Dos & Don’ts Of Working With OTAs

Editor’s Note: As we are building our SkiftEDU service for marketers and SMBs in travel, we recently launched a new initiative: our new weekly series on digital marketing tips and tricks, SkiftEDU How-Tos. These How-Tos are a series of free in-depth weekly articles around various topics in digital marketing, such as this one below

The working relationship between hotels and online travel agencies – better known as OTAs – is always a matter of heated debate in the travel industry. But the likes of Expedia, Booking.com, Orbitz, Ctrip as well as meta-search players such as Trivago, Kayak or even TripAdvisor and Google are a reality and force to be reckoned with. So what are hoteliers to do?

Skift covers this topic on a regular basis, as things evolve fast in this realm. But assuming you have a working relationship with a third-party agency that distributes your inventory, here are some key principles you ought to follow in order to get the best possible results for your efforts.

DOs

Here are six things to do when working with OTA sites:

1. Complete your profile

I know this sounds so basic, yet I often see profiles on various sites that lack a complete description (bio), hours of business, available rates or promotional rates, and so on. So when searching for business on Google, or TripAdvisor, or Booking.com, users should see information as coherent as what can be found on your website.

A question often heard: should you save your best pictures for your own website? Of course not. You should have many quality pictures to begin with, so why spare the excellent ones just for your website? It’s your brand, so you may as well put your best out there, whether it’s on proprietary media or third party sites.

When using OTA sites, make sure to insert toll-free phone numbers, website URL and ongoing promotions in order to get increased visibility, compared to other properties which don’t bother with this effort.

2. Manage inventory

There have been ongoing issues with rate parity and the obligation to have availability on OTA sites as well as your own travel brand site. These clauses have been under fire for the past two to three years and have been deemed illegal in different European countries since 2015, so this certainly remains a bone of contention in various countries, including in North America.

Nevertheless, you should take the necessary time to manage inventory and what is being made available according your peak periods or fluctuations in demand. Better yet, if you use channel managers, i.e. RezGain, TravelClick, Fastbooking, Bookassist, Hotelrunner, etc. these paid solutions can help you manage this from a single platform.

The point here is this: OTAs serve a purpose in selling inventory you can’t sell by yourself, or by amplifying your marketing efforts, reaching different audiences in markets where you may not have the resources to be in the first place.

3. Manage rates and promotions

Visit Houston, together with Expedia Media Solutions, has been implementing promos over weekends, to get more leisure travelers since they have loads of business travel during the week, investing on travel ads in competitive drive-by markets. This is a clear example of a destination managing rates and pushing aggressive promotions on an OTA in order to gain a competitive advantage.

Because of their popularity, OTAs have become a de facto go-to resource for travelers seeking not only inspiration but also last-minute deals and offers. For hoteliers seeking to sell last-minute inventory or simply push a promotional rate in order to get more clientele during a specific period, this can certainly be a valid option. Assuming you effectively manage rates and promotions on these channels.

4. Respond to questions and reviews

It is said that only 14% of consumers nowadays trust traditional advertising while 92% of us will trust reviews on sites such as Yelp, Google, Gogobot or TripAdvisor. We read reviews on Expedia, Booking.com, Hotels.com or other popular OTA sites and these are even more reliable than unverified reviews because guests can only write their reviews after a stay that was booked on that respective site. Yet, according to Revinate’s 2014 Hotel Benchmarking Study, only 36% of hoteliers respond to comments and questions on OTA sites!

You’re not sure where to begin when it comes to responding to questions and reviews? Start with reading these two recent articles published here on SkiftEDU:
How To Reply To Online Comments & Reviews
The 4 Pillars For Your Online Reputation

5. Consider advertising and paid placement

Some folks believe paid tactics are only for the big players, which is simply not true. Even smaller hotels and inns can consider paid tactics such as Travel Ads on Expedia, for example, which is a cost-per-click type of campaign. For destinations it works fairly well in co-op travel ads with hotels. For Shenandoah, Texas, which is a small destination outside Houston, Shenandoah CVB got some traction promoting their area and hotel partners with limited resources.

6. Pay attention to campaign performance analytics

Do you know how well you are performing in a specific market, say in Brazil or India for example? OTA sites can often provide hotel partners with market intelligence that will help travel brands optimize their spend and efforts in these markets. Both Booking and Expedia (with its Expedia Partner Central service) provide insightful analytics that can help measure campaign performances and steer efforts towards successful promotions, or lower spend on ads that end up being duds.

DONT’S

There are also things to be aware of when working with OTA sites. Here are six to pay attention to:

1. Rely only on OTAs for distribution

At the end of the day, online travel agencies work in their own best interest and that of their shareholders, which may not always be aligned with hotel chains or independent hoteliers’ interests. In other words, OTA are an important part of the online distribution mix, but they should not represent a catch-all solution. To say it another way: Don’t put all your eggs in one basket!

Make sure you have a transactional website that avoids common pitfalls, and more importantly make sure you have a distribution strategy diversified enough so that you won’t rely solely on two or three OTAs to bring in the bulk of your revenues.

2. Expect OTAs to work only for you

Another common mistake is to expect OTA to drive all the business, when in fact you ought to see them as partners that can and will drive bonus traffic, or traffic you may not have been able to attract yourself in specific markets or demographics. Yes, Priceline and Expedia have spent more than US$6 Billion on Google AdWords campaigns in 2015 alone… but if you divide that by the amount of hotel properties worldwide, then by 365 days, you realize it doesn’t add up to much per property on a daily basis…

Is the billboard effect still a thing? There are different views on this, but having your property listed on a popular OTA can certainly still bring traffic to your brand website. Nevertheless, hotels still have the responsibility to drive their own traffic and have a digital marketing strategy that goes beyond simply relying on an OTA for online sales.

3. Over-simplify what clients may be looking for

For many consumers and industry insiders alike, there is a misconception that users are searching for price first and foremost and thus there is a “lower-end pricing” mindset at play when using OTAs. The top search filters are not always the ones we think, though: “When searching for hotels, “hotel class” is the most popular filter type that consumers use, followed by “price per night,” “neighborhood” and “amenities”, according to Noah Tratt, Global Senior Vice President at Expedia Media Solutions.

Some clients may be using OTAs at the inspiration level, while others are closer to the transaction stage of their decision-making process. This process isn’t linear either, and tends to take place in micro-moments, as Google likes to call them. The client journey online is getting more complex, and decision-making goes well beyond simply the “price” consideration. OTAs play a key role in the equation, including at the inspiration level, so we must be careful about generalizing expectations.

4. Stop putting efforts in organic tactics

Is your hotel website mobile-optimized and transactional? Is the information ready to access, and are the user experience and design up to par? Do you have a newsletter strategy in place to regularly communicate with loyal clients or bring back visitors to your website? What role do social media play in your digital marketing approach and how effective is your visual storytelling on key mobile apps such as Instagram or Snapchat?

It’s not so much a matter of being everywhere your clients may be – this is difficult to achieve, let alone manage, when you are a small or medium organization in the hospitality realm – but rather prioritizing platforms on which to engage with target audiences.

5. Stop investing in online paid tactics

The 15-25% commission levels paid out to OTA is a form of advertising, or at least marketing expenses. For some hoteliers, this strategy alone is fine. But for a vast majority, it would be preferable to spend that money on AdWords campaigns, Facebook ads, newsletters initiatives, promotional pushes with or without OTAs.

In fact, when it comes to investing dollars with OTA sites, it’s important not to expect overnight success (just like with most digital initiatives). Test and learn is important, so we can adapt as things move along. Success doesn’t come overnight, so advertising investments should be made when taking this into consideration.

6. Forget to foster proprietary data and audience

Last but not least, I often remind hospitality practitioners that their first priority should always be to develop their own media and proprietary data, so that there can be an integrated marketing strategy in place. This means not only having a responsive website, but also a focus on gathering email addresses for future communication and engagement with users.

Unfortunately, if you rely too much on OTA distribution to bring in the business, it becomes more challenging to gather client emails and contact details. Thus, efforts need to be made to make sure hotels gain access to client data, not only on the brand website but also once at check-in or during other key touch points of the customer experience.

Read also: Hotel CEOs Think Their Direct Booking Pushes Position Them For The Long Term Gain