On one side, you have OTAs (online travel agents) that are vital distribution partners to liquidate unsold inventory and put heads in beds. On the other side, you have the hotel’s direct channel, their website, which is the most profitable for online booking.
NB: This is an article from Staah
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Establishing a better mix between OTAs vs. direct bookings from third-party distributors and direct bookings or the right balance OTAs vs. Direct can help modern hoteliers maximise revenue and take full advantage of projected market growth.
The OTA dominance and advantage
The OTA dominance in the distribution space is hardly one you can ignore; almost 2-1 share of bookings according to market reports. The primary drivers for this is their nimble nature. They are also well-armed with technology and highly knowledgeable of online shopping tactics and strategies. In addition, they leverage their own loyalty programmes to keep potential guests shopping on their channels.
There are some distinct advantages of partnering with OTAs.
- Wide reach: OTAs have a global presence and extensive marketing budgets, helping properties gain visibility to a broad audience.
- Marketing and advertising: OTAs invest heavily in marketing, which can drive significant traffic and bookings.
- Customer trust: Many travellers trust OTAs due to their established reputation and user-friendly platforms.
- Distribution: OTAs provide a diverse distribution channel that can help fill rooms during off-peak times.
This dominance comes at a cost. And hoteliers are quite familiar with how rapidly these have grown in the last few years. Hence, the turn to optimising direct bookings.
Why direct bookings matter?
- Higher profit margins: Direct bookings eliminate the commission fees paid to OTAs, increasing profitability.
- Control over customer data: Direct bookings allow properties to collect guest information, aiding in personalised marketing and enhancing guest relationships. This also helps foster brand loyalty.
- Customised experience: Hotels can offer tailored packages, room upgrades, and exclusive deals that might not be available through OTAs.
