When it comes to hotel distribution, there’s an ongoing debate about the value of bookings from Online Travel Agencies (OTAs) versus direct bookings.
NB: This is an article from TCRM
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While it’s true that direct bookings are nearly always more profitable due to lower distribution costs, the notion that OTA bookings represent a failure to a direct booking growth strategy is a misconception.
In reality, OTA bookings are often a critical part of an overall successful revenue strategy. The true failure lies not in receiving OTA bookings, but in failing to convert those OTA guests into direct booking customers in the future.
OTAs as a Hotel Marketing Channel
OTAs are powerful marketing platforms with massive reach. They invest heavily in advertising, SEO, and brand recognition, drawing in a global audience that might otherwise be unaware of your property. For independent hotels, competing with these giants on the same scale is impossible. Leveraging OTAs allows hotels to tap into this expansive marketplace, filling rooms that might otherwise go empty.
While it’s tempting to view OTA commissions as a drain on revenue, it’s more constructive to see them as a hotel marketing cost. Just as you would pay for a Google Ad or a social media campaign, the commission paid to OTAs is an investment in exposure. An opportunity to capture the attention of guests who don’t know of your hotel or would not have found it through your direct channels. This initial exposure is the first step in the customer journey, one that you can later capitalize on.
The Value of OTA Guests for a Hotel
It’s crucial to recognize that guests who book through OTAs are not inherently less valuable than those who book directly. In fact, they represent an untapped opportunity. These guests have chosen your hotel over many others, albeit through an OTA. The key is to turn their first stay into the beginning of a loyal relationship.
From the moment an OTA guest walks through your doors, the goal should be to impress them with an exceptional experience. This goes beyond just a comfortable room – it includes personalized service, thoughtful touches, and a seamless stay. By exceeding their expectations, you set the stage for a future relationship that can bypass the OTA entirely.
5 Ways to Turn OTA Guests into Direct Bookers
The real success lies in converting these OTA guests into direct booking customers for their next stay and beyond. Here are some strategies to turn OTA guests into direct bookers:
- Capture Their Data: Ensure you gather as much information as possible about OTA guests during their stay. This includes email addresses, phone numbers, preferences, and stay history. Use this data to personalize their experience and to reach out to them directly post-stay.
