You’ve just had a fantastic month. Occupancy rates are up, guests are raving about their stays, and you’re feeling on top of the world.
NB: This is an article from Profitroom
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Then you check your financials and… ouch. Where did all that revenue go? If you’re watching a chunk of your hard-earned profits vanish into the pockets of Online Travel Agencies (OTAs), you’re not alone. Welcome to the world of ‘OTA Dependency’.
“Hotels can lose 20% to 30% of potential guests – and the revenue that goes with them – simply because of poor online visibility,” Klaudia Chmielewska, Digital Marketing Manager at Profitroom, explains.“ When OTAs dominate the online space that should be showcasing your hotel, those losses can exceed 50%.”
The OTA balancing act
OTAs definitely have their place. They’re useful for visibility, especially when just starting out. But making them your number one booking source?
That’s a risky strategy. Here’s how you can walk the OTA tightrope:
- Visibility vs. Control: OTAs offer widespread exposure but at the cost of controlling your brand message and guest relationships. The goal is to leverage OTA visibility while building your direct presence.
- Commission Costs vs. Marketing Investment: OTA fees eat into profits, but completely replacing them requires investing in your own marketing. Find the sweet spot where OTA commissions and your marketing budget optimise overall revenue.
- Instant Bookings vs. Long-Term Loyalty: OTAs excel at quick conversions, but direct bookings allow you to nurture guest relationships. Aim for a mix that provides both immediate bookings and repeat business.
- Competitive Pricing vs. Value Add: While OTAs often focus on price comparisons, your direct channels can emphasize unique value propositions. Balance competitive rates with exclusive perks for direct bookers.
- Broad Reach vs. Targeted Marketing: OTAs cast a wide net, while direct marketing lets you focus on your ideal guests. Use both to maximise your reach and conversion potential.
Breaking free (without going off-grid)
Shifting the balance towards direct bookings is within your reach. Here’s how you can take the driver’s seat: