The main thing that I want you to take away from today is that Online Travel Agents, such as Booking.com, Expedia and Laterooms.com, are not your enemy. Of course, direct bookings are important, and reducing your dependency on OTAs is never a bad thing, but the fact of the matter is that, by default, the vast majority of potential customers, when looking for a hotel room, will turn to an OTA first.
As with any part of running a hotel, there are positives and negatives, but if you go in with a realistic view of how you can work with an OTA then I tend to find that the positives do outweigh the negatives in the end.
The positives of OTAs include:
- Exposure in your market with the ability to reach new customers
- Built-in customer base that you may be unable to reach otherwise
- Ability to sell last-minute rooms or push quiet dates through promotions
- No upfront investment – you only pay when they sell a room
The negatives of OTAs include:
- Commission, often starting at 18% and going as high as 30%, can be a big hit to your bottom line
- OTA customers are loyal to OTAs due to their loyalty schemes such as Booking.com’s Genius program and Hotels.com free night stays.
- You have little to no control over when, or if, you appear in their listings, short of signing contracts and paying more.
The fact is that OTAs are an integral part of running a hotel and aren’t something that you can get away from. By embracing OTAs, with a pragmatic approach, you’ll be able to grow your business over the long term.
My top tips for working with OTAs include:
- Keeping in regular contact with your account manager, and arrange meetings when they’re in your area. They have a wealth of information, and it’s their job to increase their area’s sales, which in turn means increasing your sales.
- View OTA revenue as a segment of your business just like any other, and manage its performance – increase bookings, increase rate, and increase customer satisfaction.
- Work to convert your OTA guests into direct bookers, but don’t go overboard. Organic coaching of them to book direct through little incentives such as free upgrades or a dinner discount goes down much better than saying they should book direct so you don’t pay commission.
How do you find your working relationship with OTAs, and do you have any hints and tips that you think I should add to this post? Let me know in the comments below!