The first reason why it may not be entirely beneficial for hotels to prioritize direct bookings over online travel agencies (OTAs) is that OTAs can provide the visibility needed, especially when it’s most crucial. Consider low-season periods when hotel supply exceeds demand; what do you need most?
NB: This is an article from Direct Your Bookings
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Increased visibility, because more visibility offers better chances of securing bookings. Whether these reservations come directly or through OTAs is secondary, as the primary concern is filling rooms that would otherwise remain empty. And who can guarantee more visibility when it’s needed the most? OTAs, of course.
The reason behind this is that OTAs give more prominence to hotels with better conversion rates. It’s a simple business logic: imagine two hotels on booking.com, each initially generating 100,000 views in a specific month. Hotel A converts 100 reservations, while Hotel B generates 300 reservations on booking.com’s platform. Since booking.com earns from commissions, which hotel do you think will receive greater visibility now? Naturally, it would be Hotel B.
This logic isn’t hidden; it’s evident in booking.com’s documentation. The algorithm takes various factors into account, with one of the most important being the conversion rate. And it’s perfectly logical, Booking.com is a business like any other that wants to make the most out of their products. Hotel B sells better than Hotel A? Then Hotel B gets more visibility.
Therefore, if we focus on obtaining more direct bookings during low-season periods, we are essentially diminishing our possibilities to get the visibility that we so desperately need.
So, what is the number one goal during low season? Is it to obtain more direct bookings or simply more bookings in general?
I would argue that securing more bookings overall is the priority. If it means sacrificing a bit of profit margin for the sake of gaining greater visibility and consequently attracting more reservations, then so be it.
Cost-Benefit
The second reason one might not necessarily focus on direct bookings is that, at times, the overall costs needed to boost direct bookings may not justify the risk of not getting enough volumes. Even though typically, customer acquisition costs favor direct bookings over OTA bookings, in order to obtain direct bookings there are certain costs involved: having and maintaining a high-performing website, appropriate marketing and advertising budget, effective campaigns, SEO optimizations, and conversion rate optimizations, even the Staff that needs to be paid in order to put forth all the direct-booking initiatives you might have come up with.
