The OTA’s Myth

Going on vacation? Hop onto any Online Channel and get the best price. Right? Not necessarily. Nothing against online travel agencies (OTAs) are just as unlikely to beat hotels’ direct rates.

Love/hate relationship :

Hoteliers harbour mixed feelings towards OTAs. They love the wide reach. They hate the model. Unsurprising when OTAs typically take over 20% of the booking cost. Hotels’ profit margins are being painfully squeezed by people buying into the belief that OTAs will get you the best rate.

Hotels are serious about matching OTA prices:

Chain brands are aggressively trying to wrestle bookings back from OTAs. Their tactic? Price promises. Some great hotel Chains are so bullish that they offer the best rate that they’ll bet on it. “Find a lower rate and we’ll give you a 10% discount or 2000 member points” their website proudly claims.
And if you’re big on your loyalty programs, some brands will only allow guests to rack up loyalty points through booking direct.

So how do OTAs maintain a stranglehold on bookings? :

Reports show that 76% of online hotel bookings go through OTAs. And OTAs are smart. They work hard on building relationships with their customers, have powerful SEO, and love to shout loudly about unbeatable rates. The last thing they want is to lose a customer to a specific hotel. Booking.com do this by blocking the sharing of their customers’ personal information with the hotel. That way the hotel can’t get in touch the guest after their stay, can’t ask them for feedback, can’t mail them special offers, can’t steal that commission right back from OTAs. This is difficult for hotels. It has a major effect on driving loyal repeat custom.

And why do people use OTAs?:
We’re creatures of convenience. First time visitors to a new destination are unlikely to have an intimate knowledge of the local hotel landscape. OTAs have the lowdown. Location, amenities, price, availability – all in one place. The longer you spend browsing an OTA, the further down the decision funnel you slip. Spend half an hour weighing up a few hotels, reading a few reviews and before you know it, they’ve got you. You’ve booked. We’re all suckers for the easy option. And that may be exactly what some people are looking for.

How can hotels react?:
Hotels are overly dependent on OTAs. With each passing year, hotels pass more and more money to Expedia, Booking.com and the others. As hotels and their would-be guests confront the plethora of electronic distribution channels, they face a complex picture of rates and availability of hotel rooms.
They’ll be sure to have to react with :
• Smoother booking engine
• More compelling promotional offers
• Have to shout louder about their “best rate guarantees”

In an attempt to sort out where client is offered consistently low room rates, better promotions & loyalty programs, BookOnlineNow Booking Engine has made considerable progress in fulfilling a stated goal of offering lowest-cost last-room availability marketing tools , Loyalty Scheme features and now launching Live Rate comparison of your hotel in competition with sites operated by third parties (OTA’S).

With this tool, your hotel displays your hotel’s room rates on other online channels alongside your own booking engine’s rates. Visitor can quickly compare the rates in one place without having to leave and search if he’s got the best deal!