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Why OTAs are here to stay

Marieke Wisse •
Why OTAs are here to stay
OTAs are one of the biggest players in the hospitality sector and familiar to nearly every traveller. Will their dominance in the booking arena stick?

Alex Bufton - a sports fanatic, hospitality enthusiast, OTA guru, and a distribution consultant at Guestline, shares her thoughts on what we actually need to know about OTAs, including pros and the cons and their enduring presence in the hospitality industry.

Hi Alex, could you tell us a bit more about what you do?

I’m responsible for managing the commercial relationship between our connected OTAs and RMS partners. My focus is on generating demand for our portfolio of over 2000 connected locations across the globe.

How, and when, did you end up in the hotel-tech industry?

The ever-changing landscape and how it constantly evolves. Every day is a new day and it’s incredible to be at the forefront of continuous innovation.

You were referred by someone when we were looking for an OTA guru. Why do you think you've earned this reputation??

Ha! If I have to be honest, I think it must be my many years of industry experience. By working on-and-off-property with managing hectic reservation teams, directing account management teams for big players, being on the other team and supporting global chains with revenue and business optimization, I’ve gained a lifetime of experience.

Of course, Guestline has strengthened that too. Supporting businesses with driving profit, and exposing them to new markets through new tools, has contributed hugely to my expertise.

OTA

First of all, What is an OTA?

An OTA is an online marketplace for hotels looking to sell their rooms and services on a global scale, in exchange for commission payments - 24/7, 365 days a year.

What is changing in the OTA landscape?

OTA’s are increasingly moving towards adding more inventory - sometimes in quirky ways like treehouses, or by tapping into the shared economy market. Most significantly, OTAs want to start selling the entire experience: flights, railway travel, attractions, etc. They want to become a one-stop shop for their consumer - driving their own brand loyalty simultaneously.

My experience has shown that Google Ads are definitely a disruptor in countless markets, and whilst hotels have to work the Booking.com/Expedia duopoly, hotels have seen a business shift directly affecting their bottom-line gains.

What are the advantages of an OTA?

The advantage for consumers is the number of plug-ins and price-monitoring add-ins. These tools will cancel and re-book a property at a lower rate whenever possible. Bookers are loyal to their preferred OTA for a number of reasons. Namely: ease of booking - as the OTA’s hold the bookers details; accessibility on different devices; trust in the look-and-feel (think Booking.com - 3 steps and you’re booked).

The advantage for hotels is that they can quickly access bookers from different markets, run tactical or strategic offers and display offers to closed user groups in exchange for increased exposure.

What are the disadvantages of OTAs?

Even before we moved into the world of GDPR, OTAs “owned” the asset - the booker in this case. Properties were no longer able to market their services directly, as OTAs stopped sharing booker email addresses. OTAs may also have a high attrition rate as customers become loyal to an OTA, rather than a specific hotel (chain). OTAs also monitor properties on the rates they sell across a number of channels, and whilst rate parity is no longer a requirement, properties are penalised by OTAs with higher commision rates if they offer different rates to other public channels.

Where do you think OTAs will be in 5 years?

I think there will be further consolidation - or rather acquisition - resulting in more “super brands” offering different inventory/booking experiences/options to different markets. Meta - though it’s still a bit shiny and new, is shrouded in an element of mystery. It’s new and mainly mastered by the super savvy, but it will increasingly grow as properties try to take control of their online presence and cost of sale. By managing and driving profit whilst working with channels that produce volume, metadata will really shine through in the near future.

What are 5 things you would advise hoteliers about OTAs or the OTA landscape?

  • Content is King, so keep it fresh! Algorithms are constantly updated so ensure your property is featured in the best possible fashion, and tell your story through compelling visuals and images.
  • Interrogate your business - OTA’s might drive bookings, but what is the cancellation ratio and revenue? Does one OTA perform better than the other? Speak to your market manager and see how you can drive more (earlier) bookings, and win over your competitors market share.
  • Focus on what makes you unique and what separates you from all other competing properties.
  • ALWAYS respond to feedback. Remember it’s a gift, even if you don’t want it. The decision to purchase is impacted by organic feedback because people buy from other people. Research has shown buyers go through an emotive process and trust the opinions of a selection of strangers in making their decision to stay.
  • Be social - if you offer a great dining experience, Instagram it. Have a closed user group promotion? Facebook it. Create and share fantastic “wow” moments.

Any questions about Oaky? Feel free to reach out!

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Marieke Wisse
Marketing & PR
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