OTA (online travel agency) has a real importance for hotelier and especially for the revenue management department.
As the article says, hotelier need to focus on the strategy that can provide the most important revenue at the different time of the year. This is all about the revenue's strategy. Questions are always: Do we need to focus on large groups? small groups? individuals? OTA?; all of these depending of low or high season.
So at the question of how to reduce hotel's dependency on OTAs? the answer could be by focusing on the website to avoid the commision and have good contract with the OTA and also to sell on opaque and focus on packages like Hotel+flight.
It is 2 different questions to wonder on which channels we should rely on (groups, individuals, tour, leisure, business) and on which segments we should rely on (OTA, direct booking, travel agents, opaque). This article only focus on the channel matter.
RépondreSupprimerI think it is very useful as it reminds us that OTA should not be blamed for all the wrongs of the hotel markets and cannot be ignored in hotels' selling strategy. Indeed, even if it is true that the commissions required by most OTA are very high, they still drive a lot of revenue to the hotels. Without their help, hoteliers would often be in difficulty to fill their hotels. What the article says is that for too long, since the economic depression, hotels relied too much on OTA and were ready to give anything to them to sell rooms. What they need to do now is to get the control back on their product and use the OTA more wisely.
How? The first advice is to rely on forecasts to measure how bad they will need OTAs. Indeed, the lower the forecasted occupancy, the more they will be likely to sell rooms through OTAs or even opaque sites. On the contrary, a good forecast would induce them to rely more on direct booking and reduce the inventory available for OTAs. One thing that is crucial to do is then to make regular meeting with the revenue manager and the sales teams to implement the right strategy based on the booking evolution. That's why it is said that it would be nonsense to set objectives regarding the number of rooms you would sell through each channel. Only the market behavior and trends can give you the answer.
Another tip is to practice rate parity in order to keep the control of your products and not give the chance to OTAs to compete with each other and put pressure on your pricing. In the long term, you will see on which OTAs you can still rely on and with which OTAs you should stop your relationship. It will allow you to control your commission rates better.
Next and last advice is to be able to set all your pricing directly from one platform in order to have a better visibility of what you are doing and apply the necessary changes. In addition,it will allow you to control your inventory closing some channels or reducing the inventory in some of them.
To conclude, what we can remember is that OTAs have to be used wisely. We have to remember that we have the power to control our inventory and who we are working with. OTAs should be our allies in period of low booking and should not be allowed to pressure us. The other thing we can remember is that the advantage of OTAs is that they can sell packages. Why is it a benefit for us? By bundling our rooms with a flight ticket for instance, the customer doe snot know which price was set up for the room and so, they will not rely on the same low prices in the future. This is very important to keep a respectful image and to keep our prices constant. Decreasing prices is indeed very easy during low periods but once comes the time of the high season, it is very hard to set up the initial prices...