The internet has shrunk the world – cliché but true– and with this has come to a wave of globalization driven by an upsurge in leisure as well as business travel. The millennials plan trips spontaneously – even impulsively – and make bookings from the living room – or office – computer. Get on the internet and you will see a number of Online Travel Agents (OTA) offering to book everything from your plane tickets or rental car to hotel rooms.

One serious fall out of this – from the hotelier’s perspective in a non-differentiated market – is the commoditization of the property that gets reduced to just a listing on OTA platforms like #MakeMyTrip.com; #Cleartrip, #Ibibo; #Expedia; to name a few. The salience of a hotel property gets lost in the cacophonous hankerings of multiple travel sites, each aggregating hundreds of undifferentiated hotel properties in various destinations.

For single-property players, if this kind of intensified competition is not bad enough – think of the heavy commissions (often as high as 18%) charged by the OTAs; and the mindless discounting on unsold inventories!

This is not to say that OTA’s don’t bring business. Of course, they do by expanding your reach, but the realisation from each sale is not something to write home about in an out-an-out buyer’s market, where the customer is spoilt for choice.
But let’s first list the advantages with OTA listing.

The OTA Edge
OTAs provide travelers a single-window service for all their travel needs in exchange for a price – their commission. These agencies have grabbed a significant share of the market with one USP – offering to make multiple bookings at bargain prices, on behalf of the travelers – taking the load of planning off their shoulders. From booking a flight ticket, taxi service to a hotel room, everything gets taken care of from one touchpoint.

At the beginning of 2018, nearly  40% of digital bookings in the USA were through OTAs with commissions nudging 30%. The statistics are not very different in India, and hoteliers are gradually waking up to the fact that despite paying high commissions to OTAs, their realizations are low, due to heavy price-cutting practices; and they also end up diluting their brand identity and losing customer loyalty by not getting enough repeat bookings.

Adding to the hoteliers’ concern is that the internet-savvy, gadget-friendly millennial on-the-go holds more  than 30% of the market share. Of these,  more than 50% prefer to book through OTAs because of the convenience they offer at a low cost.

On the Flip Side

The internet has shrunk the world – cliché but true– and with this has come to a wave of globalization driven by an upsurge in leisure as well as business travel. The millennials plan trips spontaneously – even impulsively – and make bookings from the living room – or office – computer. Get on the internet and you will see a number of Online Travel Agents (OTA) offering to book everything from your plane tickets or rental car to hotel rooms.

One serious fall out of this – from the hotelier’s perspective in a non-differentiated market – is the commoditization of the property that gets reduced to just a listing on OTA platforms like #MakeMyTrip.com; #Cleartrip, #Ibibo; #Expedia; to name a few. The salience of a hotel property gets lost in the cacophonous hankerings of multiple travel sites, each aggregating hundreds of undifferentiated hotel properties in various destinations.

For single-property players, if this kind of intensified competition is not bad enough – think of the heavy commissions (often as high as 18%) charged by the OTAs; and the mindless discounting on unsold inventories!

This is not to say that OTA’s don’t bring business. Of course, they do by expanding your reach, but the realisation from each sale is not something to write home about in an out-an-out buyer’s market, where the customer is spoilt for choice.
But let’s first list the advantages with OTA listing.

The OTA Edge
OTAs provide travelers a single-window service for all their travel needs in exchange for a price – their commission. These agencies have grabbed a significant share of the market with one USP – offering to make multiple bookings at bargain prices, on behalf of the travelers – taking the load of planning off their shoulders. From booking a flight ticket, taxi service to a hotel room, everything gets taken care of from one touchpoint.

At the beginning of 2018, nearly  40% of digital bookings in the USA were through OTAs with commissions nudging 30%. The statistics are not very different in India, and hoteliers are gradually waking up to the fact that despite paying high commissions to OTAs, their realizations are low, due to heavy price-cutting practices; and they also end up diluting their brand identity and losing customer loyalty by not getting enough repeat bookings.

Adding to the hoteliers’ concern is that the internet-savvy, gadget-friendly millennial on-the-go holds more  than 30% of the market share. Of these,  more than 50% prefer to book through OTAs because of the convenience they offer at a low cost.

On the Flip Side

Compared to all other services, hospitality is unique in the sense that it’s not just a hotel property that you are selling but an experience of that property and OTAs detract from this very aspect – making your hotel incognito – a nameless, faceless, listing among a crowd. - Piyush Bhatnagar, Director (Sales), Ocean Palms Goa, Goa.

It’s all very well if you are an established five-star brand, but if you are a single-unit, boutique property, you are likely to find the selling tough through the OTA route, unless you simultaneously also work on strengthening your other sales channels; say your website.

Many OTAs refuse to share all but the barest necessary customer details with hotels. Moreover, customers may happily share their details and feedback with the OTA but will balk at sharing it again with the hotelier on your site.

This means you lose out on vital customer data, the opportunity to build customer relationships, and understand the customer experience, which are all crucial to growth.
In travel and hospitality, anticipation is a big part of the consumer journey and often the first step towards building a long-lasting relationship with your customer.

While a large number of bookings are made through OTAs, nearly 50% of travelers may also visit the hotel website to get a sense of the ambiance – but that’s just 50%, so you are effectively losing out on the other 50%, says Rahim Virani, Director, Ocean Palms Goa, Goa, thus driving home the need to balance the two sales channels.

OTAs may purport to speak for their customer but they are not your target customer. Customers coming through OTAs are therefore less likely to make an active and informed choice about staying on your property.

Post-visit contact is also an important aspect of building relationships – and this requires fetching details, that are far easier to collect at the primary touchpoint, i.e. the OTA site.
Our experience is that in building your brand, your own website and app are likely to play a very important role. Websites these days are not as expensive as they used to be in the pre-CMS days. We have decided to take this route in building our hotel brand – Ocean Palms Goa at  Calangute, Goa.

With good SEO and your own search and booking engine, you will not just save a tidy in OTA commissions, you can channel these funds in creating your own, strong digital footprint.

A final note, with ML and AI as active digital tools for growing your online business, the more data you have about your customer the better it is for your travel business – and what better way to collect this data than directly from your customer?

The bottom line is that if you want to get hold of your customer database in a digitalised marketplace and not lose our in the third-party OTA booking race, work on strengthening your web base first.

It’s all very well if you are an established five-star brand, but if you are a single-unit, boutique property, you are likely to find the selling tough through the OTA route, unless you simultaneously also work on strengthening your other sales channels; say your website.

Many OTAs refuse to share all but the barest necessary customer details with hotels. Moreover, customers may happily share their details and feedback with the OTA but will balk at sharing it again with the hotelier on your site.

This means you lose out on vital customer data, the opportunity to build customer relationships, and understand the customer experience, which are all crucial to growth.
In travel and hospitality, anticipation is a big part of the consumer journey and often the first step towards building a long-lasting relationship with your customer.

While a large number of bookings are made through OTAs, nearly 50% of travelers may also visit the hotel website to get a sense of the ambiance – but that’s just 50%, so you are effectively losing out on the other 50%, says Rahim Virani, Director, Ocean Palms Goa, Goa, thus driving home the need to balance the two sales channels.

OTAs may purport to speak for their customer but they are not your target customer. Customers coming through OTAs are therefore less likely to make an active and informed choice about staying on your property.

Post-visit contact is also an important aspect of building relationships – and this requires fetching details, that are far easier to collect at the primary touchpoint, i.e. the OTA site.
Our experience is that in building your brand, your own website and app are likely to play a very important role. Websites these days are not as expensive as they used to be in the pre-CMS days. We have decided to take this route in building our hotel brand – Ocean Palms Goa at  Calangute, Goa.

With good SEO and your own search and booking engine, you will not just save a tidy in OTA commissions, you can channel these funds in creating your own, strong digital footprint.

A final note, with ML and AI as active digital tools for growing your online business, the more data you have about your customer the better it is for your travel business – and what better way to collect this data than directly from your customer?

The bottom line is that if you want to get hold of your customer database in a digitalised marketplace and not lose our in the third-party OTA booking race, work on strengthening your web base first.

Retaining your brand identity in the OTA-driven market