OTAs as your main marketing strategy
OTAs (Online Travel Agencies) are now a cornerstone of tourism, and they attract strongly conflicting opinions. Whatever you make of them, though, it is undeniable that OTAs are an indispensable tool in the modern hotel landscape. Travellers use them almost automatically, not only to book rooms but above all to check availability and prices for hotels in the area they are interested in.
Knowing how to make full use of the OTAs is a significant competitive advantage. It is not just about increasing bookings through these portals, but about reaching a vast audience of potential guests online. That is why, in the sections below, we will look at how hoteliers can get the most out of the OTAs — and increase their direct bookings in the process.
The most efficient shop window on the web
When it comes to promoting a hotel online, the first thing that springs to mind is reaching the widest possible audience, perhaps through ads on Google or the main social networks. Yet OTAs are often thought of merely as a catalogue in which to list your product, rather than as a marketing investment. The reality is considerably more involved.
Placing your hotel on the main online portals gives you substantial visibility with users and, thanks to the OTAs’ own advertising spend, lets you promote the hotel on search engines such as Google and on social networks such as Instagram and Facebook. That visibility generates not only OTA bookings but direct bookings too, as we will see in the next section.
The potential guest’s journey
If you look at how people behave when searching for accommodation, a recurring path emerges. They will often look for possible places to stay through the OTAs and then, once they have shortlisted the most appealing options, run a Google search to find the hotel’s official website and its contact details, such as the email address and phone number. This happens because of the widespread awareness of the high commissions the OTAs charge. Travellers are, in effect, trying to get a discount on the booking against the price shown on the platform.
A simple percentage calculation, one that keeps the discount smaller than Booking’s commission, yields extra margin on the booking. On top of that, a direct guest tends to be more loyal than one coming from an OTA, since the latter is often enrolled in the loyalty programmes the platform has built.
What this journey teaches us is that the commissions paid to the OTAs are not merely the cost of acquiring one specific booking, but also an investment in the advertising visibility the OTA provides. That visibility is not uniform across every property on the channel: it is directly proportional to the hotel’s ranking on the platform. In the next section we will take Booking.com’s ranking as our example.
The Booking.com ranking
The ranking on Booking.com determines the order in which available properties appear in the search results. It is a league table the platform builds itself, based on a number of factors. These include:
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Content: optimising the property’s descriptive information, facilities and photos is crucial. Make sure your profile is complete and detailed.
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Rates: prices play an important part. Keep your prices competitive and monitor your competitors’ pricing strategies.
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Availability: room availability is taken into account. It is worth loading rooms at least a year ahead to maximise visibility.
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Reviews: guest reviews influence the ranking.
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Conversion rate: the proportion of bookings to page views is a performance indicator.
It follows naturally that some widespread practices — such as getting guests to cancel on Booking in order to encourage a direct booking by offering a discount, or holding lower prices on your own site than the ones published on Booking (rate disparity) — damage the ranking. The result is fewer bookings both through Booking and directly, as a consequence of the reduced visibility.
Closing thoughts
Looking at the many facets of the service the OTAs provide, it emerges that despite the high commissions they can potentially reduce the need for heavy marketing investment. And that investment would not, in any case, match the OTAs for effectiveness.
It is also worth bearing in mind that leaving the OTAs out today would mean shutting yourself out of a vast and growing market, and losing the earnings opportunities that go with it. It is therefore essential not to see the OTAs as a necessary evil to be contained, but rather as an opportunity to be taken full advantage of.