is with an analysis of your booking engine. Take a really close look at it. What can your booking engine do and what can’t it do? Is there an interface to metasearch channels such as TripAdviser, Trivago, Google Hotel Ads, etc.?

The next step is to find the right publisher. A publisher is your integration partner (e.g. Mirai) and takes care of the distribution for you. The next step is to find the right bid management platform for you. Define what requirements you have of the platforms and which ones they can cover.

So far so good. You have made your decision and can start, congratulations!

Let’s get this party started!

The basics are in place, your rates are set, now it’s time to get down to business: conversion.

But first a little mental exercise: Which budget model suits you better, CPC (cost per click) or CPA (cost per acquisition)?

The advantages of CPA are obvious: you have a fixed commission that you pay for a booking received. However, no shows or cancelations are not taken into account and fall behind. On the other hand, handling and settings are pretty easy and you can count on a fixed ROT (return on investment). Once set up, you no longer need to make any adjustments.

Would you like a little more? Then it’s straight on to the CPC model: your booking engine must receive the right traffic in order to achieve variable ROI. In this case, variable means that you can adjust your settings on a daily basis. What are the benefits? One example is lower commission costs with a higher ROI.

And now?

The basics of bid management are therefore clear. We have already mentioned it at the beginning, but we would like to emphasize it again: Make sure you get support with this topic and stay on the ball! We understand that bid management is not the most exciting topic for every hotelier, or that they simply don’t have the time. In these cases, you can fall back on us.

In cooperation with the most common booking engine providers, we take over the control of your rates on the portals.

Regardless of whether only Google Hotel Ads or also Trivago, TripAdvisor, Kayak or Skyscanner, all five meta channels can be controlled via the 2-way interface.