OTAs can grow your business by generating bookings with your brand by driving traffic to their sites like Expedia.com, Orbitz.com, Hotels.com and Booking.com. In return for their booking production, they charge you 15% – 25%. Good or bad deal?
A guest makes a reservation valued at $300 dollars with your brand and the OTA keeps $45 – $75 of that reservation for being the online travel agent. So, let’s look at the big picture, hotel XYZ grosses $6,000,000 and 45% of their revenue is generated from OTA bookings. How much does the OTA collect? I’ll save you the math. Depending on the commission fee percentage, it is going to range from $405,000 – $675,000.
So, are OTAs growing your business or have they painted a picture that has been accepted by the masses in the hotel industry? The answer is yes, they generate bookings, but their compensation for that is well above what it should be. How does a hotel take a proactive approach on limiting future guests from booking with an OTA and helping them book direct?
Data That Tells The Story
Google and Cornell University have completed case studies that analyze data on large segments of travelers and their steps to making a reservation online with OTAs. Both case studies found, amongst other powerful focal points, over 50% of guests who book with Expedia, Orbitz, Hotels.com, Booking.com, Trivago, etc. end up on hotel XYZ’s website before going back to the OTA to book. So why do potential guests go back and book with the OTA?
In December 2015, Expedia released data that consumers visit up to 38 sites before booking. It’s no secret that travelers want to know as much as they can about the brand and area they are staying, but after their research is complete and they are ready to book, they return to the OTA to make their reservation.
What are travelers looking at before booking?
65% of travelers go into planning their travel undecided on which brand to stay with. This explains the reason for exploring so many sites before making a decision to book. Events, pictures, reviews, food, exercise, location and many other things are all power points that most all hotels have on their website in detail. This explains why the traveler spends time on your site before booking with the OTA.
How can hotel retain these guests and convert them to book direct?
Things like mobile-responsive websites, content marketing, PPC, SEO and social media are all necessary strategies to get people to your website, but at the end of the day, guests want information and a deal.
So how can we give them both? Hotels have access to technology just like other industries and, if used correctly with a strategy, it can grow their business. OTA Hero is a suite of tools built to solve the problem addressed in this article and has been proven to lower OTA dependency.
The OTA Hero suite of products includes platforms that work together to give the guest what they’re looking for at the right time and at the price point they’re looking for – all while saving the hotel a commission fee from the OTA.
To learn more about lowering OTA dependency and increasing direct bookings, contact our East Tennessee marketing group.
