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Fed-up with naughty OTAs..?

  • Are you fed-up with some OTAs using your wholesale rates and sell them online?
  • Are you fed-up with some OTAs discounting your online rates to undercut others?
  • Are you fed-up with some OTAs creating fake last-minute or other discounts that you didn’t give them?
  • Are you afraid to stop working with such OTAs because you are afraid to lose all their online business?
  • Do you try to stop working with such OTAs but find it hard to have them completely stop selling your hotel?

If you have answered “yes” a few times I suggest you continue reading and hopefully that will make it easier for you to make the only right decision.

“In an abusive OTA relationship – Get Out”

For customers’ sake, hotels and OTAs are supposed to be business partners, right? Partners. You do business together. Together! If “partner” or “together” are words an OTA does not want to understand any more then you, the hotel, should stop working with that OTA and stop their destructive nonsense…! Period.

There are a lot of fed-up hotels out there, but very few actually take action, and I continue to hear and read hotels complain about this again and again and again… The battle with OTAs will not go away though and the only sure thing is that at least some OTAs will always continue to find new ways to outsmart and undercut hotels and competitors. Lots of hotels try to fight this battle, but the majority are either ill-prepared or only half motivated to actually fight. They end up fighting forever and waste not only valuable time, but actually also a lot of profit.

Before explaining why the answer to the last 2 questions should be “no”, let me explain how OTAs’ focus has changed and hotels now can benefit from a much more level playing field.

As independent hotel you must understand that most OTAs are no longer focused on “stealing” YOUR direct bookings. That battle was won long ago by the OTAs, spending massively on Pay Per Click search engine marketing, using your hotel’s name and aggressively driving potential customers direct to their OTA websites. You never had a chance to compete in this expensive battle and today there simply is too little direct hotel bookings left through your website for OTAs to be really interested in…

Today OTAs are entirely focused on stealing bookings from other OTAs. As search engine marketing became the number one source driving visitors to OTA websites the OTAs continued the battle to outwit and outbid each other through search engines. This battle drove Cost Per Click through the roof and search engine marketing became so expensive that OTAs had to find other ways to drive traffic. Metasearch came to the rescue and as travelers increasingly started to use metasearch websites such as TripAdvisor, HotelsCombined, Trivago, etc to find and compare hotel prices, OTAs started to shift focus and marketing budgets to compete on metasearch websites rather than search engines.

Metasearch taught travelers that with very little effort it is easy to find a better deal for a specific hotel and today metasearch has become the number one source of traffic for OTA websites. Today’s frequent traveler has become more loyal towards metasearch websites than towards a specific OTA.

So, let’s look at the question that often raises the most serious concern:

“Are you afraid to stop working with OTAs because you are afraid to lose all their online business?”

I know you are not sure those bookings will be replaced by your own website or other OTAs. Years ago I was in this situation myself a few times and I admit I was more than concerned – it was a real risk. Was. Times have changed and today I believe there is no need for serious concerns anymore and the risk is manageable. Let me explain why.

As mentioned, metasearch is the number one source of traffic for OTAs; that’s where most travellers start when they want to book a hotel. So, when you have stopped working with a specific OTA the next time a customer is looking at your hotel on a metasearch website they will still see plenty of other OTAs displaying your prices and they will simply click on any of the remaining OTAs. It is really that simple. Today EVERY frequent online traveler knows the major OTAs in their markets and OTA loyalty is a thing of the past.

That is the good news. But that’s not all. There is a bonus, some great news. Having one less OTA trying to undercut others on metasearch websites means better rate parity for your hotel. Better rate parity means higher conversions, through your own website AND through other OTAs. So stopping an uncontrollable OTA selling your hotel at lower rates than others will therefore not only result in other OTAs compensating for lost bookings from that OTA, but will actually result in more online bookings in general, PLUS you can expect higher conversions on your own website. Want to see proof? Here is a real-world case study.

Online Booking

I have changed the names of actual OTAs and do not show absolute figures, but these are real figures of a resort in Bali.

OTA A was consistently abusing wholesale rates, even after repeat reminders. End of April the agreement was terminated and from May onwards OTA A was no longer selling the resort. As the graph shows, in June OTA B made up more than what was “lost” from OTA A and total online bookings in June set a new record. In July the resort’s own website also started to see a significant pick-up in direct bookings and a new total online bookings record was set, and the resort’s own website became the 2nd largest online channel in terms of bookings, after OTA B.

There is one more factor at play that will see your online business through other major OTAs soar to new highs. When an OTA is undercutting other OTAs you not only lose bookings from the OTA that is undercut, but also rankings on this OTA. Ranking on major OTAs is driven my many factors, but conversion, actual sales volume and rate parity are all very important factors, so once rate parity improves the conversion will go up, sales will go up and then rankings will improve, causing a positive domino effect and a lot more bookings.

So, that leaves the second question:

“Do you try to stop working with such OTAs but find it hard to have them completely stop selling your hotel ?”

How to make sure an OTA will completely stop selling your hotel? If you close their allotment they will simply continue to use wholesale rates. Almost every hotel that has been in this situation knows that. You can terminate their agreement, send them dozens of emails, but they will continue to use rates from other sources. You obviously have to work with your wholesalers as well and make sure you control what they do with their rates, but as more and more wholesalers are connected with each other that exercise is also often a huge time waster. What is more important, and more effective, is to inform the concerned OTA formally that you terminate all cooperation and will not accept ANY customer that has booked through them. Tell the OTA that you will ask all customers at check-in how they have booked the hotel and if any of them mention the concerned OTA that you will NOT accept them, and that you will show the customer that you have informed the OTA that you will not accept any of their customers. And then stick to that! Make it firm. Yes, you most likely will end up with a very upset customer at the reception. Make sure you know in advance how to handle them, and perhaps help them with alternative accommodation, or treat them as walk-in customers. Once that customer understands that the OTA they have used to book your hotel was informed by you and therefore wrong, they most likely will seriously complain to the concerned OTA. And trust me, an OTA cannot afford to have such major issues and complaints and will eventually stop selling your hotel. Trust me, this works.

So… I hope you now realise that winning this battle is not as hard as you might think. And the good news is that this battle comes with little or no risk of actually losing online bookings; in fact, a victory will most likely see your online bookings increase to new highs!

Kind regards,

Yusuf IJsseldijk

PS: I am happy to discuss further with you about this subject, just send me message!

PS: want to read more about some harmful moves of some OTAs? You may find this an interesting read: https://www.hospitalitynet.org/opinion/4089670.html

#naughtyOTA #onlinedistribution #hotelsalesmarketing #digitalmarketing

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