When it comes to hotel distribution, there’s an ongoing debate about the value of bookings from Online Travel Agencies (OTAs) versus direct bookings. While it’s true that direct bookings are nearly always more profitable due to lower distribution costs, the notion that OTA bookings represent a failure to a direct booking growth strategy is a misconception.
In reality, OTA bookings are often a critical part of an overall successful revenue strategy. The true failure lies not in receiving OTA bookings, but in failing to convert those OTA guests into direct booking customers in the future.
OTAs as a Hotel Marketing Channel
OTAs are powerful marketing platforms with massive reach. They invest heavily in advertising, SEO, and brand recognition, drawing in a global audience that might otherwise be unaware of your property. For independent hotels, competing with these giants on the same scale is impossible. Leveraging OTAs allows hotels to tap into this expansive marketplace, filling rooms that might otherwise go empty.
While it’s tempting to view OTA commissions as a drain on revenue, it’s more constructive to see them as a hotel marketing cost. Just as you would pay for a Google Ad or a social media campaign, the commission paid to OTAs is an investment in exposure. An opportunity to capture the attention of guests who don’t know of your hotel or would not have found it through your direct channels. This initial exposure is the first step in the customer journey, one that you can later capitalize on.
The Value of OTA Guests for a Hotel
It’s crucial to recognize that guests who book through OTAs are not inherently less valuable than those who book directly. In fact, they represent an untapped opportunity. These guests have chosen your hotel over many others, albeit through an OTA. The key is to turn their first stay into the beginning of a loyal relationship.
From the moment an OTA guest walks through your doors, the goal should be to impress them with an exceptional experience. This goes beyond just a comfortable room—it includes personalized service, thoughtful touches, and a seamless stay. By exceeding their expectations, you set the stage for a future relationship that can bypass the OTA entirely.
5 Ways to Turn OTA Guests into Direct Bookers
The real success lies in converting these OTA guests into direct booking customers for their next stay and beyond. Here are some strategies to turn OTA guests into direct bookers.
- Capture Their Data: Ensure you gather as much information as possible about OTA guests during their stay. This includes email addresses, phone numbers, preferences, and stay history. Use this data to personalize their experience and to reach out to them directly post-stay.
- Offer Incentives for Direct Bookings: During the guest’s stay, subtly promote the benefits of booking directly next time. This could be through offering exclusive perks, such as a discount on their next stay, complimentary services, or a loyalty program. Ensure that these benefits are clearly communicated during their stay and in follow-up communications. Promote these perks and incentives in-room through paper or digital collateral, such as the welcome message on the in-room Smart TV, at the front desk, and other areas of the hotel.
- Enhance the Guest Experience: The guest experience should be so memorable that the idea of staying anywhere else—or even booking through an OTA again—seems less appealing. Tailor your services to their preferences, go above and beyond with personalized touches, and ensure that every interaction reinforces the value of your hotel.
- Follow-Up Communication: After their stay, send a thank-you email that includes an offer for their next visit, bookable only through your website. This not only shows appreciation but also plants the seed for future direct bookings. To enhance a deeper connection, use personalized messaging that reflects their previous stay to show that you value their patronage.
- Build a Loyalty Program: Encourage repeat stays by creating a loyalty program that offers real value. This program should reward guests for booking directly, with benefits that are tangible and desirable. Make sure OTA guests are aware of this program during their stay. For independent hotels, having a loyalty program cannot be overstated. And it’s easier than ever before through curated loyalty programs specifically designed for independent properties, including options to white label with your own branding.
Reframing Success
In the quest to maximize hotel revenue and decrease distribution expenses through more direct bookings, it’s important to reframe how we view OTA bookings in that equation. They are not a failure; they are a starting point. The true measure of success is how effectively you can convert these initial OTA bookings into direct relationships. By focusing on guest experience, personalized service, and strategic follow-up, you can turn OTA guests into loyal, direct-booking customers, ensuring long-term profitability and strengthening loyalty.
In conclusion, OTAs are an essential part of a holistic hotel revenue strategy. The failure is not in using them, but in failing to capitalize on the opportunities they present. Embrace OTA bookings as a valuable tool in your revenue management arsenal, and focus on converting these guests into loyal repeat direct-bookers.