Digitization in the new era has brought many new and sophisticated changes in Online Travel Agencies. (OTAs) These convenient changes of the last decade have provided an easy source of hotel bookings for the hotelier with lesser effort. On the other hand, these bookings come with a hefty cost, i.e 30% commission on every booking. Hoteliers may consider this to be a marketing cost or tax, but the hard truth is that these commissions are the second-highest amount incurred to him after that of labor.
Bigfoot Hospitality presents to the hoteliers “OTA Management Strategies For The New Age Customer”, which includes some revenue management tips to decrease reliance on these OTAs.
What Benefits Do OTAs Provide The Customer With?
We wonder how have OTAs managed to capture such a huge part of the hospitality market demand, and have placed themselves between travelers and hoteliers? And why do they continue to dominate the market? It all narrows down to the traveler’s preference based on these three factors :
Choice & Variety- Traveler’s attention span is short on the internet. Having all the choices he’s looking for in one place is what a traveler looks for. This reduces the time he invests in search and the chances of uncertainty are less.
Price Preference: People like to price shop on the internet. They love it when they are able to find all the hotels in one place and are able to compare the prices easily. This saves them a lot of time, instead of going through a bunch of tabs to make the best buy.
User Experience: All these choices and prices are displayed in an easy-to-use format and mainly with rich content.
So basically, OTAs optimize the traveler’s experience in such a way that the hoteliers never did. OTAs give the new-age customer what they’re looking for, and blurred out the actual hotel’s efforts. The hotel usually fails to adopt the fast-paced, convenient technology of the new era like eCommerce and mobile shopping. So, as long as OTA’s continue to excel, hotels will receive the disadvantages.
What Are The Problems That OTAs Create For Hotels?
Hotels face some very concerning problems caused by the OTAs, one of which is the feeling of getting squeezed of every last penny. OTAs always have had an upper hand on hotels. Because of this, understanding the OTA Management Strategies For The New Age Customer is very necessary. Below are some of the hotel’s major concerns :
OverBookings and UnderBookings- Every Inventory must be updated individually on each channel’s extranet to avoid double bookings. If a hotelier has a limited understanding of OTAs or has a chain of multiple properties, it gets difficult to manage without a channel manager. Also, because the majority of OTAs have lenient Cancellation Policies, hotels face a harsh effect on their revenue.
Commissions- Market demand gives more opportunities for pricing power to the OTAs. This leads to higher commissions charged. Hoteliers are paying more for the same product with lesser operations and leverage. In the end, hoteliers receive a depressing revenue from their hotel business.
Fact: Commissions have jumped to 45% as a share of guest paid revenue since 2015.
Bigfoot Hospitality, the Hotel Revenue Management, Hotel OTA Management Company, and Hotel Marketing Company has aced the Hotel OTA Management Strategies. And has understood the importance of a balance between OTAs and digitalized shopping techniques preferred by the new age customer. If you’re a hotelier and are struggling with bookings, depressed revenue, difficulty in managing hotel operations and calls, low branding efforts, and more, feel free to get in touch with us for a consultation.