There's nothing wrong with engaging OTA's services if hotel owners are completely satisfied they are getting value for money, the question to answer is will hotel owners in 2025 still be willing to pay their ever increasing fees and retain this single source reliance to sell their rooms capacity online?
Many hotels keep thinking that rate and inventory parity is the right online distribution strategy, however from a business and profit perspective it cannot be totally acceptable if the servicing costs continue at current levels and all the indications point towards they are likely to rise in the future.
Signing up with OTA's sounded good when the internet was still in its infancy “Same price offered on all channels and whoever finds the customer wins”. What could possibly go wrong? The hotel owner did not have to do anything but just go along with the OTA's business model.
In todays world the Internet is a vastly different animal with all the latest technology available and AI up and running, however it still is the number one show case for hotel owners to promote their products and service offerings direct to the consumer.
Direct selling, both telephone and website, has gained a large share of sales, demonstrating its great sales capacity and resilience. The trend is likely to continue in the future due to the current economic climate which is placing enormous pressure on consumers disposable incomes.
This huge increase has meant that many hoteliers have changed their passive or neutral attitudes towards direct guest selling to considering it a strategic pillar in their overall distribution strategy. In this post, we will analyse the reasons for this explosion, why part of this change will be permanent and what the small hotel owners need to do to position attracting customers into their sales funnel in the future.
Guest Benefits
From a guest perspective it is a no brainer as to who would book direct if major OTA's offered the same price or a discount? would you (don’t cheat)? A few lost users and maybe those who already know you would book directly, but for everyone else, especially international travellers, OTA's are the most likely option particularly with the explosion of the all inclusive and mobile phone phenonium. Trust, best price, customer service, and the best booking technology are just a few justifications.
But listen if money is tight and you need a holiday tech savvy searchers will be looking to book the best deal possible. So what happens in the process of looking for the best holiday deals? They search the Internet to find their perfect holiday deal then inevitably make direct contact with the hotel owners to secure an even better deal! A process that potentially places the hotel owners at risk with the big OTA's owner OTA agreements, be warned. There is no doubt hotel owners can offer a better deal than OTA's because the price they offer OTA's includes commission rates of varying percentages 3% - 20% is the norm. This will only be achieved if hotel owners focus on the belief that a direct guest selling strategy only works with dedication and commitment to the strategy itself.