However, there is no denying these websites are here to stay and, in some cases are essential to filling rooms, particularly for small hotels with minimal digital marketing budgets.
So if hoteliers are to live OTAs, how can they make them work for them? Following recent discussions in this area, BigHospitality has rounded up some of the top tips to working well with OTAs and getting the best out of the relationship so that profits can be maximised.
Have a clear strategy
Ricky Kapoor, commercial director at the Edinburgh Collection, suggests hoteliers should work with as many good OTAs as they can, but be clear about their strategy from the start. “It’s pointless working with an OTA where you can’t manage your own inventory,” he says. “You need to work with them to say ‘this is what my strategy is. I want to give you availability on these dates, can you shift the rooms?’ That’s the relationship you want.”
Ariane Gorin, vice president of market management for EMEA at Expedia agrees that communicating your hotel’s strategy to an OTA will mean you receive the best service for your hotel.
“When we have an honest dialogue about goals and objectives our team can strategically fine tune their approach as a partner’s occupancy builds,” she says.
Ensure marketing material is up-to-date
This applies to the material you supply to the OTAs, but also to that posted on your own website. Ensuring that pricing and availability is up-to-date as well as details of hotel facilities and photos across both OTAs and your hotel's website will give more power to your brand and may mean the guest will opt to book through your site rather than going to the OTA.
"Sometimes as a consumer I will go onto Booking.com because I get better information on the hotel than the brand website," says Steve Terry, development director at Chardon Management. "There are often better photos there, so by definition you’re on the website (OTA) already and you end up booking through it."
Gorin suggests hotels invest appropriately in online brochures to ensure they have comprehensive room descriptions, plenty of pictures and good quality guest reviews. “We know that simple things like doubling a hotel’s online pictures, providing a full property description and encouraging guests to write an online review, can help create more bookings and capture higher ADR,” she added.
To gain more bookings through it is also wise to invest in mobile booking technology. Expedia says:
"Mobile continues to grow and have an impact on the way customers purchase hotel rooms. According to PhoCusWright’s European Consumer Travel Report – September 2013 more than one third of UK travellers shopped with a mobile phone for travel products like flights and hotels (up from 21 per cent in 2011). On an anecdotal level, Expedia’s investment in this platform is already showing a strong ROI with the company’s travel apps achieving more than 80 million downloads in over 220 countries at a rate of more than 200 downloads per minute."
Keep on-top of commission rates
Brian Reeves, founder and chief executive of Goppar Digital says commission should be kept below 20 per cent per room sold, particularly if a hotel is independent and if they shift higher, try and negotiate to get it back to a more agreeable one or consider exiting the relationship as soon as possible if not. Kapoor suggests that 15 to 16 per cent is fair and balanced. He says the rate may sound high, but could be the best option if you don't want to invest heavily in your own digital marketing.
"It might not be such an expensive cost to sell when you think about what energy you might put into your pay-per-click (PPC) campaigns. You might get the top listing on Google, but that could be costing you a lot of money and you might not be that good at that conversion, so it can pay to work with an OTA, but manage that commission rate well," he says.
Act like an OTA
If you want to sell more rooms through your own website, you will have to behave more like an OTA. That could mean changing the way you market your rooms, by offering special promotions or creating a sense of urgency to booking, or improving your own digital marketing strategy, like bidding on property keywords (although this may not be worthwhile for reasons stated above).
Reeves says: "What the OTAs are doing terrifically well is, assuming that that property has price parity, is they’ll go from a brand website where a double is £200 and it’s being sold really passively to Booking.com who’ll say 'it’s £200 but it’s down from £250 and there’s only two left, he last one was booked 10 minutes ago and you can cancel it free of charge.' So they’re actively selling. Their conversion rates are so much stronger and for they the commission they are on, they can bid more for the customer in the first instance. The brands aren’t stepping up to that challenge in any way."
Consider black-out dates
If you are confident that your hotel will be fully booked on certain dates without the need for marketing - if it is located close to a sports stadium that will be hosting an important match with fans travelling from afar, or close to a conference centre for example, you can ban OTAs from selling your rooms on those dates. This was the case for InterContinental Hotel Group (IHG), who introduced this practice for the first time this year.
Philip Lassman, development director at IHG says: "At IHG we have 4,600 hotels all over the world and we have much better negotiating power. Let’s say you’re the Holiday INn at Wembley Stadium and it’s the FA Cup Final weekend and it’s two very northern teams playing whose teams are going to require accommodation well, because of our negotiating power we negotiate black-out dates with these OTAs, so effectively the hotels can close out the OTAs while remaining open through the IHG website and receive their bookings directly from IHG.com and they don’t have to take the OTA bookings.
"I think this step of giving black out dates is an industry first and shows that we mean business."