“Would you like to pay for that directly with us, or do you want to do it through booking.com, Sir?”
Believe it or not, that was the question I was asked at a hotel’s front desk when I informed them that I would like to extend my stay another night. With staff like that, who needs enemies?
Now let’s be fair to the receptionist – she innocently offered the possibility of completing the transaction through the OTA because she thought I might be picking up points, or some other benefit by doing so. After all, I’d booked the first night that way. Her concern was actually focussed wholly on customer satisfaction, and she clearly had no idea what she was doing to her employer’s bottom line.
It’s worth mentioning though, because on the customer side one common piece of advice to travellers is that if you offer to book directly with a hotel you might be able to ask for a little bit extra in return – late check-out perhaps, or some similar perk. The same advice is offered on the hoteliers’ side of the deal, suggesting they might offer extra incentives to direct bookers to offset the fact that their OTA contracts stop them offering lower prices. However, all of this becomes completely irrelevant if front line hotel staff aren’t aware of the true nature of the relationship between hotels, OTAs, and customers and therefore don’t understand the benefits of direct bookings.
The OTAs use their market power to exert a powerful influence upon hotel profitability, and finding strategies to counter the negative aspects of this business relationship is very difficult. Hotels must effectively compete against their own OTA partners, and the playing field is nowhere near level. There are certain advantages to customers which hotels could promote to encourage direct bookings, and there are also ways to increase a hotel’s online visibility without relying on the OTAs, but you won’t be able to exploit these ideas to fight back against the OTAs without a coherent strategy that everyone in your organization understands.
Among the main strengths of the OTAs is the ease of booking. The websites are simple to use, clearly laid out, and it is easy to complete a secure transaction. Since the sole purpose of the OTA is to sell rooms, they are very good at it. Hotels on the other hand must focus largely on operating a hospitality business, so it’s no surprise that they struggle to match the professionals in establishing a streamlined sales and marketing process.
The first step is therefore to address the shortcomings of your hotel’s own website. It must be simple to navigate and has to work perfectly on mobile devices since an increasing number of bookings – especially last minute ones – are made from smartphones. Studies show that as many as half the people who find your hotel on an OTA will then try to visit your site. The opportunity to catch a direct booking exists, but you must remove all the potential obstacles. If your SEO approach isn’t effective they won’t find you. If your site is confusing, they won’t get as far as your booking page. If you don’t have a secure payment system, they’ll go back to the OTA. If you don’t have any updated packages or promotions, the customer won’t see a reason to book directly.
And more to the point, is the person who is in charge of your website and distribution strategy fully aware of your objectives and what you’re trying to achieve?
One benefit you get from using an OTA is that your hotel becomes more visible, at the cost of that increased visibility coming through channels you can’t control. The weakness of the OTA is that they neither know nor care who your customers are, so it’s important to take advantage of this knowledge gap by developing a consistent social media e-marketing strategy that will allow precise market segmentation as well as fostering customer loyalty. And once again, when customers do get in touch, you need to be as quick to respond as the OTAs, and make sure you don’t make basic booking mistakes such as forgetting to note that an airport pick-up was requested.
You are never going to beat the OTAs at their own game – as attempts such as roomkey.com show – but you can make inroads when you take them on at your game, which is to provide the best customer experience to your customers. Focus your efforts on developing a clear strategy where everyone in your organization understands how and why you are going to exploit every avenue to lower your reliance on the OTAs and promote the advantages of this to your customers, and there is a chance that you will alter the balance of power.
The OTA – hotel – customer triangle is one in which the OTAs know exactly what they’re doing and do it very well, the hotels sometimes know what they’re doing but still often do it quite badly, and the customers have no idea why they should be booking directly with the hotel. The onus thus falls upon hotels to improve and inform.