How to navigate the changing world of OTAs
The Wotif/Expedia merger is almost behind us and properties are now calculating the fallout.
This merger was critical to the continuation of Wotif. Without this injection of capital, the ongoing viability of this agent was uncertain due to many factors, increased competition resulting in loss of market share, along with a critical requirement for a large financial investment to their tech platform, in addition to stock providers who refused to acknowledge the need to increase commissions.
Whether or not Expedia keep the Wotif brand remains to be seen, however it is too early to predict whether the Australian consumers will embrace Expedia in the same way they did Wotif and more recently Booking.com. It may be critical to the viability of Expedia locally to remain under the guise of Wotif, a much loved brand by many Australians and properties alike. Perhaps with this renewed investment and guidance, Wotif will become the phoenix of OTAs and rise from the ashes to become the forerunner once more.
New to the market in a big way are the meta search opportunities for your property via Trip Connect, Hotels Combined, Google, Trivago, and Skyscanner amongst others. These meta sites allow your property to be displayed alongside the major OTAs for consumers searching for the best deal. By displaying the best price across a range of agents to the consumer, the traveller saves much time in their searching, which should result in a direct booking to your property providing you have price parity under control. Of course this comes at a cost but in some cases this appears to be less than some OTAs, which can only be good news for the industry.
Check out the current issue of Resort News to read the full article.
However, of greater concern to all accommodation managers currently is the introduction of Booking Suite into Australia. Many of you will not have heard of this product, it’s a side arm of Booking.com offering website solutions and booking forms for your property. The sales pitch pushes the obvious benefits. Booking.com invests heavily into SEM, SEO, and AdWords etc and is the largest provider of bookings to properties at this moment in time.
Using the services of Booking Suite should bring with it many of these benefits, or so they say, in return for a commission for direct to property bookings, approximately 10 per cent. The rates are populated from your Booking.com inventory and should mirror their site.
What they fail to mention are the potential drawbacks to your business of which there are many. Currently your property benefits from what we call “the bounce”. A majority of consumers looking at your property on an OTA site will eventually find their way over to your website to review what deals you may have for direct bookings. Booking Suite will be powered by whatever you display on Booking.com, so the opportunity to vary your prices or room stock has now been taken away from you.
In addition you are now restricted from displaying on the new meta sites, which seem to be the possible future of online search. Should you list on the meta site direct and happen to attract a direct booking, you will pay two lots of fees; one to the meta site and one to Booking Suite, which is simply cost prohibitive. It may be there will be a clause in your contract that you cannot participate in these sites at all; this is still unclear as we’re not privy to the contracts at this point in time. The consumers may become deterred from searching properties direct across the entire industry should they constantly find an OTA when they end up on a direct site.
We may be inadvertently educating the traveller not to bother leaving an OTA site at all, which in turn erodes your capacity to capture direct unique bookings, a huge value to your business.
In addition how will the other OTAs feel if they learn you have elected to “partner” with Booking.com in this manner, under the guise of Booking Suite? Will they choose not to promote you as well as they may have in the past as they know only too well the impact of the bounce on their own marketing spend.
In simple terms, Expedia for example may choose to promote your property highly, only to have the consumer bounce to your website, resulting in a possible direct booking, ultimately feeding the profits of Booking.com. I don’t believe Expedia or any OTA would be encouraged by this thought. Therefore your visibility across the whole OTA landscape could be seriously diminished.
In order for your business to survive over the coming years as the battle for on line market domination continues, it is critical that you keep your property as neutral as possible and open to business from any source. Pay for your new web site upfront that need cost you no more than $2500 plus photos if required.
The Wotif of three years ago is no longer the Wotif of today and without doubt the Booking.com of today will not be the same Booking.com three years from now. All agents know the environment is shifting by the day, each taking a bite out of the others cheese. Make sure your own cheese is protected and stockpiled for your own use and not eroded by the bigger mice of today.
AccomNews is not affiliated with any government agency, body or political party. We are an independently owned, family-operated magazine.
