Should you be using an OTA?

Q:I keep getting mixed messages about online bookings; should I
offer them on my website, should I go with a dedicated OTA, or
should I even bother at all?

A: We’re all a little bit sick of hearing about the recession
and whilst it has been a negative time for many, it has also been
instrumental in reshaping and redefining the hospitality industry
in recent years. Not only are we seeing chains expanding more than
ever before, boutique and unique hotel experiences have also been
given an opportunity to thrive, ‘staycations’ have become
fashionable again, short breaks are de rigueur, online travel /
booking agents have boomed on a model of commission, and peer
reviews have become the go-to advisory resource.

We are working and operating in a completely different industry
to the one we were in ten or even five years ago, but these changes
also bring an opportunity for you to exploit.When it comes to
online bookings, there are a variety of options that you can choose
from:

  • A membership with online travel or booking agents can
    facilitate online bookings for a commission-based fee, at the same
    time promising to deliver new customers through their national and
    often international marketing campaigns. They spend a lot on their
    search engine optimisation and that’s why you hear the complaints
    that their listing for your hotel appears above your actual
    website. They are great for driving new business, but can be an
    expensive choice if you haven’t exhausted other business
    opportunities first
  • Online booking widgets which offer you a subscription-based
    service to embed the widget in your website, thereby facilitating
    online bookings direct to you, but using a ready-made service. The
    benefit of these services is that costs are fixed and not dependent
    on the number of bookings you take, plus they’re really easy to
    embed. On the downside, costs are ongoing and will exist unless you
    decide to stop online bookings, so you need to account for the
    overhead
  • A self-built system specified to your exact number of rooms and
    requirements and synced to your reception diary. This will need to
    be built by a web developer with an understanding of CRMs and APIs
    and will have the biggest up-front cost, but once you’ve paid for
    it, it will have no ongoing overheads. What this does mean is that
    you own the system and aren’t at risk of rising prices or
    commissions

The only other option that you have is to ignore online bookings
completely and offer traditional phone or email bookings only. The
risk with this is that you miss out on bookings that you could
otherwise have gained, simply by not offering enough choice and
variety to users, particularly out-of-hours.

According to a Travel & Tourism Survey by the MHA, only 26%
of hospitality businesses offer online bookings, yet of those
businesses that do, 50% reported a year-on-year increase in direct
online bookings. What I haven’t yet been able to do is quantify
these survey results specifically for the UK, identifying what
exactly this may mean for you in true financial terms, however
internationally, almost 150 million bookings are made for travel
each year, and just over 65% are made on the brand website for
hotels or service providers, with just 19.5% made through merchant
sites like Hotels.com and Expedia. 65% of bookings is a pretty big
incentive to consider adding an online booking service.

Just like I said with last month’s article on mobile
optimisation of your website, the ultimate choice will come down to
you and should be dependent on your overall performance statistics
and strategy. If an online booking service like booking.com is your
automatic go-to and you don’t put much store in your own website,
then direct online bookings won’t be your thing. If however you
are working to build your online reputation and reviews and want to
gain recognition, loyalty and word of mouth referrals, then your
need for an online booking system will be much higher!

One final point that I should add is that it is entirely
possible for you to ‘mix and match’ the services, introducing a
booking agent as well as an online booking portal. If you do, make
sure you track where visitors book from, ensuring that you can
measure and monitor the profitability of each booking, both through
the room and through the added value items like the restaurant and
the bar. This information will soon tell you what is valuable to
your business and what is not!

This feature first appeared in the July 2015 issue of
Hotel Owner. 

Source: FS – All-Hotels-Blogs
Should you be using an OTA?