If you ask a hotel manager to compare an online travel agency to another life form, the response will generally not be flattering. Lianas in a tropical rainforest, for example. These are the woody vines that climb trees and slowly strangle them, using the trunk and branches as a scaffolding to position their own leaves in the sun. What better analogy for a group of massive sales firms that collectively own the majority of global hotel bookings, and take 15-30% commission on every room they book?
Of course, the relationship between OTAs and hotels seemed more mutually beneficial in early days. Initially appearing as distressed inventory sites (sort of like a Direct Factory Outlet for hotels) companies like Wotif, Expedia and Booking.com expanded the reach of countless hotels through their popular appeal and massive marketing budgets. Many hotel managers started using OTAs as a supplement to direct booking channels – a kind of insurance policy to keep the chips up, never imagining that eventually they would be inexorably bound up with these companies for life .
As time has passed, OTA bookings have become the staple instead of the supplement. Many properties depend on them for a third or more of their business. On top of that, increased commissions have tightened the stranglehold. Hotels have found themselves locked in a cycle of dependency as OTAs get fatter. Managers and stockholders are hungry to control more of their own bookings and claim more of the total profit for the services and amenities they provide but it is a tough battle.
As a result, many properties have continued listing on OTAs while encouraging guests to book direct. If you think of it like a chess game, this is a natural move. OTAs need hotel listings in order to stay relevant – and while parity agreements may prevent hotels from advertising lower direct prices in many countries, travelers can still be offered hidden discounts or other perks when they book direct.
