A few weeks ago, my colleague participated in an HSMAI event in Bangkok, Thailand. One of the general sessions focused on the increasing role of online travel agencies (OTAs) and questioned whether the hotels have lost revenue due to their own reliance on the channel. The message seemed to be that when used wisely, OTAs are a great vehicle for selling extra inventory. Nevertheless, many revenue managers continue to be too heavily dependent on the channel, providing inventory even during times of expected high occupancy.
This trend, of course, is nothing new to hoteliers. As we wrote last year, the commissions paid to OTAs are often viewed as just “the cost of doing business” and have been an industry norm for years. In our post, we discussed several ideas to consider when trying to convert more business on your site directly. From integrating social media on your hotel site to ensuring rate parity and offering consumers an added incentive, hotels can deploy a number of tactics in order to shift some of the bookings share away from the OTAs.
Fortunately, many hotels are beginning to action these ideas and are starting to regain some of the direct booking control they once enjoyed at the turn of the millenium. Nevertheless, the implementation process of these tactics does not come easy and other properties are continuing to struggle with it. My colleague was witness to these growing pains during a recent exchange with a New York City hotel. After extensive time spent researching her hotel options for an upcoming trip, she decided to book a property that was offering a rate $50 lower on an OTA site than on its own website. Preferring to book direct in order to earn loyalty points, and because we serve hotels, not OTAs, she called the hotel asking if they would match the rate that was available only on the OTA. To her dismay, the hotel denied her request; they would only offer the same rate if she booked the room via the OTA first and then filled out a in advance of her stay, which would offer her a credit.
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