With passionate love/hate relationships dividing the hotel sector over the use of OTAs, (Online Travel Agents), what are the real benefits and drawbacks of tangling with these global operators and how can hoteliers protect their profits?
Over recent years there has been a real shift in how people book their hotels; with the dawn of smart phones, tablets and mobile friendly apps, OTAs have become a go-to method of booking. The simplicity and ease of searching and securing a cost effective booking has made them a great time-saving tool for the consumer. However, hotels themselves are beginning to feel the sting and those who have fallen into the trap of filling rooms at any cost are discovering that this can be a fatal mistake.
Once hailed by hoteliers as a great way of engaging with a global market, increasing room occupancy and generating extra revenue, OTAs are now drawing traffic away from hotel websites which forces them to rely on their services, for a hefty commission.
Studies suggest that consumers will leave an OTA to visit a hotel’s website, but the majority of these people then transfer back to the OTA to make the final booking. This means hotels have to rely heavily on business through OTAs and cuts deeply into their profits. So, the challenge for the hotel? How can that window of opportunity be used to maximise the number of consumers booking directly with the hotel and save hoteliers money on commission costs?
Firstly, despite the impact they have on direct business, it is important to note that working positively with an OTA is a key factor in generating high occupancy rates, however, there are a number of things hoteliers can consider to increase direct bookings.
The first challenge is getting consumers on to the hotel website. With OTAs pouring money into aggressive online marketing that can quickly divert attention from hotel’s own website, a strong online marketing strategy is needed to increase website traffic exponentially; carefully developed web content, Search Engine Optimisation (SEO) and pay-per-click marketing are just a few of the ways this can be achieved.
Once consumers are on the website, the second challenge is to secure their booking. The quality and ease of use of a hotel website is absolutely key in achieving this. See our previous article ‘How to Make your Website Work for you’ for tips on how to do this.
Consumers are often under the misconception that they can get better deals using an OTA than booking directly, so make sure that attractive deals and best rates are visible and advertised on the website.
Thirdly, learn to love Tripadviser! Consumers use Tripadvisor to make decisions about their trip and with the new Tripconnect driving bookings directly to your website, it’s an essential part of marketing and securing direct bookings.
So work wisely with your online travel agent! Enjoy the benefits of the market it opens up, but don’t forget the importance of direct bookings in order to protect hotel profits.