Are OTAs Dominating Hospitality?

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Travel Agency

There’s no question that online travel agencies (OTAs) are beneficial to all businesses within the hospitality industry. More consumers than ever before are going online to book hotels, and they tend to lean towards OTAs, who offer the biggest discounts. This is great for boosting bookings, but it doesn’t give hotels a large amount of profit. It therefore shouldn’t be an avenue that hotels are relying on for bookings, because they’ll find themselves quickly losing out on profits.

The question is though – how can hotel managers reclaim control of inventory and distribution without caving into the OTA downward spiral of lower profitability? Well, the answer is simple really, although executing it maybe not quite so much. Hotels need to put more into driving direct bookings, which deliver the highest profit. To do this, you need to make sure that all of the distribution channels managed by your hotel are being utilised.

The key here is content marketing. Blogs, social media, websites and email are the top ways to attract your customers with interesting and engaging content. By keeping these updated regularly with high-quality content you will see a boost in the number of direct bookings you receive. The OTA market has slowed down in recent months, which has given hotels the opportunity to up their game. This is, however, unlikely to last for long.

Amazon came and went with its intention to become a player in the online travel distribution landscape. But perhaps the answer lies within how TripAdvisor and Google will play the game. TripAdvisor has, over the years, morphed from a simple review site into a fully-fledged OTA. After signing a few big hotel chains, including Accor and Marriott, it signed an exclusive deal with Priceline and its Booking.com subsidiary, making direct booking from TripAdvisor possible. Already hosting a range of information on restaurants, tours and activities sees the power of TripAdvisor really expand. With the capability to make bookings for almost any hospitality activity around the globe, TripAdvisor has the opportunity to potentially become the biggest OTA out there. And let’s not forget Google.

The internet giant has only taken small steps towards this industry, with the launch of Hotel Finder and Flight Search within the search engine. However, with Priceline and Expedia among Google’s top five biggest clients in terms of Adwords revenues, is it really worth stepping on their toes? Well, rumour has it that Expedia and Google are in talks for exclusive distribution, mirroring the TripAdvisor and Priceline deal mentioned above. Could this be true? Only time will tell, but one thing is for sure … if Google becomes a player in the market then it will likely take over. Watch this space…

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