Remember 20+ years ago, when guests could only book your hotel via phone, your brand’s 1-800 number, the brand website and your own website?
Ahhhh…The good old days when you got to keep 100% of the rate. (Except when a Travel Agent booked for the guest and then you simply had to a pay a bargain 10% commission.)
Then, the OTA’s came into the picture around 1996-97 claiming anywhere from 15-30% commissions.
Allow me to run through the brief history of how the marriage or shall I say dysfunctional marriage between hoteliers and OTA’s has transpired. At the time of this writing, I am 50 years old. I have personally observed this landscape change and continually transform.
In the beginning, I remember being a Front Office Manager and being fined by my brand franchisor for violations of lowest rate guarantee. It was a learning curve as us Hoteliers were trying to navigate around this new technology of its time.
Rate Parity Policies and its related processes have certainly become more streamlined. Online Travel Agencies have come and gone, yet most have been merged to form a few powerhouses.
There is really no need to look back on additional historic points as to how we arrived on the scene today; both OTA’s and Hotels are here to stay. The real question is how we can co-exist and how can we as hotelier’s drive more guests to book direct which is our most profitable booking channel.
The OTA’s of the world are becoming ever so much more cleaver at grabbing the attention of the guests we eventually host. OTA Loyalty programs are just one example. Another would be the Millions of Dollars spent on advertising to lure our potential guests into using their services.
One strategy that absolutely confuses consumers is Google AdWords Campaigns that populate an OTA over a Branded Website. Here is one example: A guest googles “Brand X in City Y” and a listing pulls up in the #1 spot. They proceed to call the 1-800 attached, or book direct online thinking they are working directly with the property when in fact they are booking through an OTA.
At the Hotel that I own and Manage, I see this happening several times each week. Guests will swear to me that they called my hotel direct and booked their room. Why can’t they cancel with me directly? Why did they not get the specific room type they thought they would get?
There are three specific strategies that I think us as Hoteliers should implement in order to pull our guests back offline and back to booking with us direct:
The relationship that we as Hoteliers and OTA’s have isn’t the perfect marriage made in heaven, but we can make the best of it by taking even a small percentage of our guests back Offline and back to booking with us direct. It is time that us hoteliers put more money back into our own pockets!
Jay Hartz, CHA is the Owner of the Hotel Pattee as well as the Owner of Next Generation Revenue Per Available Room, LLC which is a Training and Consulting Firm. Both are based out of Central Iowa. Jay can be reached at firstname.lastname@example.org. Visit www.nextgenrevpar.com to learn more about his Training Programs.