Online Travel Agents (OTA’s) are travel agents that act as a third-party selling hotel and apartment bookings via the internet. The main OTA’s that you would be aware of are Booking.com, Expedia and Agoda. OTA’s charge a commission, which can vary between 10% and 30%. OTA’s are important to the Hotels/Apartments industry as they give increased exposure/visibility worldwide. Gone is the need for a property to have a massive marketing budget for brochures and print advertising.

Many ask whether Airbnb is an OTA? Over the past 10 years, Airbnb has developed from a Silicon Valley startup that allowed spare bedrooms to be rented out to surfers. The main difference is it mostly lists personal homes instead of hotel rooms. However, Airbnb is now broadening their scope and offering filters such as ‘bed and breakfast’ and ‘hotel’.

Independent hoteliers are finding it cheaper to offer commissions to OTA’s rather than engage in direct advertising. This has led the Hotelier to become dependent on OTA’s, instead of using them as just one channel for bookings.

In most cases, guests will find a property directly on a channel such as Booking.com, but then will often go straight to the hotel/apartment website and/or TripAdvisor to see if there is a better deal. The properties website must have ‘stickability’. The booker needs the journey to be as safe and easy as possible.

What can revenue managers do to help shift the balance, increase direct business and lower cost of sale?

Here are the facets, OTA’s are not going to disappear. They will continue to be a part of the marketing mix. These sites should be seen as a marketing tool and sit alongside the hotels direct booking strategy. The direct booking strategy has to be the focus of the hotel and the OTA’s should be the platform that promotes a hotel. The goal Is for all repeat business should be booked direct.

How can the industry take back their inventory, reduce the cost of acquisition and own the customer journey from booking to departure? Direct bookings!

As mentioned earlier, think of third-party sites as a marketing tool that sits beside a focused direct booking strategy. They are the channel that brings a new guest, and all repeat guests should ideally be booking direct. Many bookers use the OTA’s for their initial search and then go to the hotel’s site. Therefore, a hotels website needs to be able to convert the booker to a sale. The booking journey must be easy. Hoteliers need to review their websites and booking engine. Some other ideas to promote turnover would be, including private rates and offer incentives for booking directly.

Whether you believe that these third-party sites are a friend or a foe, they are here to stay. They can give visibility to a worldwide audience while the property only pays for the business they receive. Hotels need to work with the OTA’s but always focus on the direct business.

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OTA: Friend or Foe

16/6/23