16 Dec Enemy or partner? Is there a balance?
OTA is the monster that hotels created by themselves. So let’s agree with the idea that the so called OTAs did not came out from nowhere and with no reason. There was a demand for something like this…
What is good and what is bad? Probably this question will never have a common answer what so ever. It’s all about the point of view, right? Similar thoughts came to my mind while thinking about relationship between hotels and OTAs.
There have been so many thoughts spread about this and so many articles written… I thought why not to summarize them and present some kind of own conclusion about Healthy relationship (or let’s call it partnership) between accommodation providers and OTAs.
Probably, for a start it is worth mentioning the idea what I found in one of the articles, where it was written, that OTA is the monster that hotels created by themselves. So let’s agree with the idea that the so called OTAs did not came out from nowhere and with no reason. There was a need for something like this. It could have been GDAs, Tour Operators, Wholesalers or your neighbor Phil, but it happened that OTA’s were the first ones to make a step. Hotels were amazed by the way of how OTAs work and blindly followed any request of the “market’s newborn”. Well, that is how you grow yourself a monster… Don’t get me wrong, I am not calling them monsters, I’m just rephrasing the idea that I currently hear from my fellow hoteliers.
At some point it became a very bittersweet relationship: you can’t stand them, but at the same time you can’t live without them.
Why OTA’s are not evil?
Easy – 76% of online bookings happen in OTAs. Most of the times, they are the place where people find you. 52 % of those 76%, will visit your hotel’s website after finding you on OTA sites. And that is the part where you have to be prepared to meet those visitors.
Also according to the statistics, guests are spending up to 6 minutes on the hotels website to make a decision. You would say 6 minutes is a very good time, wouldn’t you? They are spending an entire 6 minutes on my website? No, my friend, this is not something to be happy about. Guests need their questions answered as fast a possible with as little friction as possible. About ways how to make your website look better than OTAs, I will talk in other blog post.
Think about it this way – would you rather earn 65% – 88% of the revenue from a booking or would you rather have the room sitting empty, earning nothing, because consumers weren’t able to find and book your room? I think we all know the answer.
So getting back to the idea, why OTAs are not bad, we should mention the other important argument – Advertising. Think about how much money they are spending on advertising and how much money you allow yourself to spend on advertising… Yes, you might say that they are ripping off a crazy amount of commission, but then on other hand you should think where this commission goes. Most of the money goes to advertising, which means that basically by paying a commission you are investing in your own advertising. The OTAs are only making money when you’re making money, so by not using the OTAs to list and sell your rooms, you’re actually stopping yourself from making money.