Hoteliers are calling out the OTAs ‘Best Price’ Bluff

Top 2 value propositions OTAs have been selling to shoppers are :

1. OTAs offer most variety and options….maybe
2. OTAs offer Best Price….. now that’s a Bluff!

Shoppers, at least for the most part, are NOT aware of Rate parity provisions imposed by OTAs on hoteliers, putting hotels prices across channels, from the hotel’s own website to the OTAs websites in parity, offering hotel accommodation at the Same exact Rate = Price.

Some say Rate parity helps hotels avoid confusion over price points across different distribution channels. That might have been a positive point IF the cost of securing bookings across these channels was similar.

Problem is, with OTAs commissions ranging from 15-22%, their impact on revenue margins makes the OTAs distribution channels very expensive.

Rate parity is indeed an obstacle for a hotel that wants to differentiate between distribution channels, for example favoring a particular channel likeDirect Bookings on it’s own website, training shoppers to go there for the best price.

It is not a surprise that one of the hottest topics for Hotel Revenue managers now is, Increasing Direct Bookings on their hotel websites, and relying less on OTA bookings to improve revenue margins.

2 Important facts we know about online Shoppers for hotel accommodations:

A. Price is King: With 85% of travelers surveyed saying that PRICE is the most important factor when determining where to book. [according to a Google research]

B. They [Online Shoppers] are on YOUR website: 52% of shoppers will visit your hotel’s website after seeing you on an OTA [according to a Google research]

How do we make A+B above work for hoteliers: Call the OTAs Best Price Bluff!
We will show those 52% of shoppers that saw your hotel on the OTA a price comparison, proving rates are the same or higher on OTAs [remember Price Parity], removing their motivation to return to the OTAs to book with no savings. Why buy from a distributor or a re-seller when you can buy from the source, when you’re right there, on the hotel’s website, especially if the price is the same?

Solution:
BookingDirection’s technology works on your Hotel’s website to increase direct bookings by providing online shoppers the OTA web experience and price transparency they have grown to like — e.g. showing them “all” the prices in the marketplace, and proving that the hotel has the lowest price. In so doing, the need to comparison shop is eliminated.

Bottom line, EARN MORE by, increasing the percentage of website shoppers booking directly with you and reduce commission payout to OTA’s.

We’re in closed beta, helping hoteliers to get more direct bookings. Join the waiting list and we’ll contact you once additional hoteliers are added.

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Image by: Play Among Friends Paf

2 Top Reasons Shoppers Prefer Booking with OTAs over Hotels Websites

Following hundreds of conversations with hoteliers in the past months, one pain was almost a constant: shrinking revenue margins due to OTAs.

Add to that, the following facts, OTAs are controlling hotel bookings online with their, huge marketing budgets and options & variety to shoppers, and that so many hotels rely on OTAs for an important, sometimes significant, portion of bookings.

The result:

Hoteliers and OTAs end up with a dysfunctional relationship that can be best described as one matching the ‘hate and can’t live without’ type.

Unfortunately for hoteliers in this fast paced online economy, at least for the foreseen future, OTAs are here to stay and Hoteliers need to learn how to better compete, to have a winning chance in direct-bookings.

Some more interesting facts:

76% of online bookings happen on OTA websites [according to a wihp research], however, the good news is 52% of shoppers will visit your hotel’s website after seeing you on an OTA [according to a Google research], you know, to get a better look at your location and facilities. Another industry fact, you guessed right, 85% of travelers surveyed said that PRICE is the most important factor when determining where to book. [according to a Google research]

Questions is: Why shoppers prefer booking with OTAs over hotels websites?

1. Shoppers believe that OTAs automatically have lower prices when it comes to hotel rooms as opposed to actual hotel websites.

2. Being the sophisticated, optimized and specialized multibillion [and million] online businesses they are, OTAs have created a shopping experience that leverages a smooth, responsive and multilingual user experience that is second to none.

So after bringing up boring facts that are, at least to some extent, known to most hoteliers, I would like to share with you a solution we have been working on,

BookingDirection’s technology works on your Hotel’s website to increase direct bookings by providing online shoppers the OTA web experience and price transparency they have grown to like — e.g. showing them “all” the prices in the marketplace, and proving that the hotel has the lowest price. In so doing, the need to comparison shop is eliminated.

Bottom line, EARN MORE by, increasing the percentage of website shoppers booking directly with you and reduce commission payout to OTA’s.

We’re in closed beta, helping hoteliers to get more direct bookings. Join the waiting list and we’ll contact you once additional hoteliers are added.

Image by: Dennis Skley