OTAs and hotels have a rivalry that has existed since the dominance of the internet. The digital revolution has shaped the entire hospitality industry, which now has to adapt to new challenges and adopt new techniques. One such challenge is the conflict between the OTAs vs direct bookings.
An Online Travel Agency, also known as OTA is a marketplace that provides customers with multiple listings of hotels that they can book. OTAs are also known as hotel booking sites. They are middlemen that connect the hotels with customers while earning a commission.
Along with the ability to book hotels among the ready-made listings, OTAs offer several facilities to customers as well. It gives a detailed description of the hotel, along with the list of amenities, room classes and reviews. It has now emerged as a multi-purpose platform. They also provide analytics and tools to improve your hotel business.
OTAs have emerged in the scene due to the growth of the internet and the transparency it provides. When brick-and-mortar Travel Agents were still in the game, there was no transparency. With the help of OTAs, customers can get a better idea of the hotel's quality and amenities. However, the battle of OTAs vs Direct bookings was going to start with the growth of the internet.
When a customer directly books on the hotel’s website, it is known as direct bookings. Booking on the phone and on social media is also known as direct bookings. Nowadays, messenger apps like WhatsApp have emerged as a source for direct bookings.
Direct bookings can be gained in several ways, such as through Google Ads, Social Media handle, or checking the hotel on OTA and then booking on the website.
In the initial days, hotels didn’t mind using OTAs, as they got marketing and also had to pay smaller commissions. However, commissions started to increase and hotels wanted more control over their marketing. This was the start of the OTAs vs Direct Bookings conflict.
This is how hotel direct bookings started gaining in popularity. With the help of SEO Expertise, Paid Online Marketing and Booking Engine, the hotel website can now be mobilized as a marketing and distribution platform.
In the conflict of OTAs Vs Direct Bookings, the latter is emerging strongly. Hotel website bookings have now emerged as a major source of revenue and lead conversions.
Conflict Between OTAs Vs Direct Bookings
In recent years, OTAs have experienced a massive spike in their importance. Hotels have a hard time navigating this huge landscape of the internet, and hence, require the help of OTAs who will list their properties based on category, price and location. However, hotels have to pay a commission for their services.
However, there are many hotels that don’t want to pay for commissions and hence, started encouraging and promoting their website for direct bookings. With the help of SEO, SEM and Booking Engine, hotel websites have become the best marketing tool and distribution channel for hotel bookings.
We need to understand both these platforms and how each of them contributes to the revenue stream of hotels, homestays and many other properties.
OTAs Vs Direct Bookings: How They Complement Each Other
1. Hotel Info
Both OTAs and hotel websites give information about the hotels. Vital info such as amenities, room types, room cost and other facilities are given in detail. With this information, the guest can easily decide whether the particular hotel is their choice amongst the various competitors.
2. Revenue Contribution
Both direct bookings and OTAs contribute to revenue. Even now, for many hotels OTAs are the best option for making, providing listing and facilitating bookings. To rank your website with the help of SEO is time-consuming and requires technical expertise.
While using paid online marketing can be expensive. OTAs act as a cost-saving channel for marketing and distribution. Hotels consider commissions for OTAs a small price to pay for better reach and higher revenue.
Hotel Marketing can be streamlined with the help of OTAs. OTAs are convenient for the customers and hence, hotels need to be on the platform in order to get customers. Direct bookings can too contribute to marketing by offering a customized experience and more benefits and deals compared to OTAs. OTAs are beneficial for newer players who still need time to establish their websites.
OTA vs Direct Booking: How Are They Different
In spite of their similarities in purposes, OTAs and Direct Bookings do differ and several ways. Some of the differences are:
1. OTAs Deliver More Visibility And Reach
OTA offers a ‘Billboard Effect’ i.e it advertises your hotels to more customers. When a customer checks your listing on an OTA, they will more like to check your website and book your hotel.
OTAs categorise hotels based on location, property type and prices. This helps in getting more streamlined bookings. For properties not established on the internet, OTAs are required for initial publicity and marketing.
2. Direct Bookings Help In Personalized Customer Relationship
Hotel Websites can build better relationships with the guests compared to OTAs. OTAs are limited in what they can do while using data to interact with the customer. Hotel Websites can offer customized experiences to customers. This is where direct bookings are better vs OTAs.
You can offer special deals, notify them of any events and also have your latest food menu on your hotel website. The possibilities are endless.
3. Direct Booking Saves Revenue Share
Since the hotel saves on commission on direct bookings, they can save on revenue. If you get most of your bookings from your hotel website and Facebook page, you will be able to gain more revenue. As far as OTAs vs Direct Bookings is concerned, the latter takes the lead in the revenue department.
4. OTAs Are Convenient for Customers
Many hotel guests prepare to book their hotels on OTAs because it provides them with a readymade listing of various properties based on location, price and hotel category. The room options with images are provided as well.
Another advantage of OTA sites over direct booking is that the former has reviews as well, making it an all-in-one package for booking.
Striking A Balance
OTA Vs Direct Booking is a battle that will be raging as long as both these platforms exist. However, hotels can get the best of both worlds by making the best use of both platforms.
1. Offer Loyalty Programs
No matter how much many facilities the OTAs, they cannot offer one thing, Guest Loyalty Programs. Hotels can gain an edge over the OTAs by including loyalty programs on their hotel website.
You can target former guests in your loyalty program since you already know their tastes and preferences. You can make customized programs for them.
2. Smart Pricing Strategies
Striking a balance between OTAs Vs Direct Bookings is essential for revenue and profitability. This is where you can use different pricing strategies to generate more revenue. Right price, right time and right place are the main goals of revenue management.
3. Optimize Your Website and OTA Listing
A functional hotel website will have a neat layout, properly demarcated web pages for each aspect of the property, information about the rooms and amenities will showcase the latest promos, and will have a functioning booking engine.
Similarly, hotels need to optimize their hotel listings on the various OTAs as well. The hotel listing should have a proper description, a list of amenities, and rooms, a description of the rooms, and high-quality images.
4. Convert OTA Booking Into Direct Booking
When a customer books a room night using OTAs, you should send them an email to encourage them to book directly on their next visit. To entice them, you can offer them better deals,
With this, you can able to utilize both OTAs and direct bookings. Both booking sources are in competition with one another, at the same at, they complement each other too! Hotels need both OTA and direct booking to get more revenue and make their business profitable.
OTAs Vs Direct Bookings is a conflict that will always exist till the hospitality industry exists. You should have used both of them to get the most results.
To understand more about the hotel business, you should check out our blogs on various topics for hoteliers.