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.

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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

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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.”

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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

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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.

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Softinn Solutions is Headquartered in Melaka, Malaysia.

如何在租房系统里添加房间图片

这篇文章是由Softinn Solution为您呈现。

结合Softinn Extranet最新推出的新功能,民宿和酒店负责人现在可以亲自更改各个房间的照片。

往下移动以获得更多有关特征图像在一个网页重要性的信息。

英文版本请点击这里.

如何添加或更新房间图像

步骤1:登录后台系统 (https://booking.mysoftinn.com)后,您将会被引导至主页面。然后选择“More”再选择“Room” (如下图所示)main-page-extranet

步骤2:点击“Edit Details”room-page

步骤3:Room Editor窗口弹出,在“Photo Section”上载图片,然后点击“Save changes”即可。room-edit-page

步骤4:一旦图片上载成功,请确定您所看到的如下图所示,并且所上载的图片是正确的。done-update-message

上载图片后,它将会显示在租房系统里。after-upload-image

游览Softinn Solution的网页去了解更多有关云端预定系统的好处 – 为什么它将取代传统的酒店和民宿预定方式。

一张图胜过千言万语

有65% 的人是通过文字去学习和作出决定。而每一天平均都会有一个互联网用户被这上百个帖子所掩盖。不过在这科技发达的时代,人们通过互联网搜索或浏览的趋势不断地上升,而大部分像Facebook,Instagram 和 Snapchat这样的社交平台也越来越受到大众的喜爱。能被大众如此喜爱的原因就是他们不像其他平台只提供文字信息,同时它也为大家提供了有趣的视觉信息。

这里有提供一些增加视觉影响的建议

  • 我们的大脑有90% 是接受视觉信息(包括文字)。
  • 人们记得他们所看到的80%(在视觉)。
  • 网站使用的视觉教具会更有效的说服读者或买家采取行动。
  • 视觉能使记忆更长久。

a-picture-is-worth-a-thousand-words-3图片来源: hikingartist

社交媒体和广告商们不是唯一一个受益于视觉上的策略的行业,小型企业家例如酒店和民宿负责人也能够通过视觉策略增加消费者的购买欲望和帮助消费者做出决定。

不知在这期间您有注意到现今的应用程序和软件都变得更加丰富,多姿多彩,以及增加了不少的视觉吸引力。而这就是视觉策略的重要性。

Kemas kini: Menambah gambar bilik dalam Booking Engine

Catatan ini di bawakan oleh Softinn Solution.  Bersempena dengan ciri terbaru yang dikemaskini iaitu membolehkan pemilik hotel dan homestay untuk memuat naik serta mengubah gambar bilik hotel/homestay mereka.

Untuk mengetahui lebih lanjut berkenaan kepentingan ‘Featured Image’ di dalam laman web, teruskan membaca.

Klik di sini untuk versi Inggeris

(Perhatian kepada Softinn ‘Merchant’) Cara Untuk Muat Turun Gambar pada Bilik Hotel Anda

Langkah 1: Log masuk ke halaman admin Softinn Extranet dengan melayari ke https://booking.mysoftinn.com/ dan pilih “More” dan  kemudian pilih “Room”.main-page-extranet

Langkah 2: Pilih “Edit Details”room-page

Langkah 3: Seterusnya, penyunting bilik akan muncul. Muat naik gambar yang betul, kemudian tekan “Save changes” untuk menyimpan perubahan.room-edit-page

Langkah 4: Akhir sekali, pastikan anda telah memuat naik gambar yang betul. Nantikan tempahan yang akan membanjiri hotel anda!done-update-message

Selepas muat naik gambar, ia akan muncul di dalam “booking engine”after-upload-image

Sila layari laman web Softinn Solution jika ingin mengetahui manfaat menggunakan Sistem tempahan Cloud (Cloud Reservation System)

Sekeping Gambar Membawa Seribu Makna

65% manusia belajar atau membuat keputusan melalui teks. Setiap hari, pengguna internet dibanjiri dengan beratus catatan. Pengguna menggunakan internet untuk mencari atau melayari sudah menjadi trend yang semakin meingkat. Platform social utama seperti Facebook, Instagram dan Snapchat semakin popular kerana mereka menawarkan informasi yang berbeza dari platform yang lain iaitu dengan menawarkan informasi dalam bentuk visual.

Berikut adalah beberapa tips berkenaan peningkatan pengaruh visual.

  • 90% informasi yang otak kita terima adalah dalam bentuk visual
  • Manusia ingat 80% dari apa yang mereka lihat (in visual)
  • Website yang menggunakan visual mempunyai 42% lebih berkesan dalam meyakinkan prospek ataupun pembeli untuk bertindak.
  • Informasi visual akan terus masuk ke ingatan jangka panjang.

a-picture-is-worth-a-thousand-words-3Image source: hikingartist

Media sosial dan juga pengiklanan bukan sahaja industri yang akan memberi manfaat daripada strategi visual yang kuat ini. Pengusaha perniagaan kecil-kecilan seperti pemilik hotel dan homestay juga boleh meningkatkan keinginan pengguna untuk membeli atau membantu pengguna membuat keputusan melalui alat bantuan visual seperti menyediakan gambar.

Adakah anda perasan bahawa aplikasi dan perisian yang terkini dikeluarkan lebih berwarna-warni dan mempunyai lebih banyak tarikan visual? Ada sebab mengapa ianya begitu.