OTAs V. Direct Bookings: Finding the Right Balance
The debate over OTA versus direct booking is often a common one with many hoteliers. Most hotels, especially large hotel chains, have been trying to drive direct bookings to their websites as OTAs often take up a larger share of the profits. The increasing market share of Online Travel Agencies (OTAs) and their growing popularity amongst travelers makes them a necessity to be a part of every hotelier’s booking strategy. OTA bookings have always had an edge – a fact most hoteliers cannot ignore.
OTAs offer user-friendly websites and applications that makes it easy for travelers to find important information about hotels, lodges, homestays and more, online, and then do the booking. Popular OTAs include TripAdvisor, Expedia, Agoda and more.
While some consider OTA hotel bookings a necessary evil, there’s no denying their importance for hoteliers. Hotelogix offers some reminders on how to find the right balance between OTA v/s direct bookings.
OTA v/s Direct Bookings: What’s better for your business?
Larger hotel brands such as Marriott Hotel Chain and Hilton Hotel launched campaigns that grabbed public attention in the war against OTAs. The purpose? Avoiding high OTA fees and retaining a larger margin through direct bookings. Not every hotelier however, is equipped to branch out individually and step around the OTAs altogether. The question lies in what small and mid-sized hoteliers can do with a limited budget. The trick is in finding a balance between OTA hotel bookings and direct hotel bookings.
Why are OTA Hotel Bookings important for hoteliers?
Online exposure: Listing your hotel property on an OTAs website will generate the right amount of exposure to attract guests to view your hotel property details. These distribution channels are often a blessing for small and mid-sized hotel properties that may not be noticed on any other channel.
A survey by Google states 52% of travelers worldwide visit a certain hotel brand’s website only after locating the details on an OTAs website. This serves as a great platform even for budding hoteliers, helping them be where their customers are.
Ratings, reviews and more. OTAs often act as an online brochure of hotel properties. Hoteliers can easily update content, images and videos to attract the target group. Expedia hints that hotels who provide a detailed description of their property are 2.1 % more likely to be booked. Online users often peruse the ratings and reviews before moving on to the final OTA booking. Hoteliers can make use of reviews and ratings to respond and build a great online reputation. Since OTA websites are most frequented with travelers of all kinds, small and mid-sized hotel owners can use this platform to interact with online users. They can provide detailed information to their questions and opinions. Hoteliers on a tight budget can optimize the OTA platform using high-quality photographs, define their USP, and introduce special offers.
Reach the target traveler. OTAs are particularly useful to help hoteliers reach their target group without spending a fortune. Sometimes, a hotel property may not get the appropriate global reach during lean periods. Or, hotel owners may not have resources to penetrate difficult to reach markets. Hoteliers can partner with OTAs and form a distribution strategy that defines the source of the bookings that are most profitable for the entire year. OTAs can help hoteliers reach the discerning traveler as per the USP defined by the hotel brand. On the flipside, ranking high on the OTA list may often be a problem area for hoteliers who are new to the scene and are yet to receive reviews and ratings that will push their property to the top of the search results.
Enhanced user experience. As per details by PhocusWright, 64% of all mobile bookings are directed through OTAs. There’s no denying the importance of mobile devices and apps for hotel bookings and OTAs often take the lead in providing an enhanced user-experience on their platforms by investing in the right areas – including: Greater online exposure; Quick access to information and reviews for the travelers; Visually-appealing platform that hoteliers can leverage; and Easy booking process with secure online transactions. OTAs that invest heavily in user experience across a range of platforms are often hard to compete with for small, and mid-sized hotel owners who have direct bookings as a focus.
Marketing and communications. OTA platforms are specialists when it comes to marketing themselves and gaining a loyal customer base. OTAs have the capacity to hire the best talent and can invest heavily in digital marketing and advertising to put their brand name in the eye of the viewers. They are specialists in their field often gaining a loyal customer base.
Can hoteliers rely only on direct hotel bookings? Direct hotel bookings are often the most sought-after type of bookings hoteliers aim for in the long run. There are a number of benefits hotel owners can reap when direct bookings are achieved successfully.
Build direct connections. The hospitality industry includes the building of a personal connect with customers. By having a strong focus to drive direct bookings, hoteliers get the chance to improve the connections between guests and hotel properties. A number of OTAs do not share guest details with hoteliers. Direct bookings give hoteliers the chance to maintain guest details in their system, which may be used to fine tune guest experiences.
Zero commissions. Hoteliers often pay high fees to OTAs for every booking made through the agency’s platform. Direct hotel bookings eliminate the need for paying large commissions to OTAs and allow hoteliers to reinvest the same on service improvements
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Loyalty programs. Direct hotel bookings allow hoteliers to use their hotel loyalty program to the best effect. Hoteliers can target messages as per the guest preferences to encourage repeat visits. Using the guest contact details, hoteliers can increase hotel visits by crafting special package deals, offers, and discounts to their existing group of customers.
Guest Experience. Hoteliers can easily make use of the guest data available to enhance the guest experience levels for every visitor. With new technologies arriving on the scene, it’s easier to provide personalized experiences leading to a brand recall in the minds of the guests. Direct bookings allow hoteliers to improvise and equip themselves better to carve a niche in this industry.
OTAs v/s direct bookings: Why both matter for hoteliers
The benefits of direct booking are many, but the power and influence of OTAs cannot be ignored. Independent hotel owners of small and mid-sized properties may often find it difficult to invest heavily to drive direct bookings.
It’s important to create the perfect balance between the two to keep the regular flow of guests visiting the hotel property.
1) Learn to partner with the OTAs and create synergy
2) Have a great distribution strategy in place
3) Build an impressive responsive website – it’s the first step towards having your presence online
4) Embrace technology - Invest in a smart cloud-based hotel management system that allows a pay-as-you-go service, is easy to connect with multiple OTAs, and provides mobile apps for flexible management on the go
5) Work on your personal branding; maintain all updates regularly on your website
6) Get legal protection to ensure OTAs do not take a larger share of profits
7) Offer value-added services – on OTAs platforms as well as your own website
8) Build a great loyalty program – package it to be an option for the premium class of travelers