Know and learn what OTAs are, their benefits for your hotel business and in what aspects you should stop relying on them in order to start managing your business in an independent, low cost and online manner.
There are infographics, reports, statistics and experts’ opinions emerging every day on Internet about the revolution that new technologies have generated in the tourism and hospitality industry. However, there are some entities that keep functioning under an old-fashioned way and, over all, under a less than convenient way for independent hoteliers: we are talking about OTAs. In this article we explain how you can manage without them, taking advantage of some online tools, and guided by the expert opinion of Luis Yanes, operations manager at Hotel Monterilla and frequent user of OTAs.
What are OTAs? They refer to Online Travel Agencies and some of the most popular ones are Expedia, Priceline, Orbitz, Booking, Hotels.com and OneTravel, among many others. The main goal of these organizations is to sell hoteliers the idea that OTAs are a great showcase for their businesses and, therefore, an aid to increase sells–in other words, it generates more exposure of your brand and products than the one you could create on your own. The trick? High commissions and a series of other medium and long-term side effects that your would possibly want to avoid in your business:
- OTAs effect #1: Online visibility for your hotel. To appear on these websites’ lists multiplies the amount of potential customers that can find out about your services.
Luis Yañes perspective: this exposure is not for free: “it seems spectacular and a dream for any hotelier, but beware: it has pretty high costs”, since it involves an inventory and differentiated rates management. Besides, “if you have presence in one OTA it is very simple, but the scenario changes when you are in two or more at the same time”.
In Clerk we think that your visibility shouldn’t depend only on OTAs and be controled by them, that is why we give you insights of How to do it without OTAs: a meticulous, constant and creative e-marketing job via social media can create results that not only increase your online visibility, but also generate loyalty and engagement with a more segmented group of customers, an especially important issue when you are an independent, small or mid-size hotel.
- OTAs effect #2: Flexibility on your rates and seasons. Some OTAs offer the chance of adjusting your prices according to certain seasons, which responds to the idea of hotels’ revenue management.
Luis Yanes clarifies this suppossed flexibility: “it only under special conditions that guarantee incomes for the agency: for example, higher commissions, rates with a non refundable policy, etc.”
Clerks team is working on giving you the tools to improve your revenue and REVPAR because we think this is the time to work on new sales channels – see How to do it without OTAs: this is our most recent tool in Clerk, precisely named “Rates and Seasons” allows you to customize certain periods of the year according to your passengers’ demand and specific events in the destination your business is placed.
- OTAs effect #3: No fixed fee. Online Travel Agencies say they have low costs for their customers (in this case, you) since there aren’t any fixed fees: you only pay commission if a sell is generated through their platforms.
Yañes’ words, “it is better to be (in OTAs) than not to be, but every time with less presence in order to be benefited by selling through OTAs, without having to depend on them.”
Clerk says “Time is now for direct sales and fair trade” lets do it without OTAs: We do not charge commissions and also we offer an online booking widget to include it in both your website and your Facebook page, which allows you to be closer to your customers and to work directly on the improvement of your products and services.
To use OTAs sometimes seems the compulsory road to take for some hoteliers, since without their support they feel without an e-marketing plan, direction and out of the “touristic ambience”. Nevertheless, small and mid-size hotelier entrepreneurships are usually the less benefited with this business model that does not have the user experience as its main focus.