According to a Google study 52% of travellers visit a hotel website after seeing it on an OTA, and 20% of direct bookings occurred after a hotel was found on an OTA.
Don’t discount online travel agents in your marketing mix yet. These formidable intermediaries have adaptive strategies to make a comeback – and you are a part of this recovery.
OTAs and hotels: what was…
The 2008 global financial crisis saw a rise of OTAs as price comparison became a thing for consumers seeking the greatest value. The click-and-book proposition became the go-to platform for leisure and business travellers, cementing OTAs as a dominant force in the travel industry.
As commissions and push for discounts grew, so did the rift between hotels and OTAs grew. Between 2015 and 2019, the hotels began a concerted fightback to capture more guest bookings through direct channels. Along with brand diversification by OTAs, the appearance of Airbnb, this direct push brought on challenging times for these booking giants.
2020 was the perfect storm. COVID-19 paused travel worldwide. Bookings were cancelled. Call centres were overwhelmed. Hotels were looking for answers on ownership of guest hotel bookings while fighting their own direct revenue decrease.
The OTA comeback…
OTAs are responding to these challenges, adapting to a new normal and planning for the future through investments in new and innovative start-up brands, simplifying their cancellation and payment policies and adapting their purchase of search words and pay per click advertising while emphasising their strength and support in the marketplace, especially with millennial travellers.
Industry experts would say that OTAs are ready to bounce back by leveraging the same factor that made them a dominant force – the ability to compare and book in one place.
As the world ambles through the new normal, people are craving travel. Fear Of Missing Out (FOMO) is big, resulting in impulsive bookings when the opportunity arises. Price is greatly valued, as is safety. Quick browse and book behaviours are back. All these factors combined create favourable conditions for OTAs.
What to expect from OTAs?
As they compete for survival, here are a few things to expect from OTAs.
· Emphasis on cleanliness.
A high standard of cleanliness is the most valued amenity in hotels. To promote health and safety, OTAs not only promote COVID safety protocols followed by properties listed on their platform, they also rank those following safety practices over others.
· More local properties.
· Tailoring of search advertising.
Marketing budgets across the board have been slashed. It is time to get creative when it comes to tailoring advertising to suit the new normal. Price based search ads are being overshadowed by health and safety messaging. Keywords such as “drive to destination” are being brought in more actively into OTAs’ search strategy.
· Better customer service.
Guests want more, for nothing. OTAs are obliging with improved customer service and flexible booking and cancellation policies. Chatbots are more prominently placed on websites to assist with queries quicker.
How should hotels respond?
***Find out the Top Online channels to be listed in your region.
Don’t bank on any single distribution channel; direct or OTAs. Now more than ever before a balanced channel mix is important.
OTAs spend a lot of money in marketing and UX. This helps boost hotels’ visibility. As a booking channel, their preference is still strong, and it is important for hotels to maintain their presence on them – they are the best billboard you can get in these times. At the same time, a viable distribution solution also needs direct bookings representation.
Equally important is a need to understand guests better and respond to their needs by creating packages with greater appeal and ensuring your property offers the safe haven travel-deprived guests are now seeking.
The COVID-19 tsunami has wiped out a lot of the old ways of thinking about hotel strategies. In the face of one of the biggest crises in recent memory, the hospitality market needs to rethink how it operates and build anew. This new does not come in the form of replacing critical distribution platforms, rather rethinking how each of these platforms will grow cohesively in the new normal.