In the ever-changing world of hotels, OTAs (Online Travel Agencies) have become key players. These virtual platforms, such as Booking.com, Expedia and Airbnb, are reinventing the way travelers discover, compare and book their holidays. By making a myriad of accommodation options available at the click of a button, OTAs are making it much easier for travelers to plan their trip and giving hoteliers global visibility.
However, there is a downside to every coin. While the emergence of OTAs in the sector has undeniably expanded the market and helped hotels reach a wider customer base, it also raises questions about their value to accommodation providers.
Between commissions, competition for visibility and control of customer data, the relationship between OTAs and hoteliers is varied – both symbiotic and contested.
So are OTAs friends who are propelling the hotel business to new heights, or enemies who are threatening the autonomy and profitability of hoteliers? Let’s take a look at the complexity of the interactions between hotels and OTAs, and the winning strategies for accommodation providers in a context where digital innovation has become a driving force for the hotel industry.
Online visibility for hotels
With the advent of digital technology, the way travellers search for and book accommodation has changed dramatically. Today, the internet has become a vast battleground where hotels and Online Travel Agencies (OTAs) such as Booking.com, Expedia and Airbnb compete for the attention of potential customers. In this first part, we explore the crucial importance of online visibility for hotels and the heightened competitiveness of the digital marketplace.
The quest for digital hegemony
In a world overloaded with information and options, being visible online is not just beneficial, it’s vital. Consumers, as we know, push searches and can open up to twenty tabs just to find a hotel. For hotel establishments, being at the top of the list of search results has become imperative: if they are not detected, they are invisible to customers. And once they’re visible, it’s crucial to convert that interest into actual bookings!
Digital marketing for hotels
OTAs, armed with substantial marketing budgets, are often in pole position in the race for the most sought-after keywords. As a result, they ensure that their ads appear on the first page when a potential customer is looking for accommodation in a given town, sometimes even by buying the name of a particular hotel. This represents a major challenge for independent hoteliers, who have to compete with the vast resources of the OTAs for a place in the digital sun.
OTAs focus on the comprehensiveness and accessibility of their content. They offer a full range of information on hotels, including detailed descriptions, a multitude of photos and customer reviews, all enhanced by a fluid and intuitive user experience. In contrast, hotel websites sometimes fail to match this wealth of information and ease of use, which can put them at a disadvantage in attracting (and retaining) consumer attention.
OTA marketing strategies
To increase conversions, OTAs have developed clever marketing strategies that create a sense of urgency among visitors. Alerts proclaiming “Last room available at this price” or “15 people are currently looking at this hotel” encourage users to book immediately, playing on the fear of missing an opportunity.
OTAs: Partners or Competitors of Hoteliers?
OTAs are often seen as a double-edged sword for hoteliers: an indispensable source of business, certainly, but also formidable competitors for direct customer acquisition. Although the dynamic of partnership is advocated, hotels need to consider the balance of this relationship. Is it possible for hotels to coexist harmoniously with OTAs, taking advantage of their visibility while maintaining a strong brand strategy and a direct relationship with customers? This article will look at this complex relationship to untangle the links between collegiality and competition in the world of online hotel referencing.
Are OTAs friends of hoteliers?
By forging an alliance with Online Travel Agencies (OTAs), hoteliers open the door to a global audience that might otherwise never discover their establishment. This collaboration gives hotels access to visibility without borders, ensuring a presence in search results well beyond their geographical proximity. OTAs deploy sophisticated marketing targeting strategies and benefit from a colossal customer database, much larger than that of an individual hotel, making their promotional actions all the more effective.
With OTAs, booking becomes a simplified process, accessible 24 hours a day. This ease of booking benefits both customers and hoteliers, enabling the latter to maintain and manage their availability with ease. Thanks to this operational simplicity, offers can be updated and rates checked in just a few clicks, often in synchronisation with other hotel management systems.
Hotels also benefit from the many promotional strategies implemented by OTAs. From bundled offers to special promotions, these tactics are proving invaluable, particularly during low-traffic periods, helping to fill empty rooms. OTAs also make it possible to systematically collect customer reviews, which are essential for building and maintaining a favourable e-reputation, a key factor in standing out from the competition and attracting new travellers.
Practical and technological aspects
OTAs provide accommodation providers with a range of advanced analytical tools, providing crucial data on customer behaviour and preferences. These insights enable hoteliers to adjust their offer and personalise their services. Advanced OTA technology also makes the booking process much smoother, improving the user experience and facilitating the booking journey from initial search to check-out.
Conclusion to Part 1: Are OTAs our friends?
Answer: Yes, but not only…
To sum up, OTAs are at the forefront of this industry, acting as real business levers for the accommodation providers that adopt them. Setting up these platforms is child’s play, enabling a significant increase in turnover in a short space of time. Content translation into multiple languages and global distribution are valuable services that OTAs offer, significantly boosting hotel visibility. Performance-based remuneration methods – similar to those practiced in the days of traditional travel agencies – are further evidence of the financial advantage of OTAs. Finally, there is evidence that the increased visibility generated by these platforms also generates a Billboard effect, driving an increase in direct bookings, which is unquantifiable but absolutely real.
Although we have explored the many beneficial facets of OTAs, the story does not end there. There are two sides to the coin, and it is crucial to look closely at the complexity of this relationship. There’s no denying that online travel agencies offer a multitude of benefits, from increased visibility and simplified booking processes to advanced analytical tools that help refine a hotel’s marketing strategy. However, there could well be a flip side to this shiny medal.
In our next article, we take a critical look at the challenges and difficulties posed by OTAs. Are they the enemy of hoteliers? That’s what we’ll look at, discussing possible conflicts of interest, high commissions and the pressure to keep rates competitive that can affect hotels’ profitability and autonomy. We will see how the apparently beneficial alliance with OTAs can sometimes turn into a fierce competition for customer loyalty, and what needs to be done to optimize without depending on this partnership.