June 4, 2019

Hotels: Can you strike a balance between OTA partnerships and direct bookings?

Navigating the complex hotel ecosystem is anything but straightforward. When it comes to distribution channels in particular, accommodation providers are increasingly trying to find a healthy balance between selling through online travel agents (OTAs) and via direct channels (e.g. a hotel’s own website).

The crux of the dilemma lies in the fact that OTAs do provide value to both hoteliers and travellers. On the one hand, hotels can leverage the reach of major OTAs to get their offering out to more customers (especially when starting out). On the other hand, travellers are able to compare more inventory, rates, and find their ideal accommodation in one place.

However, too much reliance on OTAs can also cost hotels dearly, both in terms of revenue and guest experience. Read on to find out how supporting direct booking channels can complement OTA partnerships to create a winning formula for both hotels and travellers.

Connecting to your guests in a mobile-first age

When it comes to engaging with guests, hotels have not been immune to the rise of the mobile-first traveller. In North America and Europe, mobile devices account for 28% and 33% of all hotel bookings respectively. That number reaches up to 53% in many Asian markets where mobiles are the primary device for internet access[1] – giving the industry a flavour of things to come.

This means partners need to leverage secure, responsive, and truly mobile-optimised channels that integrate with customers’ payment methods to let them book exactly what they want, when they want, where they want, without any friction.

Your guests deserve a better experience

In our hyper-connected age of the Phono Sapiens, it’s important to recognise that the guest experience encompasses the entire planning and booking journey – not just the short amount of time customers spend inside the hotel.

Opting for distribution via an OTA means giving away lots of valuable information about the customer, making it much harder to upsell ancillaries that add value to their stay (and therefore compromising on the long-term value of that traveller). What’s more, as OTAs aren’t actually providing the service or necessarily aware of a brand’s vision, they are unable to communicate the hotel’s values and convey the experience to guests in the same way brands themselves can do through direct channels.

Ultimately, direct bookings allow hotels to get to know their guests before they arrive, and gives them the tools to provide a more personalised experience (from in-app push notifications, retargeting emails, and tailored offers to loyalty programmes).

Partner up for success

OTAs and metasearch sites (such a Booking.com, Trivago, etc.) still command a huge proportion of online bookings[2]. Additionally, some of these major players have considerable budgets to allocate to marketing globally, which hotels would struggle to compete with.

‘Facilitated’ or ‘assisted’ bookings stand at the intersection of two worlds. Skyscanner’s Direct Booking distribution capability, for instance, brings together the reach of a metasearch and the benefits of direct booking to effortlessly convert browsing to booking, whilst giving partners the power to upsell ancillaries and own the customer. It allows travellers to research, choose and immediately book without leaving the website through ‘branded storefronts’.

Direct Booking with Skyscanner is a quick and efficient way to promote inventory directly on the platform. It levels the digital distribution playing field by offering hotels a truly global solution to localisation by opening a mobile-by-design, direct booking channel in smaller markets. As Skyscanner handles the integration (providing the partner meets the technological prerequisites and an adequate API is in place), getting up and running does not require any extra resources.

In conclusion: yes, working with OTAs is, and is likely to remain, vital for hotels. However, those partnerships can be a drain on hotels’ margins, and create dependencies on third-party customers and data. The good news is, effectively juggling OTAs and direct bookings can be the recipe for success – cutting third-party distribution costs, and creating direct relationships with loyal customers in the process.

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[1] https://www.traveltripper.com/blog/important-mobile-booking-stats-for-hotels-in-2018

[2] https://www.hotelspeak.com/2019/05/9-strategies-to-increase-hotel-direct-bookings/