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Hotels and OTAs—as well as B&Bs and, in general, all short-rental properties—have been best friends for years now. It is a well-known fact in the hotel industry. It is not a new technology. The reason is obvious. A hotel could have global visibility using these Online Travel Agencies, and is great, but definitely not cheap. Ota are not Santa Claus and your customers are not wrapped presents, a hotel owner pays to be visible there.
But at the moment, OTAs have too much power to do without them. Independent hotels or accommodations have much to gain by being displayed in their listings. When travellers look for places to stay in your city, the first result in Google shows an OTA and the more they grow in popularity, the more clients will use them because they are trustworthy.
Even knowing this situation, Hotels and OTAs could maintain their relationship and grow together. I will show you some tips to take advantage of OTAs and start paying less commissions.
Definition, meaning, and insights: What is OTA in the hotel industry?
The term “OTA” is well known in the hotel industry, but in case you don’t know, this acronym means “Online Travel Agency”. The most popular one, probably, is booking.com. As I said, they are not a new technology, but an incredibly powerful tool to show your property to people all around the world, that are definitely potential guests. Depending on the OTA, customers can book hotels, accommodations, B&Bs, flights, rental cars, activities, and other travel services.
So, this Hotel OTAs marriage is important for hoteliers because they allow hotels to reach a wider audience of potential customers, increase their bookings, and maximize their revenue management strategies.
By partnering with popular OTAs such as Airbnb, e-dreams, and TripAdvisor, hotels, accommodations and B&Bs can list their rooms and attract more bookings from customers who prefer to book their trips online. These OTAs also provide a platform for smaller properties to compete with larger hotels, giving them the opportunity to showcase their unique offerings to a global audience. Obviously, you should choose the right OTAs for your audience, later in the article, we will see that some OTAs are stronger in some countries than in others.
Hotel and OTAs incredible duo is also useful to manage your revenue effectively by providing you with data and insights into traveller preferences and booking trends. Why this is important for you? Because you need insights to adjust your offer, from the pricing to the marketing strategy to have more possibilities to attract consumers and, above all, the customers that you want in your property!
Overall, partnering with OTAs is a crucial aspect of the hotel industry nowadays, allowing them to attract more customers while also helping them to manage their revenue effectively.
As I was explaining before, OTAs are not Santa, so for all these benefits, hotels pay commissions to the OTA for each booking made through their platform. The percentage of those commissions is increasing a lot in these past years, so as always, pros and contras. Surely, you can find a way to cut off this expense, using OTAs but implementing them with another distribution strategy.
How OTAs can boost your hotel’s bookings
Now that you know everything about the pros and contras of using OTAs, you need to understand that this is not the only way to sell your rooms. So, don’t waste your potential and keep reading.
- Optimise your OTA profiles – Your profile has to show your brand, and your identity as the place people want to go to relax, work or explore your city. Talk with care about you and your structure. Don’t forget to include high-quality images and descriptions: they are is your business cards.
- Understand and use the billboard effect – Transform your website into a booking machine using OTA like an advertisement. Follow this gratis e-learning in The Hotel Club, where we explain how to use this Billboard Effect! Is the best way to have direct bookings daily basis.
- Diversify – Find the correct channel, but use more than one. More channels more visibility, obviously you don’t need one hundred different websites. E-dreams, Agoda, Airbnb, are excellent choices, but OTAs in the market are much more.
- Make sure your brand mission is front and centre – People want to know what you stand for. Your mission is your identity and represents the way you work. If you have a nice cottage in a green field, so show them you want to be sustainable.
- Work on your reputation and promotions – Travellers like OTAs so much because they can search for accommodation, compare prices, find deals, and check reviews. The price on your hotel website should be the best, do promotions, and use coupons and gift cards.
- Use a channel manager – Without a channel manager, handling more than a few OTA connections at a time will become a nightmare. New technologies are important for independent hotels. The integration with others tools, like a PMS, a booking engine on your website, and a smart price prompter is essential.
List of the best: examples and sites
Booking
- Largest OTA in the world with over 28 million listings
- Hotels, flats, and holiday rentals
- Target market: leisure and business travellers
- Focus on user experience with features such as free cancellation and mobile app
- Partnered with major airlines and travel companies to offer loyalty programs and package deals
Expedia
- One of the largest OTAs with over 2 million listings
- Flights, hotels, holiday rentals, and activities
- Target market: leisure travellers and business travellers
- Operates several sub-brands including Hotels.com and Vrbo
- Loyalty program with rewards such as free hotel stays and flight upgrades
Airbnb
- Online platform that connects travellers with local hosts who offer unique accommodations such as flats, homes, and treehouses
- Target market: leisure travellers who seek unique and authentic travel experiences
- Operates in over 220 countries with over 7 million listings
- Offers experiences and activities hosted by locals
- Emphasizes community and sustainability with features like charitable donations and eco-friendly stays
Agoda
- Focuses on accommodations in Asia with over 2 million listings
- Hotels, hostels, and flats
- Target market: leisure and business travellers with a strong focus on international travel
- Offers exclusive deals and discounts for members
- Part of the Booking Holdings group
Google Hotels
- Not an OTA in the true sense of the word, but it performs the same functions
- Not an OTA in the true sense of the word, but it performs the same functions
- No commissions
- Target market: Leisure and business travellers
- User-friendly interface
- Need a connectivity partner to show the property (Amenitiz fits the bill with customer support).
- Main advantage: allows the property to appear in Google Maps.
- Google Vacation Rentals is the sister platform, suitable for holiday homes.
In this article we discuss Google Hotels in detail.
Overall, each OTA has its own unique characteristics and target market, but all provide a valuable service for travellers and hotels alike by connecting them through online booking channels.
What is OTA hotel management?
OTA hotel management refers to the process of managing a hotel’s relationship with online travel agencies (OTAs). This entails listing the hotel’s rooms on the OTA’s platform, determining the cost and amount of each room, and keeping track of bookings and sales. In addition to negotiating commission fees, OTA hotel management entails making sure that the hotel’s branding and marketing are consistent across all OTA channels. For hotels to optimize their exposure and revenue through online booking channels, effective OTA hotel management is essential.
So, what is the problem if OTAs keep giving a high percentage of bookings? Well, the issue is that they increase the percentage of commissions every year. By using the right way, OTAs, and using all the other arrows in your bow, you could receive much more bookings without OTAs’ help. With a responsive and attractive website and an integrated booking engine, you will have direct bookings every day.
What is the average OTA commission for hotels?
Online Travel Agencies drive all their revenue via their commission model. The commission is a percentage they charged to hotels, B&B and accommodations for every booking that arrives from the OTA website. Each OTA has a different percentage of commission, but the average rate is between 15% and 30%. To be more visible, they give you the possibility to put privileged listings that work like an advertisement. The higher fees, which rise and rise every day, could be too much for an independent hotelier. So better use them but, at the same time, improving also direct bookings. Hotel and Ota is a good marriage but needs to take distance to be satisfying.
Direct bookings. A marketing strategy: Billboard effect
How can independent hotels collaborate with OTAs? You will need a small marketing effort, and you will see your direct bookings increase day by day.
What is the Billboard effect? Let me explain this very common concept. First, you need to know that the process between the start of the research in Google to book a room and the booking itself is called the “customer journey”. This journey starts with writing in the search engine and clicking on the first results, which generally are OTAs, like Booking.
After finding a Hotel, for example, the traveller returns to Google and looks for the hotel website. This is the focus moment. Your website should be amazing, attractive, and mobile responsive. Above all, you should have an integrated booking engine and the best price. An integrated channel manager will give you the possibility to control all the bookings that come from your channel, including your website. This way, your future clients will book directly on your website.
If your website is old, with white text written on a plain orange page if you don’t have a booking engine and your photos are taken with your phone, bad news. The client will come back to the OTA and book there. For you, means that you missed a direct booking and will have to pay commissions.
This does not mean that you don’t have to use OTAs. It is just impossible, they have the economic power to be always visible. But why don’t try to use them less and create your space to increase direct bookings while taking advantage of them? Try to believe. This another proof that hotels and OTA can co-exist in harmony
The Hotel Club course to learn more about OTAs and how to take advantage of them.
FAQ: See more about Hotel and OTA
What is OTA hotel booking?
“OTA hotel booking” refers to the process of booking a hotel room through an Online Travel Agency (OTA). Some examples are booking, Airbnb, and Expedia. The OTA serves as a bridge between the customer and the hotel, with the hotel listing their rooms on the OTA’s platform. The OTA acts as the main point of contact for the customer, handling the booking process and payment.
The hotel benefits from partnering with OTAs because they increase the visibility to a wider audience of potential customers. In return, the OTA receives a commission of a variable percentage for each booking received.
What does the OTA rate mean?
Hoteliers are sometimes, but not always, required to agree to a rate parity clause in contracts with third-party booking websites or OTAs. This clause prohibits hotels from offering lower rates for rooms on any other platform, including their own website. This policy ensures that customers pay the same price for a room, whether booking through an OTA or directly with the hotel.
For this reason, sometimes, hoteliers are unable to offer discounts or promotions to customers who book directly with them, which could result in lost revenue. However, with the use of data analytics tools such as rate shopping platforms, hotels can monitor their competitors’ pricing and ensure their own compliance with rate parity agreements. By investing in a premium plan, such as the one offered by Hotel Price Reporter, hoteliers can access rate parity monitoring services to stay competitive in the market and maximize direct bookings.
What is the importance of OTA for hotels?
Hotel and OTAs could be great partners. Why? Partnering with popular OTAs like eDreams can help increase your hotel’s visibility and reach a wider audience. This is especially important for smaller hotels that may not have the resources to market themselves. Not like this big company, at least.
OTAs show affordable accommodation options This can help fill empty rooms and increase revenue if you have a clear image of your target.
Partnering with third-party OTAs can help you to reduce your workload. You can manage your inventory and rates on many platforms, saving you time and effort. If you collaborate with OTAs you will need a Channel Manager, possibly integrated with all your tools, to avoid mistakes.