The Big Issue in the Hotels vs OTAs War? Search

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Another day, another shot fired in the war between hotels and OTAs – this time, it’s Austria clamping down on OTA rate parity clauses. Everywhere, hotels are being urged to decrease their dependence on those nasty OTAs and increase their direct bookings.

Obviously if you’re a hotel, increasing the amount of direct bookings makes sense – who wants to give away 20-30% of their revenue to a middleman, when they could keep 100% for themselves? Hotels are constantly urged to improve their websites, to be more active on social media, to implement new web booking engines, to implement loyalty programmes, to improve guest personalisation etc etc.

But in the numerous articles published every day on the subject, one topic is consistently absent – search. Love ’em or hate ’em, one thing OTAs do better than anyone else is help you find the right hotel. When I’m travelling to a new destination, I want to see a list of hotels that are within my budget, that have the facilities I require (free WiFi, and maybe a gym/pool), and that are in the right location – either close to where I need to be, or accessible by public transport. I don’t really care which hotel brand I stay with – it just needs to tick all the right boxes.

Telling hotels to improve their SEO so they come up top of the SERPs doesn’t really help – individual hotels will never have the budget to compete with the OTAs (Priceline spends over $200m A YEAR on Google Adwords, and doubtless a similarly huge amount on SEO), and anyway, when I’m searching “hotel in singapore” I don’t WANT to visit individual hotel websites – I simply don’t have time. I just want to see a filterable list of everything that’s available. I might – just might – compare the rate on the OTA to the rate on the hotel’s site, but probably not; it seems like too much hassle just to save a couple of dollars.

Metasearch sites should, in theory, be a solution, and a good channel manager solution will allow hotels to push their direct rates out to sites such as Kayak and Skyscanner. But a 15-minute Kayak session this morning suggests that very few hotels are even bothering to do this.

Where hotels can win the war, or at least one of its battles, is on repeat business, by making sure that first-time bookers who book via an OTA book direct on their next visit, and this, I believe, is where hotels should be focusing their direct booking efforts. Offer us a guaranteed lower rate next time we book direct, sign us up to a loyalty programme, give us some added benefits next time we stay. At the moment, very few hotels do this – in fact in the last 2 years not one hotel I’ve stayed in has sent me a post-stay email or done anything to encourage me to return.

So unless hotels are going to band together to form their own low-commission high-marketing-spend SEO-genius OTAs, when it comes to brand-agnostic browsers and first-time bookers who just want the right property for them, they simply can’t compete with the OTAs and should focus their forces elsewhere.

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About Author

Tim is one of representasia’s co-founders and the company’s CMO. He has been in the tourism industry since 1992 and has worked in Paris, London, Saigon & Bangkok. He has a strong background in operations, technology, sales & marketing. Representasia is his second business venture, following his founding of a successful Vietnam DMC in 2009.

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