Recent years have seen a rise in the number of the online booking platforms. They’ve become increasingly popular, and as the intermediaries between hotels and their guests, seem to be taking over a significant chunk of reservations made via Internet. Their growth seems inevitable – and so does the loss of control by the hoteliers. But does it mean the end of the direct bookings?Ê
OTAs
Online Travel Agencies, or OTAs, gained an immense amount of power over the last decade. Most of them came to the scene even before the Internet grew into what it is now, and quickly established their position.
They gave people what they wanted. Quick, easy to use, accessible tools to book rooms whenever and wherever they want. All hotels in one, easy-to-navigate place. An opportunity to compare and choose from millions of options. Essentially, they provide what the good 21st-century online products boil down to -easy designs, comfort and accessibility.
Customers don’t like over complications. They want to make a reservation with one click of a button, without the hassle of making phone calls and sending emails. The creators ofÊ online booking platforms noticed this and used it to their advantage. Most importantly, that is what differs them from many hoteliers. They understand, that the world is moving forward and that their target groups need the products to be up-to-date with their expectations.
Many hotel owners don’t feel as comfortable on the internet and social media. They know their business, they do it well, but marketing-wise, they often cannot keep up with the OTAs, who have crews of hundreds working on their advertising and online communication strategies.
It seems as if the battle for the direct bookings is lost, and soon the OTAs will take over the entire process.
The rate parity issue
One tool the OTAs use to control the hotels is rate parity. It is a legal agreement between those two parties, ensuring, that the hoteliers use the same rates for their room prices on all the distribution channels. Having such an agreement signifies that the hotel can’t give discounts on its prices, not even on its own website. Because of that, guests often don’t even bother going to the hotels’ own site, believing that it won’t lower the costs. If the price for the room is the same via a direct channel and the OTAs, it means, that the 30% commission lowers the income of the hotel by 30%.
The whole agreement doesn’t seem fair and makes one party feel frustrated and cheated. Hoteliers feel as if they lost all the control over what used to be theirs. No wonder petitions circle the web, asking for the rate parity to be made illegal. In fact, it is currently illegal in countries like the United Kingdom and France. Yet the fight is far from won, and the longer it ensues, the more difficult it will be for customers to switch their mindsets and visit hotel websites directly instead.
The importance of direct bookings
It is obvious – hotel owners would prefer to acquire as many direct bookings as possible. The main reason? Costs. While attracting more bookings, the OTAs charge the hotels commission of up to 30% of the overall price of the room. That means, that while getting more reservations, the hoteliers earn much less than they could if they were made through their website or other direct channels. Every CEO wants to maximize the revenue of their business. No wonder, that so many hotel owners are frustrated with the OTAs, because their help seems necessary, yet it comes with a steep price.
ButÊ direct bookings are much more than just a source of income for the hoteliers. Most importantly, it is a tool to better control their property and revenue. They can superviseÊ reservations with more efficiency, without intervention from third parties, as well as gather data about their customers for both analytic and advertising purposes.
By controlling bookings, they can also improve the overall experience of their guests with the hotel. By relying only on themselves, they can make it more special and unique. Personalizing messages, being actively involved in the experience their guests are having, showing interest in their needs and suggestion – these are some of the most important benefits of direct bookings.
Direct bookings also establish loyalty. If guests book through the hotel and connect with its staff, they are more likely to remember it next time they choose the same destination.
Are there solutions?
If you are a hotelier, it may feel, as if there is no point in fighting the system. Many assume, that there are no ways out. This is far from true. There are still solutions hoteliers can use to fight back and regain booking control.
Firstly, remember the design. We live in an Internet era, and each one of us is bombarded daily with hundreds of websites of different colours and schemes. That’s why your hotel’s site should stand out. It’s impossible to overstate the importance of it – an easy to navigate, clear and interesting design can be a true game-changer.
Secondly, go mobile. The studies suggest that each year more bookings are made via mobile devices, not justÊ computers. Make sure, that your website works on both and doesn’t lose its integrity when opened on a smartphone.
It is important to focus on the booking process. ItÊ should be as easy to make as possible, with clear step by step instructions and clear, understandable buttons. SiteMinder has a new widget – The Booking Button, that makes the process incredibly easy and fast, with various additional options, such as currency conversion and many language choices.
Another crucial tool is social media. Use Facebook and Instagram to interact with guests and show them the benefits of staying at your hotel. It is a great way to establish a good reputation among travellers and therefore get more direct bookings. Engaging with them is another way to establish loyalty, which so crucial in the today’s environment. Don’t be afraid to use online positioning to ensure that your hotel is visible.
It is also worth noticing that not all OTAs are Ôbad guys’. One company, that wants to bring the fairness back to the industry is Bidroom.com. This online booking platform, which is essentially a community of travellers and hoteliers, doesn’t charge hoteliers commission, and in fact, ensures the direct bookings for them. In exchange, it only asks for a discount or extra benefits for the guests, so that both sides of the reservation feel content with it.
The fight for the direct bookings is certainly not over. The hotels should use all of the resources available to them to fight back and regain authority in this matter. It is crucial for them, but also for their guests, who seem to be on the losing side of this equation, often paying more than they should. While the choice given by the OTAs is an advantage, the new era should, above all, bringÊ transparency back to the industry and control back to hoteliers.
About the author
Brought up in Poland, KlaudiaÊFere_czuk is a journalist and a blogger, with articles published in Business Hotel, MamStartup and more, as well as over 150 blog posts related to the hospitality industry and travel on her account. She focuses mostly on the travel market, with special regard to the Online Travel Agencies.
