OTAs vs Going Direct

A Direct Booking Story – Tokyo Family Stays

I wrote this as a contribution to the upcoming book on Direct Bookings by Mark Simpson at Boostly– comparing OTAs vs going direct and why going direct is the way for us!

Like so many other hosts, I kind of fell into hosting Short Term Rentals. It wasn’t planned or thought through to the end but it has been a helluva ride with so many lessons learned along the way. 

My Hosting Journey

I had been living in Japan for more than a decade by this stage, married with a young baby. Grandparents were wanting to meet the most recent addition to the blood line and my small Japanese apartment couldn’t cope with the demand. Plus the oldies were not keen to camp out on the living room floor on a futon. So I needed a second apartment with a proper bed near my place. 

This was 2012, Japan was on the cusp of a tourist boom. Japan, after a seemingly endless recession, was now affordable and enjoying the perfect storm of great exchange FX rates, clever international marketing and cultural curiosity. Japan was on the bucket list of so many travelers. 

So putting these elements together, I thought I would rent a small second apartment. If I could rent it out half the time on the OTA’s to foreign visitors, then I would cover my costs. My goals were modest but the business really took off. 

I was so busy that I couldn’t accommodate my family and friends any longer. So I added a second apartment, then a third, fourth and fifth. It was going crazy. There was a never ending demand. Then these guests were coming back year on year and choosing to stay with me again – I was really enjoying the ride. I was up to 25 listings and a 7 figure business – how on earth did that happen? 

Massive Growth and Regulations

I wasn’t alone. Hosting became popular in Tokyo and many people were getting into the game and so supply was increasing too. 

But then in 2015 the government regulators started sniffing around as they always do when there is a disruption to an existing market. The proposed new rules were going to be tough. The OTA’s were bending over themselves to appease the government and hosts were left to figure it out for themselves. 

Originally I had been drinking the OTA kool-aid – giving great hospitality and making them a ton of money.

From 2016-2018, I spent so much of my own money getting compliant. This meant retrofitting houses for new fire standards, figuring out the confusing laws (in Japanese eek). Also, making sure I had all my licences in good standing. Zero help from the OTA’s. This was despite the huge amount of money I had generated for them over the years. Plus helping their brand by giving exceptional service to my guests. 

Taking matters into my own hands 

Time to capture those repeat bookings for myself. 

I recognised the need to nurture my guests to be repeat guests. Then to get them to recommend me to their friends. Fortunately, I was enjoying good word-of-mouth referrals this already but on the OTA’s. So I shopped around for a direct booking white label option and found one that fit the bill. We went with Lodgify and have been happy with this choice. But mostly, this exercise forced me to spend time considering the domain name and my brand.  

• Who was my ideal guest? 
• Which guests were the ones who appreciated my service?
• What were the house types that brought in the most profits?

Benefits of Branding

Without realising this, I had really done the work to discover my brand. I named my business, Tokyo Family Stays and bought the domain name www.tokyofamilystays.com

Then so many other decisions were so much easier. I was able to really focus in on my ideal guest, making sure my listings really met their needs. Also, that I was fishing in the right pond with the right bait. 

In 2018, I created a Facebook page, an instagram feed and a mailing list. I imported all emails from past guests that I could find and then I actively collected them from each new booking. (If I have one regret, it is that I didn’t start collecting email addresses from day 1.)

Marketing to my Ideal Guest

I discovered a Facebook group filled with my ideal guests all wanting to come to my area and needing my help. This group has over 200K members – EUREKA! I made myself known to the admin and created an affiliate relationship with them. So I was able to promote my shiny new direct booking website to a captive audience. 

Then I made relationships with travel agencies, relocation companies – anybody who also serviced my ideal client. I started to run giveaways, I had seasonal mailouts with promotions, I had a referral program and a lead magnet. 

Having a clear brand on a booking platform and a social proof from my business page made all the difference. I had a clear definition of my product, the vision of who I was serving and our company mission. I saw the OTA’s as one of the ways to capture customers and not the only way. We were about 50-50 OTA to direct bookings. 

My profits increased, my staff morale was outstanding and our systems were great. We had a real relationship with our direct booking guests and things were great. 

The Pandemic

Then came January 2020…….  The borders closed, the Tokyo olympics were postponed and everybody cancelled. Given that we had relationships with our direct booking customers, we were able to offer travel credits for their non-refundable deposits. This kept us afloat while we pivoted our model to a domestic staycation, WFH, quarantine business. We would not have survived without a direct booking platform. 

Looking Forward

Writing this in early 2021, the borders are not open. Yet but the relationships with the relocation companies are solid and these will be the first group to start travelling again. Also, I know I have guaranteed leisure bookings as soon as the borders open. This is because the people who had to cancel in 2020 will be wanting to use their travel credits. 

We are bullish about revenge travel and time will tell if our bet pays off. If our website is still going at www.tokyofamilystays.com then you know we were right.