Direct Booking VS. OTA, What Hotel Need To Know in 2017

The relationship between hotels and OTA has always been complicated. Nobody can deny the impact and influence OTA has had on global travel and hospitality, connecting millions of travellers to hotel rooms online every year. OTAs became powerful and efficient by making the journey of booking a hotel less of a hassle for travellers.

In this article we will talk about:

  1. The Power And Influences Of OTA.
  2. What It Means to Hotel.
  3. How Major Hotel Chains Are Reacting.
  4. What Can Small and Medium hotels Do (including those in Asia)

But before we get started, some statistics on travel industry:

  • The world’s travel industry is worth more than $2.5 trillion USD and is currently the fastest growing sector.
  • There are more than 10 million searches related to travel are carried out in Google Search per month.
  • Based on 10 million searches, an estimated 3 million web traffics are going into top 10 OTAs alone.
  • com is the leading travel site and OTA for the industry. In 2016 year alone, it generated almost 1.1 billion visits to its site.
  • Expedia spent 4.3 Billion USD in advertising alone in 2016, an increase of almost 1 billion USD from 2015.
  • Priceline Group spent 3.5 Billion USD on marketing. Priceline Group consist of Booking.com, Priceline, Agoda, Kayak and many more travel related companies.
  • 85% of travellers said Price is the most important factor when determining where to book according to a survey by Google.


The Power And Influences Of OTA
 

Priceline Group

  • Biggest online travel agency in the world.
  • Started in 1997.
  • $88 billion market capitalization.
  • Brands include Booking.com, Agoda, Kayak, Momondo, Booking Suite.
  • Dominant in Europe and Asia, controls about 62% of Europe market.

Expedia Inc

  • Started in 1996 as a division of Microsoft.
  • $22 billion market capitalization.
  • 20 brands under its name including Hotel.com, Trivago, Travelocity, HomeAway, Expedia.com and Orbitz.
  • controls about 75% of the US market.

2
Image from FredericGonzalo

Anyone who is not familiar with the online travel landscape may be under the impression there are tens, if not hundreds of websites to go to when booking for hotels. The truth is many websites are owned by the same company and the two dominant companies are Priceline and Expedia. The two largest OTA in the world are Priceline and Expedia and they have been around for 20 years.

OTA was seen as a convenient distribution channel where hotels and airlines could sell extra inventory.

Back in the days, online distribution was not really a priority. In the early days, hotels sold to wholesalers, who sold to tour operators who sold to travel agents and finally to travellers. The problem with this system is the transparency, nobody knows how much was being paid. When OTA entered the industry, it gave control back to the hotel and guest how much was they were getting.

Fast forward to current days, technology has shifted the pattern of how travellers made a booking while travelling and this is where OTA’s shine. They have been focusing on leveraging the power of technology where it is consider too costly and complicated for small and medium hotels. OTAs help hotel and homestay owner to solve distribution problem by helping them to sell certain percentage of rooms on their platform.

Good news to hotelier and homestay owner? Not entirely

3

Before you (a hotel/ homestay/ lodge owners who list your property in OTAs) rejoice. Let’s take a look at why you should be cautious of putting too much egg in one basket, or depending too much on OTA to bring business for you.

1. OTA Are Spending Money To Market Their Own Brand

OTAs invested heavily in digital marketing and digital advertising to lure web users to their sites. This creates a Billboard Effect that works in OTA’s favour. Most travellers search accommodation by going through the huge list of hotel and homestay collection in OTA website, this habit is shape by the huge marketing effort done by OTAs throughout the years. That is why OTA brand are so well-known and acknowledge by travellers because it gives them options to choose the accommodation that is most suited to them.

“In short, hotel brand name is not being recognized by travellers.”

2. OTA Can Change The Rule Of The Game

As the numbers of merchant grow and OTA became increasingly dominant, they began to alter their business model. According to Hotelogix, Large hotels were offered lower booking commissions while smaller independent hotels were paying higher. The reason is larger hotels have more rooms to sell and can negotiate with OTA to lower their commission so that they allocate more rooms to sell on OTA. Besides that, commission made to OTA by hotels will not remain forever, the higher the commission your hotel pay, the better ranking your hotel position will be in OTA website.

“This translates to lower profit margin for hotels.”

3. Hotels Do Not Own Their Customer Data

OTA contract often stipulate that hotels can’t market to customers that booked directly with the OTA. Last year, Booking.com stated that they will no longer provide hotels with customer emails. To have a piece of customer information is important for hotels as the best customer relationships come when you are able to engage with them sooner rather than later. The customer experience started long before a traveller check-in to the hotel to create a memorable holiday experience. Losing the control of the customer’s data means losing the connection and relationship that is unique to hotels.

“In the end, OTA will emerge as the winner in the online hotel booking industry.”

 4
Image from morgan socialities

 Hotels are overly dependent on OTAs. With each passing year, hotels pass more and more money to Expedia, Booking.com, Priceline and the others.” – Forbes

OTA vs Hotel Brand (direct online booking) ratio fell to 51:49 in year 2016, compared to 46:54 in 2012 according to PhocusWright. They also stated that hospitality is the ONLY travel sector in which OTAs are gaining share at the expense of independent hotel brands. Direct online revenue from airline, car rental and cruise sectors are all increasing at the expense of OTA. 

Major Hotel Chains Around The World Are Taking Matters Into Their Own Hands

  • Hilton Worldwide

Hilton Hotel made sure the message were passed to the public by putting their video advertisement in front of 25 million viewers during the 2016 Grammy Awards. The company said the “Stop Clicking Around” campaign is its biggest yet in the company near-100-year history.

The company said 1.6 million free nights went unearned in 2015 because of bookings made through third party sites. They aim to offer benefits such as lower price, free wifi, digital key, and points for those who book direct with them.

  • Marriott Hotel Chain

Marriott launched an entirely new campaign in 2016 called “It Pays To Book Direct”. The hotel chain has spent more than $1 million in 2016 in marketing this campaign and their ultimate aim is to influence users to book directly through their own hotel website instead of OTA to get better rates or benefits.

  • Starwood Hotels & Resorts

5

Starwood (parent company of St. Regis, Westin and Sheraton) stated in their own direct booking hotel website that the hotel will match any rates that is lower than their own website, as well as free internet and other benefits that is not offered if guest book through OTA or third party website to maintain or increase their hotel profit margin.

What can small & medium hotels with limited budget do?

1. Embrace Technology – Have Your Own Hotel Website

76% of online bookings happen through OTA. However, 50% of the internet users will visit the official hotel website after discovering them through OTA. This is where opportunity comes in. The cost of building a website is so much cheaper now and also easier to manage. Besides that, hotel can let company like Softinn Solutions handle the task by building your official hotel website complete with booking engine for free.

2. Provide Special Benefits For Direct Booking

This method is to create an awareness to travellers by giving them an impression that booking through official hotel website will have something different compare to booking through OTA. Besides that, a guest who stayed at your hotel who received this the perks will leave positive comments on social media which will again influence other web users to book through the official website.

Read More on the guide for hotels to bring direct booking through the hotel website.

3. Run Online Marketing Promotion

Major hotel chains like Marriott and Hilton have both funded marketing campaigns aimed directly at consumers to start educating them by telling them direct booking is better. Small and medium hotels should start doing the same. While small hotels with very little budget cannot run advertisements on television and billboards, the cost of running digital marketing on Google is relatively cheap. Spending few thousands USD on Google Advertisement will reduce the reliance on OTA marketing in the long run.

Read More about the benefits of promotion and how promo code can help increase your business.

4. Provide incentives for returning guest

By giving special treatment for seasoned guest for your hotel, you are strengthening your relationship with a satisfied customer. Re-marketing to the same person who has already been to your hotel require less effort and less financial spending. Since only major hotel chains have a loyalty program, small and medium hotels can provide special promo code specifically target at returning guest to encourage them to come back to your hotel.

5. OTA is still important

Yes, you read that right, even though ultimately what hotels and homestay owners desire is to not pay commissions to any intermediaries, relying on OTA is still an acceptable option for hotels. The influence of OTA will be as strong as ever, having a listing on OTA is still a way for less popular hotels to be noticed by online users.

Learn About how Softinn has partnered with OTAs like TripAdvisors and Tuniu from China to broadcast hotels and homestay without extra charge on the merchant.

**Above Article is Written by Softinn Solution**

Softinn Solutions Sdn. Bhd. is an emerging travel technology company that develops a cloud-based hotel reservation system for small and medium-sized hotels. Learn how we help hundreds of hotels better manage their business and increase sales.

Head over to Softinn Solution homepage to learn how Softinn helps small and medium hotels and also homestays save more by having all the essential functions in the Softinn Extranet. The best part is there is no upfront payment needed.

Softinn helps hotel or homestay build a website with booking engine and payment system so that merchants can focus on running their business without much hassle.

WP_20161230_16_45_21_Pro
Softinn Solutions is Headquartered in Melaka, Malaysia.

7 Tip Untuk Meningkatkan Booking Homestay

Bisnes homestay sedang membina reputasinya dengan pantas dalam industri pelancongan sejak beberapa tahun yang lalu. Kemungkinan besar ini adalah disebabkan oleh peningkatan dalam permintaan pelancong terhadap tempat penginapan yang lebih nyaman dan selesa atau pendek kata dalam Bahasa Inggeris, “home away from home” apabila mereka sedang melancong.

Memulakan bisnes homestay boleh dikatakan mudah sekiranya anda mempunyai rumah atau bilik yang kosong. Walau bagaimanapun, pengekalan bisnes ini boleh menjadi sebuah cabaran kerana pemilik-pemilik homestay sering berasa risau jika homestay mereka ditinggalkan kosong. Justeru, kami telah mengumpulkan beberapa tip untuk membantu pemilik homestay seperti anda untuk meningkatkan kadar booking.

1. Mencipta sesebuah tema atau gaya

Ramai pemilik homestay mempunyai tanggapan bahawa perkara ini adalah kurang penting tetapi hakikatnya, dengan mencurahkan sedikit usaha dalam menghiasi homestay berdasarkan tema yang tertentu, ini akan menjadikan homestay anda lebih unik daripada homestay yang lain.

Contoh-contoh homestay yang bertema:

Tema Marin
Tema khemah
Tema khemah
Tema Bali
Tema Bali

Pengubahsuaian homestay boleh menjadi sebuah proses yang menarik terutamanya apabila anda telah mempunyai tema yang sesuai untuk homestay anda. Tip ini amat berguna kepada pemilik homestay yang menjalankan bisnes homestay di luar bandar ataupun jauh dari tempat-tempat pelancongan. Tahukan apa yang sepatutnya dilakukan? Anda menjadikan homestay anda sebuah tempat penarikan pelancong.

2. Menjaga kebersihan and penyelenggaran homestay

Ini merupakan tip yang paling asas tetapi janganlah terkejut jika mendapati bahawa terdapat pemilik homestay yang gagal memahami kepentingan ini untuk mengambil tindakan. Kami juga mempunyai pemilik homestay yang tidak akan mengabaikan tanggungjawab ini dan akan mengambil tindakan yang wajar untuk memastikan homestay mereka berada dalam keadaan yang baik.

Potonglah rumput, bersihkanlah permaidani, baikilah paip yang bocor dan lakukanlah apa-apa sahaja yang boleh menjadikan keadaan homestay anda seolah-olah rumah baru. Tambahan pula, para tetamu akan lebih suka kembali ke homestay yang sentiasa berada dalam keadaan yang baik.

3. Menyediakan kemudahan asas yang diperlukan

Hari ini, kami boleh mendapati bahawa homestay telah meningkatkan taraf ke tahap yang serupa dengan hotel dan kadang-kalanya, lebih memuaskan. Kami menyedari bahawa kebanyakan homestay telah mula menyediakan kemudahan asas seperti tuala mandi, syampu, syampu badan dan sebagainya. Penyediaan yang teliti ini sekurang-kurangnya akan menyumbang kepada peningkatan kadar booking kerana selain daripada membandingkan harga, para pelanggan akan membandingkan kemudahan yang disediakan oleh homestay sebelum membuat piliahan.

Jangan berhenti membaca kerana kami akan mendedahkan tip berkaitan dengan kemudahan-kemudahan yang paling diperlukan oleh tetamu. Mereka merupakan bonus sekiranya homestay anda memilikinya.

Pertama sekali dalam senarai kami adalah kemudahan wifi. Ini sudah pasti adalah merupakan kemudahan yang paling diperlukan oleh para tetamu dalam era media digital ini. Pilihlah pelan Internet yang sesuai dan saksikanlah peningkatan dalam booking anda. Selain daripada wifi, kemudahan yang boleh disediakan adalah seperti peralatan bbq, seterika, pengering rambut, peralatan memasak dan penghawa dingin dalam setiap bilik.

4. Menyediakan gambar yang berkualiti untuk homestay anda

Mempunyai gambar yang berkualiti untuk homestay anda merupakan asset utama untuk menjayakan bisnes homestay. Gambar yang berkualiti akan memberikan tanggapan yang positif kepada tetamu yang sedia membuat penempahan. Kalau anda masih belum mempunyai gambar homestay anda yang diambil secara profesional, anda mungkin perlu mendapatkan seorang juru gambar dengan segera. Anda hanya memerlukan satu set gambar-gambar yang berkualiti tinggi untuk kerja-kerja pemasaran yang bakal dilaksanakan. Anda juga boleh mengambil gambarnya sendiri jika anda memiliki kemahiran fotografi.

Sekiranya anda kurang pasti terhadap gambar yang perlu disediakan, sila menggunakan ini sebagai rujukan:

  • 2 gambar luaran homestay
  • 1 gambar ruang tamu
  • 1 gambar dapur
  • 1 gambar untuk setiap bilik
  • 1 gambar untuk setiap bilik mandi
  • Bonus: 2-3 gambar untuk kawasan awam, taman, tempat letak kereta, kolam renang (jika ada)

5. Mendapatkan akaun social media

Peningkatan kemudahan teknologi menjadikannya lebih senang kepada kita untuk mempromosikan bisnes secara online. Cara yang paling senang dan murah adalah untuk menangani aspek social media. Menyediakan sebuah halaman atau akaun untuk homestay anda merupakan perkara yang boleh dilakukan dengan senang dan yang pentingnya, anda boleh menyediakan seberapa halaman (jika anda memiliki lebih daripada sebuah homestay) yang diperlukan secara percuma. Walau bagaimanapun, kami ingin mengingatkan bahawa elakkan daripada mempunyai beberapa halaman atau akaun untuk homestay yang sama supaya tidak mengelirukan.

Baca juga: How To Create Homestay Promo Flyer With MS Word

Tambahan pula, social media membolehkan anda untuk berhubung dengan tetamu yang berminat dengan lebih senang terutamanya sekiranya platform tersebut menawarkan kemudahan mesej kerana sekali lagi, pertukaran mesej melalui social media biasanya adalah percuma. Begitu juga dengan penghantaran and perkongsian gambar homestay.

6. Menerima booking secara online

Sekarangnya kami telah boleh melayari Internet dan social media, kebanyakan pemilik homestay juga telah mula menerima booking online secara manual melalui social media dan aplikasi mesej. Tetapi, proses ini boleh menjadi agak tertekan terutamanya semasa dilakukan secara manual pada musim puncak dan cuti umum.

Oleh itu, agensi pelancongan online (OTA) menawarkan platform booking untuk meringankan beban pemilik homestay. OTA membantu pemilik homestay mendapatkan booking dengan menyenaraikan homestay tersebut dalam laman web mereka dan pada masa yang sama, process mana-mana booking yang melalui sistem online booking mereka. Homestay yang disenaraikan dalam laman web OTA akan mendapatkan lebih pendedahan dan lebih senang untuk ditemui oleh para pelancong tetapi pada masa yang sama, homestay anda akan lebih terdedah kepada persaingan kerana akan disenaraikan bersama homestay yang lain.

Baca juga: What Are The Criteria of Good Booking Engine

Biasanya, OTA akan mengambil sejumlah komisen daripada setiap booking yang berjaya dibuat oleh itu, pastikan anda memilih platform booking online yang sesuai untuk homestay anda. Selain itu, mengetahui bagaimana anda boleh mendapatkan online booking engine yang percuma.

7. Menawarkan program rujukan atau program kesetiaan

Terdapat sesetengah pelancong yang cenderung kembali ke lokasi yang sama mahupun untuk percutian ataupun untuk berurus niaga. Justeru, inilah peluang anda untuk memastikan mereka kerap kembali ke homestay anda. Salah satu caranya adalah untuk menawarkan mereka ganjaran yang boleh menyebabkan mereka tidak teragak-agak untuk kembali ke homestay anda sempena lawatan mereka yang seterusnya.

Di sinilah beberapa tip untuk program kesetiaan yang boleh ditawarkan:

  • Tawarkan diskaun untuk penginapan seterusnya. Semakin kerap kali penginapan, semakin banyak diskaun yang dilayaki.
  • Percuma satu malam penginapan kepada tetamu kerap yang kembali sejumlah kali.
  • Pintu hadiah atau rebate kepada tetamu kerap.

Selain itu, program rujukan juga merupakan idea yang baik kerana ia akan membantu mempromosikan homestay anda kepada lebih ramai pelanggan.

Adakah tip-tip ini membantu? Cubalah dan beritahu kami. Kalau anda berasa tip-tip ini berguna, sila berkongsi kandungan blog ini dengan kawan-kawan anda dan jika anda mempunyai tip lain yang ingin berkongsi dengan para pemilik homestay, jangan lupa meninggalkan komen pada ruang dibawah!

7 Tips To Increase Your Homestay Bookings

Homestay business is building up its reputation rapidly in the travel industry since the past few years. This is most likely due to the rise in demand of travellers seeking for a more homey and cozy accommodation or in short, a “home away from home” when they are travelling.

Starting a homestay business can be easy when you have vacant rooms or houses. However, maintaining the business can be a challenging commitment. Homestay owners are constantly worried about filling up their vacancies and therefore, we have come up with some tips to help you homestay owners to fill up your homestays and perhaps increase your sales.

1. Creating a theme or style

First off, many homestay owners deem this unnecessary but in fact, by putting in some effort into applying and beautifying your homestay according to a certain theme, this could be a game changer.

Examples of themed homestays:

20580145 - child room interior with marine theme
Marine Theme
21963980 - green child bedroom interior with camping theme
Camper theme
bali
Bali theme

Homestay make-over can be an interesting process especially when you have a theme in mind. This tip is highly recommended for homestay owners who are running the business in the outskirt of town or far away from the tourist attractions. What do you have to do? You turn your homestay into a tourist attraction.

Get help from a professional interior consultant if you need to get the ideas running!

2. Cleanliness and Maintenance

This is probably the most basic tip but do not be surprised when some owners fail to understand this and take it into consideration. We have had numbers of homestay owners who wouldn’t loaf on this and are willing to take excellent efforts in maintaining the condition of their homestays.

Mow that lawn, clean that carpet, repair the leaking pipes and do just anything that could make the condition of your homestay look as if you first bought it. This could reduce the probability of guests complaining about that faulty air-con too and travellers would love to return to a well-maintained homestay. Always.

3. Providing necessary amenities

These days, we can easily find homestays living up to the level of hotels and sometimes, even better. We have come to realise that many homestays are beginning to provide basic amenities such as bath towel, shampoo, body gel etc. Such detailed and thoughtful preparation would somehow make a difference in your sales where besides comparing rates, the next thing a traveller do is comparing the amenities offered by the homestays before making their choices.

Don’t stop reading as we are about to reveal some tips on the top amenities every traveller is looking for. Those are the plus points if your homestay has them.

First in our list we have Wifi connection. This is undoubtedly the top amenity every traveller is looking for at this booming age of digital media. Invest in a decent Internet connection and start seeing your sales rolling in. Other amenities worth considering and investing are bbq equipment, iron board, hairdryer, cooking facilities and of course, air-con in every room.

4. Having good photos of your homestay

Having good photos of your homestay is the biggest asset to a successful homestay business. Good photos help in making a great first impression to the travellers when they make their booking. If you have not had your homestay photos taken professionally, you should start thinking about hiring a professional to do it. Any decent photographers will do in this case as you just need a set of high quality and good photographs of your homestay for all your marketing purposes. If you think you are quite a decent photographer, you may even do it yourself!

If you are unsure of the photos you should be preparing, here’s a quick tip:

  • 2 photos of the exterior of your homestay
  • 1 photo of the living room
  • 1 photo of the kitchen
  • 1 photo of each room
  • 1 photo of each bathroom
  • Bonus: 2-3 photos of the common area, garden, parking space, swimming pool

5. Getting on social media

The rising age of technology makes it easier for us to promote our business online and the easiest and cheapest way is to tackle down the social media aspect. Creating a page or account for your homestay is easy and what’s more important is that you can create as many pages (if you own multiple homestays) as you need for free. You are basically building a platform for all your future online marketing plans at zero cost. Nonetheless, we suggest not more than an account or page for the same homestay to avoid confusion.

Read also: How To Create Homestay Promo Flyer With MS Word

Furthermore, it’s easier to get in touch with potential guests via social media especially when the platform offers messaging feature because once again, exchanging messages on social media is usually free. Not forget, sharing and posting images of your homestay are free too.

6. Accepting online bookings

Now that we have the access to the Internet and social media, many homestays’ owners are beginning to accept online bookings manually via social media and messaging app. However, it could be stressful to process bookings during the peak season and public holidays when you do it manually.

Here comes the rescue of booking platforms provided by online travel agencies (OTA). OTAs help homestay owners fill up their vacancies by listing the homestays on their website and at the same time, process any bookings that went through their online booking system. Listing on OTAs enable homestay owners to get more exposure and reach out to travellers easier but simultaneously, your homestay will be more prone to competition as you will be listed together with other homestays.

Read also: What Are The Criteria of Good Booking Engine

Usually, OTAs take a cut or a certain amount of commission from each successful booking made so make sure you choose the right online booking platform for your homestay. Also, find out how to get a free online booking engine.

7. Offering loyalty or referral program

Some travellers tend to return to the same location for leisure or business travels so this is your chance to make them stay at your homestay over and over again. One of the ways is to offer them hard-to-resist reward which would not make them hesitate to stay in your homestay again during their next visit in town.

Here are some tips for a loyalty program worth offering:

  • Offer discount for their next stay. The more they stay, the more discount they are entitled to.
  • Free one night stay for guests who have returned more than a certain time.
  • Free door gift or rebate for returning customers

While we are at it, referral program can be a good idea too as it helps promoting your homestay to more travellers. More travellers = more sales.

Do you find these tips helpful? Try them out and let us know. If you love them, don’t forget to share this post with your friends and if you have more and want to share it with your fellow homestay owners, feel free to leave us a comment below!