How hotel marketers can shift bookings from OTAs to the hotel website
Business- Level Initiatives and Digital Technology + Marketing-Level initiatives can help hotels achieve OTA independence.
The agency model adopted by Expedia and other OTAs plus the aggressive introduction to the U.S. market of Booking.com and its agency model, made the hospitality industry’s overdependence on the OTA channel painfully visible. It is time for the industry to fight back and shift share from the OTAs to the direct online channel.
This year, the hospitality industry is in for a lot of pain. OTA dependency continues to plague the hospitality industry, despite gains in the past three years and positive trends in all three industry indicators. This isn’t new. What’s new is the pain to the bottom line inflicted by the fat commission checks hoteliers are now paying Expedia and other OTAs, due to the widespread adoption of Expedia’s and Booking.com’s agency model in the U.S.
Last year, Expedia introduced the Expedia Traveler Preference (ETP) Program to the U.S. market, a classic “agency” distribution model and a stark departure from the traditional OTA merchant model. With ETP, travel consumers book on Expedia and pay when they arrive at the hotel. The hotel then pays Expedia the contracted commission.