Independent hotels are getting into the habit of not having their own internet booking engines (IBE).
It is becoming a common practice with most of them to post their rates on different OTAs. They choose to give more commissions to OTAs instead of investing on their own branded website. And many hotels that do have IBEs are not effectively using them as their branded websites are old, unappealing, static, and rarely optimized. Most of these hotels are not even promoting their own room offers on their website. Tools provided by their IBE suppliers are either not used or applied in a wrong and ineffective way. For these reasons, this channel is not able to produce as expected.
Most of the time, hotels concentrate their efforts and investments on OTAs. They aim to be more visible, load more rate offers, and increase their availability. OTAs recognize the need to capitalize on technology. They know it is essential to do this in order to be on top when it comes to visibility among others. And the way they are doing this is by using hotels’ investments via the commissions they pay.
Hotels need to think the same way as OTAs do. I am not recommending that they cut them off as they make up a certain part of their demand. What I am trying to say here is that there is a huge opportunity for hotels to get revenue by having their own IBE. They can even increase that revenue by investing on technologies focusing on driving and increasing traffic to their own branded website. Hotels can also get some market share from OTA business, for example by rewarding OTA guests if they book direct on hotel’s branded website during their next visit. With direct bookings, hotels can save themselves from a portion of commission expenses.
This channel can be even more productive if hotels learn to apply a revenue management culture in their operation. If hotels understand the buying behavior of their different market segments they can effectively set up rate offers which will cater to all their guests. If they know the type of guests that are staying in their hotels, they can create targeted packages and not just sell discounted rates all the time, and avoid diluting their average daily rate.
Rochelle Castillejos is the Managing Director & Founder Hotel Revenue Plus. She has over 15 years of industry experience in the fields of Sales and Marketing, Revenue Management, RFPs (Request for Proposals), IBEs (Internet Booking Engines), CRSs (Central Reservations Systems), PMSs (Property Management Systems), RMSs (Revenue Management Systems), OTAs (Online Travel Agencies), and GDSs (Global Distribution System). She oversaw around 55 hotels in the regions of Americas, Europe, Mediterranean, Asia Pacific and Middle East throughout her career.
