Travellers enjoy using Online Travel Agents (OTAs) as a one-stop-shop where prices are usually ultra-competitive, and user experience is second to none on most devices (desktop, laptop, smartphone, and tablet).
They have huge market reach and offer tourism businesses a great opportunity to attract new markets.
They do, however, present challenges for tourism businesses:
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Commission levels
Whenever you make a reservation on Booking.com, the hotel pays out a commission of 15-18%, sometimes more. With Expedia, it’s higher, at 15%- 30% or more, depending on if you opt-in for preferred display and advertisement. These commission levels are an important consideration for a business.
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Restrictive conditions
Everybody who signs with OTAs is required to sign complex and detailed contracts that demand rate parity, rate integrity, and room availability, among key conditions. In other words, a hotel can’t show a lower rate on its own website, nor can it make some rooms available on one site while unavailable on another.
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Online reputation
If a traveller writes a comment, positive or negative, on TripAdvisor, hoteliers can respond publicly. It gives context to the situation. But if you have a bad experience and write up a comment on Booking.com, hoteliers can respond to you privately, but it won’t show on the site.
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Loss of direct relationship with clients
The customer is developing a relationship and loyalty with the OTA, rather than the provider.
So you need to:
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Have clear goals
Talk to the OTA about what you want to achieve, and be in control of what you offer and when, so it meets your business needs.
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Keep on top of your commission rates
Try and negotiate a rate you are happy with. Bear in mind that it might seem expensive, but could be good value for money if it delivers marketing and business that you could not afford to do on your own.
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Consider black-out dates
If you are confident that your business will be fully booked on certain dates without the need for marketing, you can stop OTAs from selling your product on those dates.
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Act like an OTA
If you want to sell more rooms through your own website, you will have to behave more like an OTA. That means making bookings easy, or changing the way you market your rooms, by offering special promotions or creating a sense of urgency to booking. Sometimes, people go to an OTA website just because they have better information and photos than the providers.
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Work in partnership
If you work with other businesses as a group, you may be in a stronger position to negotiate with OTAs.
For further hints and tips on working with OTAs go to VisitEngland's Online Marketing Toolkit
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