Online Travel Agency (OTA) partnerships are an essential part of most hotels’ business mix, with OTA bookings sometimes accounting for half of all transient reservations.
NB: This is an article from TCRM
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This is especially true for independent hotels that lack the distribution support of a major brand. Given the significant revenue OTAs can generate, it is crucial for hotels to have solid front desk checkout and accounting procedures in place to ensure they fully capture the revenue from these bookings. Without such procedures, hotels become vulnerable to revenue losses. This is where OTA revenue recovery audits come in. Regular OTA revenue audits, championed by the Revenue Manager, should be a standard practice to ensure full revenue capture and maintain a healthy bottom line.
Why OTA Revenue Recovery Matters
OTA revenue recovery involves auditing past OTA reservations, often up to a year back, to ensure the accuracy of payment details, including verifying that virtual credit cards were charged for the full amount owed for each reservation. This process includes cross-checking OTA reservation confirmations with actual PMS reservations and payments to ensure the hotel is capturing all revenue due. Given the volume of OTA bookings and the many reasons guests may alter their travel plans, mistakes such as incorrect charges or unprocessed payments can occur. Issues like canceled bookings or early departures can lead to virtual credit cards being improperly charged, which gradually erodes a hotel’s revenue and profits over time.
Here are a few key benefits of making OTA revenue recovery a regular part of your revenue management strategy:
- Ensuring Full Revenue Capture: Errors in virtual credit card charges, due to cancellations, early departures, and no-shows are not uncommon. By regularly auditing OTA payments against actual reservations, hotels can identify and correct discrepancies, ensuring they receive every dollar they are entitled to from third-party bookings.
- Mitigating Revenue Leakage: Without routine OTA revenue recovery audits, revenue leakage can accumulate unnoticed over time, potentially affecting a hotel’s overall profitability. By consistently monitoring and correcting OTA revenue discrepancies, hotels prevent long-term financial losses.
- Improving Front Desk and Accounting Processes: Revenue recovery audits can reveal opportunities to enhance front desk and accounting reconciliation procedures. If hotels consistently recover significant amounts of revenue through OTA revenue recovery audits, it indicates a need for process improvements during checkout or accounting reconciliation. The goal of these audits is not only to recover lost revenue but also to correct procedural failures that allow revenue to slip through the cracks.
We work with OTA revenue recovery audit services as a core part of our consulting practice. We recommend these audits to all our clients because we’ve seen firsthand how they help prevent revenue losses and identify process improvements. Our partner vendors are skilled in performing detailed audits that ensure hotels are capturing the full amount owed for every OTA booking. By partnering with TCRM, hotels can confidently know that we not only deliver on traditional revenue management services, but also implement these audits as a regular part of their revenue management strategy, safeguarding their bottom line.
Conclusion
Implementing OTA revenue recovery audits is crucial for maintaining a hotel’s financial health. We’ve built into our services a process for ensuring that hotels capture every dollar from OTA bookings. By recommending and conducting these audits for our clients, we help hotels not only recover lost revenue but also strengthen their operational processes. This proactive approach ensures profitability, supports long-term success, and makes OTA revenue recovery an integral part of effective revenue management.
