Working with OTAs: The Indirect Distribution Dilemma
— 13 experts shared their view
Our recent study uses multi-year, objective data to clearly demonstrate that hotel properties that work with Online Travel Agents (OTAs) perform significantly better financially than those that do not, with commissions being more than compensated for by the increased revenues, resulting in higher bottom-line profits. However, in reality, many hotels still have a (perhaps historic) negative opinion of OTAs. While appreciating the resulting bookings, many still perceive OTAs as competitors rather than partners and fail to commit fully to what should be a win-win relationship.
With travel reigniting following the COVID-19 pandemic, what can/should OTAs consider doing to better seduce hotels and convince them to engage more fully with this valuable distribution channel?
It's the wrong question. The OTA's are doing exactly what they are supposed to do and even more. They are not only bringing in customers but they also give insights into the customer through their extranets. And are they pushing boundaries and sometimes overstep them? Absolutely - mostly because they can, and many times because what's the alternative?
Hotels need to wake up and find a balanced approach, it's not them vs hotels, neither whose guest is it and neither "Screw OTA's and do it yourself" approach. Hotels are the product that is put on the shelf by the OTA's and in order to get better placement, well you need to do better, want better branding, well - be better branded....not so different to supermarkets really.
An OTA has one job: Convert customers into a paying guest in the destination the customer is looking for: So, OTA's do not have to do more to seduce, hotels though need to take advantage of it from an insights and / or guest perspective. Many times OTA's get ahead (and hoteliers complain) because the industry lets them.