OTA search results often mystify hotel revenue and channel managers. There’s not always a clear reason why one property ranks higher than another.
NB: This is an article from OTAInsight
What is clear is the revenue impact: when talking to hoteliers, Booking.com’s market managers would often highlight their estimate that 80-90% of bookings go to hotels on the first two pages.
So how does a property get ranked higher in the results?
Factors that influence ranking vary by OTA, but generally include a mix of the following: the commission payout, overall room availability on the platform, rate parity when compared to other OTAs and metasearch sites, and guest reviews.
One factor that doesn’t vary is conversion rate. If your property converts often, it ranks higher. Booking platforms want their customers to find what they want, and find it fast. Properties that scratch that itch are rewarded with higher positions – a caveat being that rankings are calibrated to avoid the disproportionate dominance of fringe properties that traditionally have very high conversion rates, such as youth hostels.
So, in order to be as well-positioned on these platforms as possible, consider these seven tips to propel your property up the results — and book more guests.
1. Manage your reputation
Ratings and reviews are more important than ever. An OTA wants its customers to have an on-property experience that matches their expectations. That’s one reason why there’s a direct correlation between reputation and revenue: OTAs push customers to properties with better reputations.
Use all available listening tools to monitor your reputation across both OTAs and social channels. Respond to all reviews, especially the negative ones. Have a strategy for crisis communications. Outside of your physical property, your reputation is your most valuable asset. Reputable hotels always place higher!
2. Solicit reviews
The best reputation management is to start from the guest experience. Don’t just wait to manage the reputation after-the-fact; solicit reviews from departing guests. It could be as simple as training desk staff to make the ask in their goodbyes. Review solicitations should also be a part of guest communications wherever appropriate and in line with contractual obligations.
Asking for reviews accomplishes three things: 1) It shows the guest that you care, increasing the chances of a positive review; 2) It keeps reviews fresh, as recency is a key factor in ranking reviews; and 3) It offers real-time feedback to improve your operation. All three of these things are positive inputs in improving your ranking through a better guest experience.
The best thing you can do for strong placement in search results is to provide a stellar guest experience that fuels positive guest reviews!
3. Keep pricing competitive and rational
For most searches, OTAs have a clear mandate from users: prioritize hotels with the best rates for a specific search.
Given that the majority of users are price-aware, rate shopping is the core to competitiveness on OTA search results. Rates should make sense for the property, its amenities, and its location, while abiding by any contractual agreements.
Rates should also be rational. OTAs rate shop too! If it’s determined that a rate isn’t rational for the property type or date range, a property will drop down the rankings. An OTA will rarely reward a rate that doesn’t align with comparable hotels nearby.
Using a rate intelligence tool, ensure that your pricing is competitive. Keep sight of rates, and take a real-time approach to keeping prices accurate. This is the always-on work of revenue management!
4. Refresh your descriptive content
OTAs don’t want to show incomplete listings to users. And if the content hasn’t been updated in awhile, or the photos are terrible, the OTA will penalize.
It’s all about conversion. The better job your listing does at converting, the more likely it is to be shown higher in the results.
According to Expedia, full room and property descriptions (as opposed to partial descriptions) increase conversions by 5% and doubling the number of photos can increase booking rate by 4.5%.
Consider the end user experience when uploading descriptive content to your channels. Think about how someone searching for hotels will see your property, and adjust accordingly to put your property in the best light.
Leverage great photos, and offer at least three photos for each room type on offer. If you’re using a technology vendor to distribute content, set time each month to verify that your content is indeed being successfully distributed.
5. Monitor rate parity across channels
A massive push for direct bookings over the past years has led to strained relationships between hotel brands and OTAs.
Many hotels offer loyalty discounts to brand.com bookings. Yet these can backfire if not properly monitored. “Dimming” was an OTA practice that punished such properties by pushing them down the results. While this practice has mostly faded, it must be mentioned.
Don’t risk punitive actions from your most important OTA distribution channels. Follow your agreements, and have clear differentiation for any rates offered exclusively on brand.com.
Also, be wary of any subtle bias that creeps into your OTA listings:
Consumers are less likely to notice changes to sort order, withholding of special logos or icons, or reduction (rather than elimination) of hotel photos. Moreover, travel booking intermediaries have a history of designing bias to evade detection, making it particularly plausible that OTAs might invoke similar methods.
6. Understand your data – and then trust your tools
With data, it’s quality over quantity. What’s the use of having a lot of data if it’s wrong? By understanding the sources of your data, you can best assess their accuracy.
While this tip is not as clear-cut as the others, we mention it to emphasise the pitfalls of relying on data to drive decisions. If you don’t know where the data is coming from, then the insights you derive from it could be faulty.
Once you understand your data and trust its purity, then the insights are more likely to be accurate and actionable. These are the business intelligence insights that improve profitability for hotels.
7. Manage your channels
Proper channel management helps hoteliers push inventory to the most profitable channels.
When you have insight into your revenue mix across channels, you can prioritise those channels that bring you the most business. This information can then be used to deliver competitively priced inventory to your highly-converting channels.
The OTA algorithms generally bestow better placement to listings that convert more often. So create a virtuous cycle by allocating more inventory to channels that convert!
You might also consider tweaking your operations to be more guest-friendly during slower periods, or on certain channels. For example, offering a more lenient cancellation policy often results in a higher placement.
Bringing it all together for best results
Never forget the fundamental formula when it comes to your distribution partners:
Profit = (Number of room nights sold x average price x commission percentage) – customer acquisition costs
Given this formula, OTAs prioritise properties that help them maximise profit – namely through selling more rooms at the highest price possible. And hoteliers should prioritise channels that do the same. This mutual focus on conversions means that both sides win when a property has a strong reputation, great reviews, and a steady hand when it comes to price parity, rate setting, and channel management.
By following these 7 steps to push your property up the OTA search results, you reward the best-performing channels — and maximise your own profit as well.
