Hotel Online Travel Agent (OTA) Propaganda Myths Debunked
Remember back in 2005 when the Online Travel Agents (OTA) first started to get mainstream and contacted hotels en masse to join their platform?
Many hoteliers hated the idea of a 15% commission structure, but they sold it as incremental sales.
“Hey, you know, just give some availability when you’re quiet and we’ll help you sell some extra rooms…”
That was then.
Now, independent hotels have found that they’ve gone from 100% sales being direct in 2005 right down to 20%. The OTA’s have funnelled most of the booking through their system.
These guys are full of $*it. Sorry, I get a bit emotional when talking about their propaganda techniques — I think Goebbels would be really proud!
With price parity and brand jacking techniques, they’ve managed to make the world think the cheapest place to book is through them.
Propaganda Myth No. 1 — Booking.com is the cheapest way to sell rooms online
This is both true and false at the same time: True if you go against the OTA’s on Google Adverts, and false because how can 15% be the cheapest way to sell your rooms online?
The main reason you can’t bid against the OTA’s is because you are selling rooms for 1 hotel while they sell rooms for all hotels including yours, so are unlikely to have no availability.
The other reason is that they have millions in their budgets.
Google Adwords clicks are coming in at crazy prices of up to £10 a click. So let the OTA’s battle it out and drive up the prices there while you learn to get creative at marketing your business.
Propaganda Myth No. 2 — Direct booking initiatives will hurt your hotel
They try to argue that giving cheaper prices, better deals or conditions for direct bookers will lose you money overall.
They claim this by saying that you’ll sell less rooms on their platform and you may lose some OTA rankings, which will lead to less future sales.
Firstly, they way overstate their importance and the changes in rankings that will come from giving a customers a better deal by booking direct. Going from a 90/10 split to 80/20 will hardly make a change to how you’ll be ranked on the OTA’s.
If their argument is true, they’re saying you should just quit your booking engine and other sales channels to “make more money” by gaining rankings on their system.
Propaganda Myth No. 3— You can’t sell cheaper than the OTA
Their contract and aggressive representatives have scared hoteliers for years to give the same deal as the OTA’s. This is one of the main reason small hotels in Europe find themselves with 80% of online booking coming from OTA’s with a 15%+ commission bill.
The truth is, you can actually sell cheaper as long as it’s not in public!
What this means is that you can have a membership system (like ours), or give discount codes to use on your booking engine. You can also quote cheaper prices on the phone too. All within the contract.
Propaganda Myth No. 4 — OTA’s market for your business
Okay, this one really gets me annoyed! They literally do ZERO marketing for your hotel. Yes, ZERO.
They may mention your hotel in some adverts, but that’s from brandjacking where someone has typed in “Grand Hotel” specifically, then they advertise “Book Grand Hotel on OTA.com for up to 70% off!”.
Brandjacking hurts you. They try to filter away direct clicks into their system by saying they have the cheapest prices.
OTA’s are like supermarkets for hotels: They do help the customers find hotels by price and availability, but they really, 100% don’t do marketing for you.
What they do is spend huge amounts of money marketing themselves.
Propaganda Myth No. 5 — They’re your friend
At best, the OTA’s and Hotels are frenemies. They provide a valuable service of letting customers search and compare hotels in an area…
But!
They’re just as willing to suggest your competitor’s cheaper room when the guest is looking at prices on your page.
Their main focus is to get that booking, and they don’t mind who it’s with specifically (that’s another reason they why don’t do marketing for you, only for themselves).
I’m still hopeful that, with increased scrutiny in Europe over dodgy OTA practices, we’ll get some change to ban price parity and brandjacking.
Maybe we’ll see some innovation and new booking start ups emerge with innovative pricing models.
We can all hope!
Regards,
Evan Davies
CEO and Founder of The Booking Factory, an all-in-one solution for hotels to market and manage their business, and a firm believer of direct bookings and dealing directly with the customer without the middleman.
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