Remember 20+ years ago, when your hotel guests could only book direct via phone, your brand’s 1-800 number, the brand website and your own website. Ahhhh…The good old days when you got to keep 100% of the rate. (Except when a Travel Agent booked for the guest and then you simply had to a pay a bargain 10% commission.)
Then, the OTA’s came into the picture around 1996-97 claiming anywhere from 15-30% commissions.
Allow me to run through the brief history of how the marriage or shall I say dysfunctional marriage between hoteliers and OTA’s has transpired. In my many years of hotel sales and marketing experience, I have personally observed this landscape change and continually transform.
In the beginning, I remember being a Front Office Manager and being fined by my brand franchisor for violations of lowest rate guarantee. It was a learning curve as we Hoteliers were trying to navigate around this new technology of its time. Rate Parity Policies and its related processes have certainly become more streamlined. Online Travel Agencies have come and gone, yet most have been merged to form a few powerhouses.
There is really no need to look back on additional historic points as to how we arrived on the scene today; both OTA’s and Hotels are here to stay. The real question is how we can co-exist and how can we as hoteliers drive more guests to book direct which is our most profitable booking channel. The OTA’s of the world are becoming ever so much more clever at grabbing the attention of the guests we eventually host. OTA Loyalty programs are just one example. Another would be the Millions of Dollars spent on advertising to lure our potential guests into using their services.
One strategy that absolutely confuses consumers is Google AdWords Campaigns that populate an OTA over a Branded Website. Here is one example: A guest googles “Brand X in City Y” and a listing pulls up in the #1 spot. They proceed to call the 1-800 attached, or book direct online thinking they are working directly with the property when in fact they are booking through an OTA.
In my hotel operations experience, I have seen this happening several times each week. Guests will swear that they called the hotel direct and booked their room. Now why can’t they cancel with the hotel directly? Why did they not get the specific room type they thought they would get?
There are three specific strategies that I think we as Hoteliers should implement in order to pull our guests back offline and back to booking with us direct:
- Re-train our front desk staff or reservation agents to become more inquisitive when speaking with an incoming caller. Prior to calling your hotel, a guest has most likely been searching various OTA’s regarding your hotel and some are online at the time they call your hotel. With specific training, your agents can book those guests right then and there and avoid a customer booking on an OTA.
- We need to advocate that our National and International Brands run a joint and entire industry campaign to educate consumers as to the benefits and pitfalls of booking with an OTA versus Booking Direct. A campaign that is not brand specific, yet more of like a Public Service Announcement in form. Note, I did say there are some benefits for some consumers with booking with an OTA. i.e. convenience of booking hotel, air and car is one of them.
- Continue to educate our customers who booked on an OTA, that upon their return visit to book direct. Inform them that they can get the best rate by calling direct and they also have more control over reservation changes and/or cancellations.
The relationship that we as Hoteliers and OTA’s have isn’t the perfect marriage made in heaven, but we can make the best of it by taking even a small percentage of our guests back Offline and back to booking with us direct. It is time that us hoteliers put more money back into our own pockets! Figure out how many rooms you should dedicate to OTA’s.
If you have any questions or concerns, feel free to contact us!
About the Author:
Jay Hartz is a former member of Cayuga Hospitality Consultants.