We have always defended the notion that the value OTAs have is to provide visibility to hotels and help them generate new sales, sales that otherwise would be impossible to access. This greater exposure, by generating more demand for you, allows you to increase your average price, not only for OTAs but also for the rest of your channels, something which is highly positive and has a direct impact on your RevPar.
These are two great value proposals which, at least to this day, make OTAs key elements in online sales of hotels.
But that is where it all ends, or at least most of it. All sales channelled by Booking.com or Expedia whose origin is a client who already knew you, a recommendation from a friend or a client who found you on TripAdvisor are completely absurd. You are paying a high cost for a sale that was already guaranteed, so to speak, as long as you cover minimum requirements: good technology, website and booking engine, languages and adequate usability on your direct channel.
This is the reasoning to argue in favour of the strategy that, as a hotelier, you must try to remove OTAs from AdWords, since they do not provide value. We estimate that approximately 15% of sales from Booking.com come from AdWords with your brand name. It is understandable that they are not keen to stop bidding. A large part of their business comes from this simple practice. Can you imagine moving your direct channel, even if it was half the amount, without losing out on total sales? Fortunately, hotels have internalised the importance of removing OTAs from AdWords bidding on your brand and some are already seeing some great progress.
However, the new battle with OTAs takes place on metasearch engines, since they already represent 45% of unique visitors of the travel industry. Once again, OTAs have been the first to integrate into metasearch engines, which has helped them maintain and even increase their dominance. Their presence there is an “acquired right”. It is estimated that Booking.com already allocated between 25% and 50% of its marketing investment in metasearch engines. Doesn’t it sound exactly the same as AdWords? Who will be the brave soul that will get them out of there? Those who have tried it have obtained a negative reply. For OTAs, leaving metasearch engines is not even up for discussion, at least for now. They have nothing to gain and a lot to lose.
Why OTAs don’t provide value with their presence on metasearch engines
Most clients who reach metasearch engines have already chosen the hotel. They are clients who knew the hotel previously or it was recommended by a friend or found on TripAdvisor or on an OTA. Their visit to trivago, TripAdvisor or Google Hotel Ads has a clear objective: finding the best price for their booking. The price is, and always will be, the essence of metasearch engines. The matter at hand is…
