THE OTAS ARE THE WORST (EXCEPT WHEN THEY AREN’T)​

By KELLY Springett

Online Travel Aggregators, better known as OTAs, have been around for almost 20 years, so should we still be treating them as a novelty.

Expedia was launched back in 1996, while Priceline was founded in 1997. In the earlier days, OTAs were seen as a convenient distribution channel where operators could sell distressed inventory online. This was particularly true in the early days, when online distribution was not really a priority.

You guys all criticise me for how much I charge you for guests to come to your hotel. I think you’re looking at it wrong. Look at us as the cheapest source of referrals that you could imagine. If they come through me, you pay me once, and if they come back to me again and again, shame on you. You should make them a loyal customer.

Dara Khosrowshahi - FORMER EXPEDIA CEO

Fast forward to current days, technology has shifted how travellers make a bookings and this is where OTAs shine. They became big through leveraging new technology, where it was considered too costly and complicated for small and medium operators. Basically, there was no one else was offering the service that consumers were demanding. Still true today, where little thought is put toward digital strategy.

So, why has the relationship between operators and OTAs gone sour? In a competitive list driven landscape, operators must fight on a variety of levels, from customer experience to convenient location and, of course, best price with little control over brand or displaying their unique experiences. Oh, lets not forget – commissions are ever increasing, and the cancellation rates are ridiculous.

Plus, anyone not familiar with the online travel landscape may be under the impression there are hundreds of OTAs to choose from, right? Wrong. Over the last few years, it have become clear we are basically in a duopoly position, where two groups are battling it out for dominance in this realm: Expedia vs Priceline.

Dominating Australia, New Zealand, Europe and Asia, Priceline is the OTA that holds the biggest market capitalisation. Besides its well-known Priceline brand, and its equally famous tagline “Name Your Own Price”, it also owns Booking.com, Agoda and Kayak among others.

At the other end of the ring is Expedia. With its recent acquisition of competitors Travelocity, Wotif and Orbitz, Expedia is now back on top, at least in terms of worldwide revenues.

Some of the OTA as part of Expedia

We already know that 76% of online bookings happen through OTAs. However, the conversion rate on first time visits is very low and users will come back a second and third time before booking. This is where opportunity arises.

On Average, 52% of users will look for the official hotel or tour website after discovering them through an OTA. So, you’ll want to ensure you are easily found with an enticing call to action. Here are a few ways you can increase your direct bookings, whilst leveraging OTAs for their billboard effect;

Be Responsive – Over 85% of online bookings will happen on a mobile or tablet device. If you website isn’t responsive to screen size you are already missing out. It also, helps your search rankings in Google and other search engines.

KISS – Keep it simple silly! Simplicity is the key to success for the OTAs, duplicate it on your site. Too often we see sites that are filled with paragraphs and paragraphs but no call to action. The best way to understand what works is to track it with analytics.

Experience first – Hotels aren’t just places to sleep, tours aren’t just people to follow. They are experiences that evoke emotion and memories. Portray this online and invest in imagery and content that matches. An empty cold room, yields 4x less bookings than a photo of the room being used by real people. It doesn’t have to be expensive either, just get together a few friends and borrow a photographer from your local real estate agent (they’re cheap and are very good at taking photos of interiors). 

Starwood Hotels Book Direct

Reward Loyalty – Look at Starwood Hotels, they will match any rates that are lower than on their website, as well as offer benefits that are not offered if guests book through an OTA. Actually, many of the large chains are doing the same, you don’t have to go to the extent of Hilton, just enough to offer your visitors a reason to book direct

Retention strategy – First time visits to a website will have an average conversion rate of 2%. Leaving 98% of traffic leaving with no way of getting them back. Not to worry, simply offer a promotional code or offer if they leave their email address, or perhaps install retargeting ads to your website. They are cheap, easy to run and yield much higher conversions that organic traffic from search engines. 

Do this well, and now the OTAs are exclusively bringing you new customers, and your OTA fees will start falling, but that’s just the low hanging fruit.

But, if you are really serious about reducing your ratio of OTA to direct bookings, look no further than Discovr. We make it easy and affordable to do what the big guys are doing.  

How does it work? We now know, these OTAs only get a minor conversion on first-time visits and users will come back a second and third time before booking. Each time they visit an OTA, a cookie is left in their browser with all the data needed to measure intent and action by date, location, etc.

Discovr is then fed this data for use in targeting users that have shown interest or intent in booking with you, a competitor, or are researching your area and hotspots. Once the users intent is identified, advertising is shown and delivering them to personalised landing pages that promote conversion and engagement. Pretty clever huh? We like to think so!

Plus, we have prospecting campaigns that reach across social and mobile apps to find specific types of people who have intent, for example, maybe they were researching or mentioned that they were interested in an event that is local to you – again once identified ads are shown.

The last type of campaign we offer is retargeting, not only for your website but social media and landing pages. These campaigns are often added as a fallback for other campaigns – because as you know conversions rarely happen on first time visits so a strategy to pull them back is crucial.

But but but… The greatest part is that everything is data-driven, meaning, campaigns get stronger as time goes on. With our extensive setup and some tweaking to campaigns we have seen conversions up to 30% per user and our average across 2000+ clients is 18%.

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Let us help you balance the ratio of OTA vs direct bookings.