Independent European Hotels are sleepwalking into an era of increased OTA dependency

For over 15 years that I have been within this industry, Independent hotels here in Europe have been always dependent on agencies, initially offline which then became online.  From the days of GTA (Gulliver Travel Associates) who were all dominant in the early days to now where booking.com has to some extent replaced GTA as the agent where hotels have allowed them to take over their inventory.

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We are though entering a new phase, where it has been clear for some time that Booking.com & Expedia have been implementing two very different strategies to maintain growth and market share.  Expedia has been expanding by acquisition with its latest buys of Orbitz, Travelocity, and Home & Away while Booking.com has been diversifying with its purchases of Buuteeq, due in part to the competition on the horizon from Google & Airbnb.  The recently announced deal that saw booking.com providing global inventory to Tripadvisor Instant Booking effectively makes them now an OTA.

Over the last few years, Tripadvisor has been worked extremely hard in cultivating a positive relationship with hoteliers while reviews, thanks to them, have become an ever more important part for hotel directors to focus on to ensure excellent guest comments get published.  Some hotels have even gone as far as directing their hard-won traffic from their website to their page on Tripadvisor (which also sells your competitors).  Behind Reception, there are now certificates and plaques of excellence from booking.com and Tripadvisor occupying pride of place.  However great these actions are, hoteliers are feeding and promoting the very agencies online that send them business with a 15-20% commission bill.

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We have also seen that OTAs including Tripadvisor investing heavily in user experience, making it easier for you to book a hotel whether from a desktop or mobile device.  From confirmations sent straight to your phone to personalized marketing which provides you with useful suggestions based on your searches.  Due to their size and power, they have the resources and investment to take advantage of the amount of data available to ensure a great user experience.  Most hoteliers would be the first to use booking.com for their business travel as all their personal information is stored there.  Booking engines for the independent hotelier are also sometimes too focused on revenue management techniques rather than user experience.  Book your hotel on booking.com, then on your site, how does it match up?  There are some great products out there.  One of my personal favourites and internationally recognised as being one of the best is GuestCentric (www.guestcentric.com).  Its multi-award winning booking engine is focused on providing a unique user experience with data capture at its heart.

So why are hotels sleepwalking into increased OTA dependency?

The answer is simple – laziness.  With the changes within our industry I have mentioned, it is most likely that there will be an increase in competition within the OTA distribution space.  Tripadvisor becoming an OTA is a big game changer, especially as they are in the top 3 of most visited travel sites.  Google, being still the number one search tool and its total dominance on smartphones could become a valuable player.  These changes if left unsupervised, will allow them to eat into even more of your inventory, especially if you are openly promoting them from your own website.  Hotels can though be smart at collecting guest data via inexpensive methods such as Social Wifi.  Booking engines and websites can be improved to provide a better user experience and to interact with your guests using Whatsapp or Facebook Messenger can provide that special attention to detail.  All the above can be done cost effectively and implemented seamlessly, so you can focus on providing your guests a unique experience while starting the process of slowly decreasing your OTA dependency.

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Currently, in Europe, almost three quarters (74%) of independent hotel reservations comes from an OTA (Source: Phocuswright).  Now just imagine if we got that figure down just 10% by being smarter with how you connect to your guests and users on your website.  Marketing online is not just about PPC campaigns; it requires a more holistic approach which takes advantage of the very latest technology to improve your hotel in 3 ways 1)Data Collection 2)Online user experience and 3)Guest communication.

OTA´ s are a fundamental part of your online distribution, but they should not be your only focus.  Make 2016 the year your hotel started reversing the trend of increasing dependency on OTA´s and start building a solid platform to increase your direct online reservations.

Need help in planning the right online marketing strategy for 2016?  Talk to us, email info@hotelient.net

 

 

5 thoughts on “Independent European Hotels are sleepwalking into an era of increased OTA dependency

  1. Hi John, Sarah here / cofounder at Fiz. This is an affirming read for a travel technology company like us, focused as we are on the traveller/guest digital experience when looking, booking and indeed enjoying a stay. Plentiful research is around to show that customers aren’t satisfied with the location content they see online, and lack confidence for a large part of the online journey towards a decision because of this gap between what they want and need to know, and what they are given. We fix this with a simple embed of curated local attraction and leisure/activity content into the digital channels of hotels ( web, mobile, app, wifi) but it’s quite a challenge getting our message and product into the right hands! I am not sure if it is laziness, apathy, the difficulty of making a change or a seeming technical barrier (one more tool to deal with). Insights appreciated and would love to show you around what we do! Here’s a quick link to something live: http://www.stjamescourthotel.co.uk/About/Virtual-Concierge

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  2. Great read!! Will share it too …

    I have always wondered why hotels add the logos of Tripadvisor or others on their website, something which will be hard to change because for a hotel it is the reward they praise themselves with and show the good work they have done.

    I am surprised to read that 26% of online sales is generated direct on the hotels website (for Europe) – my consulting business’ goal is to gain at least a min of 10% share back from the OTAs. Currently a lot of hotels in SE-Asia sit on way less than 26% …

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