OTA commissions: Can you cut back?
No one underestimates OTAs marketing strength, yet everyone knows the high cost OTA bookings comes with
The popularity of online travel agents (OTAs) has always put accommodation providers in a difficult position. On one hand, their pervasive reach and high advertising budgets bring vital brand awareness for properties. Besides many guests prefer the familiarity of booking through well-known OTA brands.
Yet, this reach comes at a high cost, 15 percent – 20 percent for every booking. At times such as now when the industry is crippled by a virus, the expense is even harder to bear.
So, how can you reduce your dependence on OTAs?
Firstly, OTAs are not your enemies
Don’t play the victim. OTAs are where your guests search most, and they are here to stay. They offer something you cannot recreate – reaching the right people, at the right time. So, stop weeping about commissions and leverage this reach and guest booking journey in a manner where you can make the most of OTAs’ reach.
Boost direct bookings
We all know negotiation of commission rates is not feasible given the power of OTAs. In fact, if you push too hard you may find yourself cut off from their channel.
Luckily, an OTA is not the only touchpoint in a guest’s booking journey. There are others, including your website. If you optimise it, converting OTA lookers into bookers, you can grow direct bookings and reduce OTA commissions. Let’s look at a few ideas to grow your direct bookings.
Create a stunning, user-friendly website
Your website is your shop window. Every opportunity of someone peeking through is one to convert them into a sale. For that the shop window has to be very attractive.
High-quality videos and images that load fast and tell your story in a compelling manner are your opportunity to invite users to experience what a stay with you would look like. Understand your audiences. Curate your content to suit their needs and answer their questions. Leverage the smarts of a smart booking engine that is responsive to the users’ needs, easy to use, easier to manage at the back-end, and designed to leverage insights to drive up direct revenue.
Make compelling direct offers
Don’t let rate parity prevent you from making offers that will lead to a booking. Get creative with how you can add value to the guest, without breaking the terms of rate parity. Provide access to complimentary amenities. Offer discounts for friends and family or return bookings or throw-in upgrades.
Make sure your booking engine introduces these offers at the right time of a user journey on the website, prompting a booking.
Allow guests to compare rates to OTAs while on your website so they stay and book via your website.
Build a loyalty programme
Guests who have experienced your service, and enjoyed it, are likely to be your biggest advocates by referring friends and family, providing great online reviews, or returning for another stay.
Encourage guests to subscribe to your loyalty programme through incentives and ensure you always have a ready database of people to go to with direct offers and last-minute deals.
Become a proactive digital marketer
With the goal to sell more rooms directly, you need to adopt a more omnichannel approach. Leverage the channels OTAs are masters at to establish your own brand and identity. With a few snippets of code, a lot can be done. If it all seems a bit daunting, consider engaging a digital marketing agency.
Search is powerful medium. Is your website optimised for organic traffic (SEO)? What is your paid marketing strategy on Google?
Equally important digital channels are email and social media. Crossing over between OTAs and social, online reviews are imperative to drive up your brand preference and get booked.
Maintain your profiles on OTAs
A well-written profile, highlighting your experience and amenities on OTAs is very important. Remember, this is where most of your guests will begin their search. In order to interest them enough to reach your website, become great at telling your story on OTAs.
Summing up
It’s unrealistic to target an overnight reduction in commissions – unless you go completely cold turkey on OTAs, which we don’t advise. Implement the above, however, and you should see a steady adjustment of your direct booking to OTA ratio.
Previously published STAAH Blog post
Edwin Saldanha, Marketing Director at STAAH
STAAH Ltd is a New Zealand-based technology company that specialises in innovative cloud-based solutions that simplify hospitality operations and open a world of online commerce for accommodation providers of all sizes. Founded by Gavin Jeddo in 2008, an industry pioneer,
STAAH’s technology suite comprises channel management, direct bookings, online reviews management and gift voucher management system.
Our passionate and diverse team is based across New Zealand, Australia, India, Malaysia, Philippines, Thailand, Indonesia, and the UK providing 24/7/365 support and service to our network of more than 18000+ accommodation partners worldwide.
Our quest for delivering high-quality solutions that deliver results is recognised by industry partners in the form of Airbnb Badge, Booking.com and Expedia Preferred Partner. We are a New Zealand FernMark Licensee.
