McKinsey tells travel companies to compete for guests who have already booked
A confirmed booking used to mean the guest had decided; McKinsey now treats it as a pause that lasts until the free-cancellation deadline, and Marriott's chief information officer says the industry allowed that
by Markus Busch
The last section of a report Skift and McKinsey published on September 22 is advice, and it is blunt. If a public rate drops while a booking can still be canceled, the company holding that booking should step in with a credit, an amenity or a rebooking. A competitor, the report says, should do the opposite: show the guest a better option and make switching easy.
For a hotel, the competitor in that sentence has three faces. The OTA. The hotel down the road. An AI tool that keeps watching the price after she books.
Marriott's technology chief points at cancellation policy. Naveen Manga, Marriott International's global chief information officer, is quoted in the report explaining why guests keep circling back after they book. The reason is the cancellation policy, and he puts it on the industry: "As an industry, we allowed that." They can still cancel, so they keep checking. A free-cancellation rate promises to hold the room. It also holds the decision open, right up to the deadline.
78% keep planning after they book. That is McKinsey's survey of US travelers. Only 18% stop once the main reservations are made. Most of what the rest do is harmless to you: 68% look up restaurants and things to do, 64% keep scrolling content about the destination. But they are online, with your hotel's name in the confirmation, and anyone selling rooms in your town can reach them.
Whoever holds the booking knows the most. McKinsey makes a point a hotelier can use. The company holding the reservation has the dates, the rate, the room type, who is coming, and when free cancellation ends. On a direct booking, that is you. You have her email and her arrival date, and the hotel down the road has to find her first. On an OTA booking, the OTA holds all of it, and it sells every other hotel in your town.
The limits. The survey covers just over 1,000 US travelers, and the report gives no field dates. The diaries behind its journey charts come from 26 people. On how often travelers swap a booked hotel for a better one, the report gives three numbers: half, four in ten and 49%. And on a Skift panel in September, Priceline's commercial chief said she sees no material shift in travelers switching after they book. The window is open. Nothing here shows guests leaving through it in large numbers.
On Monday. Pull your future bookings on flexible rates that are still inside their free-cancellation window. Then look at what your hotel sends those guests before the deadline. If the answer is the confirmation and, weeks later, the pre-arrival email, the time in between belongs to whoever writes to her next.
Until that deadline passes, the room is booked. It isn't won.
Read also: Radisson's price match is really live OTA monitoring
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