“Direct is best”; “101 ways to avoid paying OTAs”; even “How to Win The OTA War”. We’ve all seen countless taglines and blog posts of this nature. In fact, we’ve written a significant number of them ourselves!
Alas, times have changed.
Hotel booking engines are vitally important. But they’re now secondary.
There, I’ve said it. This should come of little surprise (no matter how hard it might be to read), when you consider the habits of the millennial generation. According to data from Expedia, millennials tend to be less brand loyal than their parents, and appear to be drawn to the simplicity and choice offered by OTAs.
Put simply, they’re far more likely to book a hotel room via an OTA, and that’s important, because they’re the biggest generation in existence.
Yet still large chunks of the hospitality sector stick out their bottom lip, stamp their feet and sulk their way through the OTA relationship, while thinking nothing of buying their airline tickets, hire cars or insurance through the online consolidators.
The story of 2017
It’s not all about the millennial generation. Our own statistics also reflect the habits, needs and wants of the modern day traveller.
During 2017, Welcome Anywhere processed £74m of hotel reservations. Over fifty percent of those bookings came from Booking.com with the number of direct bookings decreasing by almost £2m in value.
These figures may be alarming to some, but to us, they offer a key insight into how the modern hospitality industry - and the guests that fuel it - operates.
Hotels that cling to the old rhetoric are effectively saying “we don't want to provide what our prospective guests want”. I find that astonishing; it’s no more out of step with the times than saying “sorry, we don’t take contactless payments”.
And then there’s the whole ‘cost of acquisition’ thing, which is easier to summarise than some might lead many to believe; the OTAs are the de facto cost of acquisition these days. Period.
While the cost of using OTAs is often quoted, the cost of not using them gets little airtime. It’s absolutely possible for a hotel to market its rooms without OTAs, by taking a few small steps. These include:
- investing in effective digital platforms for e-shots, graphic design and social media output;
- the purchase of royalty-free images;
- producing professionally designed leaflets and mailing them out;
- effective use of a decent CRM system to monitor results;
- a full SEO campaign and expenditure on Google Adwords;
- use of a local ad agency; and
- someone to do all this stuff.
Actually, that’s quite a large list, isn’t it?
OTAs just take a booking and top slice it, right? Well actually, no. Most OTAs also provide extra tools - sometimes chargeable, sometimes not - to help hoteliers. These can include rate intelligence and management modules, yield management and comprehensive reporting. And let’s not forget that the guest gets a booking experience tailored to them thanks to clever use of language support, currency conversion and POIs.
How can hotels seek to obtain loyal customers by seemingly doing everything right with their property (the decor, facilities, F&B operation, friendly team, etc), yet fundamentally be at war with those same customers?
Are hotels at war with their guests?
By turning their noses up at OTAs, some hoteliers are effectively at war with modern guests and their booking preferences. How will that endear guests to those hotels and convert someone from a one-time guest into a regular booker and passionate advocate the hotel’s brand?
Over the years, guests’ expectations have changed and the hotel industry has responded admirably. Tea and coffee making facilities in the rooms? Pah, old hat. Modern comfort cooling? Tick. Mood lighting? In-room phone charging, USB sockets and mirror TVs? Been there, done that. Free wi-fi? Yep. Locally sourced artisan breads and Fairtrade cotton duvet covers? All of these came at a cost to hotels but as hoteliers we provided these services over the years because the guests wanted them.
So, why the outcry over another service which guests want (the ability to book by OTA)?
Some hotel software providers are looking increasingly stale, thanks to their anti-OTA rhetoric, and are either blatantly or inadvertently ignoring the facts.
Us? Well, we’re not cosying up with OTAs or desperately seeking their affections via candlelit dinners - we simply want to provide a platform for hoteliers that enables them to deliver the best guest experience possible.
That experience starts from the moment they book, which is why we have long since walked away from the old rhetoric and started to think positively about the role OTAs play in the modern customer’s booking journey.
Isn’t it time that hotels and PMS vendors buried the hatchet with the OTAs? Sure, providing guests with what they expect costs, but the cost of denial could be far higher.