Online Travel Agencies (OTAs) have become a dominant force in the hospitality industry, often offering rates that undercut those available directly on hotel websites.
This can make it challenging for hotels to attract direct bookings, which are generally more profitable due to lower commission fees and the ability to build customer relationships.
One of the primary reasons for this disparity is the prevalence of special campaigns offered by OTAs. These campaigns, such as member rates, weekend deals, and mid-month discounts, often involve rates that are lower than the hotel's best available rate (BAR). As a result, OTAs can consistently offer competitive prices to consumers.
To combat this issue, hotels can consider the following strategies:
1. Eliminate Special Campaigns with OTAs
By discontinuing exclusive deals with OTAs, hotels can ensure that their best rates are always available directly on their websites. This can incentivize guests to book directly and potentially reduce the reliance on OTAs. While this strategy may initially lead to a decrease in OTA bookings, it can help to establish the hotel's website as the preferred booking channel.
2. Disconnect Your Booking Engine
A more drastic measure, but potentially effective, is to disconnect your booking engine from the channel manager. This provides greater control over your pricing and distribution, allowing you to prevent OTAs from undercutting your rates. By ensuring that guests are always booking at the best possible price, hotels can encourage direct bookings and improve profitability.
By implementing these strategies, hotels can level the playing field with OTAs and increase the number of direct bookings. This can lead to improved profitability, stronger customer relationships, and greater control over the guest experience.
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