Although the hatred for the OTAs seems to have lessened slightly over the past few years, there are still many hoteliers who are adamantly against listing their rooms on OTAs.
But no matter your opinion on them, they are here to stay because consumers love their convenience and savings. They are beneficial to hotels as well – even with the sky-high commission rates. While it is possible to operate a hotel without listing your property on any OTA (after all, it is possible – though not optimal – to live without sunlight), it definitely would hurt the property’s bottom line.
So my lesson today is simple – ALL hotels should be listing their rooms on the OTAs, no matter their opinion on the sites’ business practices or revenue model.
To outline why it’s an operational imperative for hotels to list their rooms on the OTAs, let’s look at a comparison of two similar properties in Miami Beach, Florida. Both are three-star boutique properties (less than 50 rooms) close to the ocean with comparable rooms and amenities.
The revenue manager at Hotel A hates the OTAs, so he refuses to list the hotel’s rooms online. Although his occupancy numbers are very low (typically between 55 to 65%), he is able to keep 100% of the revenues from every booking.
Now, Hotel B…
The revenue manager at Hotel B isn’t the biggest fan of the OTAs either, but he does recognize how important they are in marketing and selling his rooms, so he consistently lists his property with the top 5 to 6 OTAs. Unfortunately, the hotel has to pay a huge commission rate, losing him money on each booking. But on the upside, Hotel B’s occupancy is consistently high (close to 90%).