OTAs – are they necessary?
Ensuring good market exposure and distribution presence means that working with multiple offline and online channels is essential for success. Properties should aim to promote their most profitable channels but be realistic in understanding that consumers will not just search for you and book directly.
Research has shown that most travellers commence their search for accommodation on OTAs (Online Travel Agency) and/or Metasearch engines. Properties are paying OTAs for displaying their properties in a multitude of locations ensuring exposure. OTAs and Metasearch Engines provide great exposure and visibility to reach and encourage guests from markets both internationally and domestically. These guests in turn are looking for new options but with the convenience of reducing time on researching individual properties’ websites. One-stop shopping.
Do OTAs increase my revenue?
Unfortunately, the answer is complicated and dependent on individual variants, but in essence, yes they do. However, it is about capturing the highest paying travellers, at the time of booking, when you have rooms available at the best price point. Every property differs in this scenario and ensuring you align with the right OTA partners is critical.
OTAs – how do I know if they suit my business?
Data analysis is essential to selection. Initially analyse your property’s source markets and its market segmentation. Simply put, where are guests coming from and who are they?
Discover your property’s market statistics and potential types of travellers staying in your destination, to ensure you are getting your share. Ideally, how can the property reach and convert more travellers and which distribution partners do you align with?
The Australian hospitality industry depends greatly on international travellers, who represent a significant amount of the room nights sold.
Data shows that International Visitor numbers to Australia are growing significantly post Covid and that international travellers pay an average of 10% higher daily rates, stay 0.5 days longer and book 35-plus days in advance.
To be able to reach these travellers, independent properties need support online from key OTAs and other distributors with a strong footprint in key international source markets. These OTAs offer property exposure and booking capabilities to capture guests from specific source markets.
A prime example of this is listing your properties on Ctrip in China, HRS in Germany, or Holidu in Europe will invariably increase their chances to generate room nights from these source markets at a relatively low cost in terms of real marketing dollars.
OTA – do they pitch at different market sources and guests?
Different Online distributors can help reach different types of consumers and provide potential new market segments. OTAs have strong affiliate networks and provide booking capabilities from many and varied associates. It is important for properties to understand specific OTAs’ affiliate networks and find ways to take advantage of the benefits they could provide.
Whilst commissions are part and parcel of the OTA game, not every Online Travel Agent charges the same fees. Some smaller OTAs have cheaper commission levels in comparison to the largest online distributors. The smaller OTAs production might be lower but does allow you to work with cheaper distributors in order to lower their blended cost of distribution. If you save commission on a small number of bookings, it is still adding value to all bottom lines.
Often we find these smaller OTAs need to differentiate to compete and remain in business. So not only are they cheaper, but they can also help generate marketing exposure, visibility and consumer reach in niche market segments you currently don’t have access to.
Why is the Channel Manager important?
In order to maximise reach and exposure properties need to choose the right channel management system that links into their booking system seamlessly and connects their rates and inventory to a wide selection of distribution partners. A hotel distribution channel manager is an online management solution allowing the property to centralise all of its different distribution channels in one place.
Online Travel Agency (OTA’s) are essential to your property’s visibility. Online distribution is a crucial tool for all properties large and small. We all lead busy lives and prospective guests always search for simplicity and the best deal. OTA’s are an essential one-stop-shop and all properties need to take advantage of these opportunities. Guests will naturally be drawn to the easiest most convenient option that provides the clear and concise information they are looking for all in one place.
There are many things to consider when choosing which Online Travel Agents are right for you. There are a multitude of benefits to choosing the correct online travel agencies for your property. Online distributors provide higher exposure enabling you to display your property to a larger demographic, resulting in maximising your property’s occupancy, and in turn growing revenue. Of course, there are the obvious leading OTA’s of the world, however, there are many online hotel distributors that can be equally as beneficial for your business. It is all about finding the ones that will work best for your business.