Effectively managing room distribution to OTAs is critical to profitability. Here are some top tips on how you can do this.
Use OTAs as Billboards
Let’s face it; OTAs’ reach can hardly be ignored when considering your property’s distribution and marketing mix. They form a huge chunk of the online booking systems for hotels worldwide. Not only do they significantly increase your online presence, OTAs are a top online booking system for hotels to diversify into a new client base.
With this in mind, position your hotel on a wide range of OTAs. From here on partnering with a suitable hotel management software such as a channel manager is important to drive maximum value from your OTA partnership. Being integrated to a number of OTAs, a good channel manager makes wider online distribution easy. You’ll also be at ease knowing that your channel manager is constantly innovating to keep up with OTAs’ dynamic technology – one less thing for you to worry about!
Among its many benefits, a good channel manager offers insights that will allow you to manage your inventory efficiently, dialling up your presence where return on investment is higher – more of this in the next point of this blog.
Let your Channel Manager Insights guide you
Look beyond the gross revenue of the initial guestroom booking that an OTA (or any distribution channel for that matter) generates. Customer acquisition cost (CAC) is important for your revenue performance or meeting budgets, but let the customer lifetime value or the gross profit from all historic purchases for an individual customer be a key informant of your distribution choice.
STAAH’s Instant Channel Manager Insights is a fantastic application feature of this hotel management software. It looks beyond the absolute booking numbers and into the conversion funnel to allow you to evaluate which channels are working for you. Insights is a valuable platform that provides properties with the information they need to drive their online strategy. Contact your STAAH account manager to ensure you’re making the most of the data available to you.
Use OTAs to your Advantage
Visibility on the OTAs comes at a cost. It is important to have a strategy that leverages visibility against commissions paid on bookings. For instance having a dynamic pricing structure that responds to the demand and availability as opposed to a more fixed best-available-rate structure, will prove beneficial. This will allow you to increase your yield on available rooms.
OTAs give hoteliers the opportunity to offer many packages and services to their potential guests. Make the most of this offer by diversifying the packages you sell through them. Use them to sell a variety of promotional rates, packages, and upgrades that will support a higher average daily rate (ADR).
Don’t ignore Direct Sales and GDS
Your website is your brand’s online presence. The direct sales from your website, if managed well, can have the lowest CAC – the best any hotelier can ask for. In fact according to a Google research 57% of travellers use OTAs when planning a trip and 52% visit a hotel website after. Make sure your website is geared to tap into this goldmine of visitors through industry-leading products such as the importance of Global Distribution System (GDS) as a feeder of information to world-wide consortia of travel sellers remains important in the industry, especially to capture the commercial demand generated. When considering your distribution mix and what to allocate towards OTAs, don’t forget the power of this giant.