Online travel agencies (OTAs) have taken the hospitality industry by storm. What began as a platform for selling excess inventory when demand was low, has grown to dominate the entire booking landscape. Today, the majority of reservations worldwide are made via these online platforms, which makes OTAs an essential component of all lodging operators’ distribution strategies—often accounting for the majority of a property’s revenue.
While the cost to play the OTA game can be steep (commissions range from 10-30%), the benefits of exposure on these platforms are many. Not only does an OTA distribute your business to a wider audience than you would be otherwise capable, but it can also act to promote direct bookings on your website due to the billboard effect. And it’s worth noting that OTAs can aid international customers in understanding and booking with your property. Offering details in the appropriate language and currency helps open your doors to guests from all over the world.
When it comes to your OTA strategy, it’s a good idea to diversify. Don’t rely on 1 or 2 agencies; you want your property to be visible across multiple channels. But there are a lot of different platforms to choose from, so how do you know which OTAs to use? The right distribution channels will vary for each property, but here are a few things to consider when choosing the right OTA for you:
Cost
Obviously, one of the biggest concerns (and most important things to consider) is the cost of partnering with an OTA. There’s quite a bit of variability in the commissions charged by various OTA platforms, and some can be prohibitively high. When determining if an OTA is worth the cost, remember to account for the customer lifetime value (CLV) of guests brought in by the channel in question. If your landing high-spending, returning guests, steep commissions may ultimately be worth it.
