OTAs. Necessary evil, or great booking partner?

There are more and more OTA’s entering the market every day , and many of the household name OTA’s are merging or being bought out by bigger players. So, does an accommodation business need to use an OTA? Why can’t a property manage without? How does a business take online bookings efficiently, effectively and profitably?

Probably the most important question that we are asked about day in, day out, is how a hotel or hostel can manage its online bookings more effectively.

Property Managers (regardless of if they are hotels, hostels, apartments or resort managers) have a plethora of tools at their beck and call to enable them to sell their rooms, beds and dorms. However, with all the technology available, how does a property manager ensure that they are doing the right thing by promoting their business online, yet at the same time not become a slave or a servant to the OTA’s (Online Travel Agents). As a PMS vendor, we can see from the outside what some of our clients are doing to try to relieve the reliance on OTA’s – or how the property manager goes about taking advantage of the OTA whilst still trying to reduce costs and maximise RevPar and ADR.

There are three key points a property manager should consider:

  1. A property needs to ensure that they have a working direct booking engine embedded on their own website which takes bookings into their PMS and uses real rate and availability live from their PMS. The user will book and will continue to book on the website which is keeping it simple, but still giving the traveller options. Even some of the larger OTA’s have some pretty awful booking experiences for guests, so making sure the property own website is easy to use and navigate is imperative.
  2.  Is it wise to use an OTA booking portal on the property website? Even where the OTA will not charge for bookings from the hotel or hostel website using this plug in, using such a functionality will still promote the OTA to the booker / traveller. We have a few small independent hotel groups as clients and have seen the clever work that they are doing to promote the properties to their relevant market segments (corporate / govt / MICE etc) to ensure that the hotel website is the first port of call for each guest, PA or other travel booker. Every person who works at the hotel or hostel is a member of the property’s sales team. They all have a way to remind the guest to go to the hotels own website, ahead of the “OTA dot com”.
  3. Ensure guest communication – both before and after the stay. With politics aside and the OTA’s technically “owning” the guest in some cases, the hotel (technically) is not allowed to directly market to the guest. There are of course certainly ways around this, and hotels are now doing follow up “How was your stay” emails, or “Looking forward to welcoming you” emails or SMS (which is back in fashion again?), which pushes the brand of the hotel to the inbox on the smartphone or tablet – again with a reminder of the hotel brand, and of course the hotel or hostel website.

We have seen one of our larger group accommodation clients reduce their reliance on reservations from being 60% from a single OTA down to less than 25% reliance on that same OTA by a combination of sales leg work by their team, and investing in building their own booking engine on their website which connects directly to their PMS. The group has 20+ sites and for their 5 businesses in one of their key cities are “saving” $50k per month in the reduction of commissions to OTA’s – certainly a revenue bump that more than offset their website development costs and the wages of their sales and marketing team. Some of the accommodation market segments we supply software into have fairly savvy travellers who book with them, and know that if the traveller uses an OTA to find “that place to stay in that location” – then 3 out of 5 potential bookers will go to that property website to potentially book there instead.

There is a place for the OTA’s – they are a powerful and useful tool, but property managers do have the resources available to be able to balance their reliance on the OTA in most cases.

GuestCentrix PMS provided an API which can be used by a property to design a unique booking engine which allows a direct connection to the property website, and NO COMMISSION or per booking cost either.

Alternately, we can provide the technology to allow a hotel, hostel or apartment company to build their own bespoke booking engines for their website, which uses the Rate Codes in GuestCentrix, with the direct and live availability from GuestCentrix Property Management System. Check out St Christopher’s Hostels in Europe or YHA Australia for how efficient the booking process can be

So, are the OTA’s necessary?

Well, yes they are. OTA’s allow maximum promotion of the property across lots and lots of online channels. Guests will look at wildly different websites based on where they are geographically located. We have seen Booking.com very popular in Europe, Expedia in the US, Wotif.com in the Southern Hemisphere, and Agoda across Asia. OTA’s have massive marketing power behind them to promote into their markets. And if you don’t appear in their search returns, the property is invisible to that guest. If your guests come from here, you need to promote your business probably on all those channels.

But not forgetting that a guest probably will visit your own webpage, so make that an experience they won’t forget.

Contact GuestCentrix today

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