Take advantage of consumer psychology to boost your hotel bookings

There’s a famous field test in which a Columbia professor set up a tasting booth at a local grocery store to promote and sell jam. The first week she offered 24 flavors of jam, and the following week she offered six flavors. Which week did she sell more?

With 24 flavors of jam, 60% of the store’s customers stopped to taste test and 3% of the tasters actually ended up buying jam. The following week with only six flavors available, only 40% of the store’s customers stopped to taste test, but 30% of those tasters bought jam. When you run those numbers, that’s a sales increase of more than 600%!

Being in the hotel reservations business, we see a lot of hotels and vendors trying to find new ways to add more “flavors of jam” to the online reservation process by using upsells: addons, room upgrades, extra nights for longer lengths of stay, or anything that seems to be the whim of the day. However, our own data here at Travel Tripper shows that guests rarely buy into these upsells. It’s much more valuable for hotels to increase their conversion rate (even by a small percentage) than it is to sell an upgrade or addon to the less than 3% of guests that buy them à la carte.

In Derek Halpern’s recent article on his blog Social Triggers, he demonstrates how offering too many choices can actually overwhelm customers and prevent them from buying. For those of us in the hotel industry, that means keeping the booking process simple and controlling the way options are presented to the guest. In Travel Tripper’s RezTrip 3.0, we’ve simplified things by integrating upsells seamlessly into each step of the booking process so that the guest is never overwhelmed with choices in the decision making process.

For example, room upgrades can be integrated into the very first step of the booking process. Once dates are entered, guests have an easy, visually driven comparison of room types to pricing:

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In the second step, the guest chooses a room type and is then presented with the available offers and other add-ons specific to that room type only. Many hotel booking engines feel that it’s important to present these types of offers from the start. When you do that, the number of options multiples immensely. Instead of five room types, you have five room types times five or six offers for each — up to 30 options, and very often it’s many more. RezTrip keeps it much clearer and optimizes the number of choices shown:

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In the third and final step, the payment page, the last available option is not an upsell at all, but rather a way for the guest to save money or buy “flexibility.” With RezTrip 3.0’s alternate policies option, hotels can offer special pricing via nonrefundable or advanced purchase policies. But despite the discounts, the default standard policy presented in RezTrip actually encourages guests to keep the higher-priced rate via a psychological phenomenon called “the power of default” — essentially, the default selected option tends to carry the strongest weight in the buying process, simply because it requires the least effort for decision making.

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RezTrip 3.0 has been designed to strike a balance between an optimal number of choices at every step, integrated up-sells and the use of the power of defaults. A guest looking for value can find it easily, while a guest looking for the cheapest room can make a reservation very quickly by opting for default choices at every stage and only filling out their personal information.

So remember that whether it’s jam or hotel rooms, keep the options short and simple — and always have a default option selected — so that you can close the sale and maximize conversions.

Gautam Lulla

Gautam Lulla

Gautam is CEO of Pegasus and an outspoken expert in hotel technology and distribution. When he's not busy disrupting the status quo, you can find him ripping powder on the slopes. Contact him at gautam@pegs.com.

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