According to the great god Google, 80% of all online hotel bookings are now made through Online Travel Agents (OTAs) such as Bookings.com, Expedia, and HRS.
20 years ago the emergence of hotel booking agencies and variable commission rates made more than one hotelier hot under the collar. Today, the OTAs business model of 20%+ commission and marketing fees for priority listings are causing similar palpitations; nevertheless every hotelier wants to increase bookings from digital.
There’s lots of advice out there for how hotels should engage with OTAs. Here is a summary of the do’s and don’ts:
- Have a plan, and communicate your objectives to the OTAs.
- Keep your prices the same for all (comparable) booking channels.
- Make sure that the content on your website and the content you supply to the OTAs is up to date, consistent and high quality. Invest in professional photography and videos of your hotel.
- Monitor the income generated by each distribution channel in terms of length of stay, revenue per order, food & beverage, retention, and cost rather than % commission.
- Promote your hotel through a range of different distribution channels rather than relying on any one.
- Negotiate on commission rates, 15-16% is reasonable but always bear in mind the comparative last-minute discounts.
- Resist offering last-minute discounts.
- Ask OTAs for reports tracking your hotel’s performance against its competitors.
- Ask your customers to comment on their stay through Trip Adviser and others. Expedia estimates that doubling a hotel’s number of reviews results in a 3% higher take-up and a higher ADR.
- Don’t forget the international market. Canada, Japan, Australia, Mexico, and the United Kingdom are the fastest growing countries for international travel. Their stays are 40% longer than domestic visits.
- Be aware of the growth of mobile bookings. In 2013 more than a third of UK consumers bought travel products through mobile technology.
- Negotiate black-out dates for periods when you are certain there will be significant demand from non OTA channels.