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.

5 Cara Menjadikan Hotel Bajet Memiliki Potensi Besar Pada Tahun 2017

Jika anda memiliki sebuah hotel kecil, artikel ini sangat sesuai untuk anda. Artikel ini menerangkan bagaimana hotel-hotel kecil dapat bersaing setaraf dengan hotel-hotel yang besar pada 2017 dengan bajet yang sedikit dan kebebasan yang had dari segi pemasaran.

Apa yang anda boleh lakukan adalah dengan menggunakan sumber percuma (free resources) dengan sebaik-baiknya. Salah satu ‘free resources’ adalah dengan meletakkan keberadaan hotel anda di internet. Ini sangat penting untuk hotel anda menyerlah di dalam industri pelancongan dan hospitaliti.

Berikut beberapa tips untuk menaikkan hotel anda pada 2017:

1. Sasaran tetamu tertentu

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Memikirkan atau menetapkan sasaran tetamu anda adalah sangat penting supaya apabila anda telah mengetahui siapa sasaran tetamu, anda boleh fokus untuk melakukan segala usaha untuk mencapai kepada sasaran anda tersebut. Tapi sebelum tu, anda perlu memahami pasaran semasa dan situasi hotel anda.

Antara perkara yang perlu dipertimbangkan adalah:

  • Lokasi Hotel anda
  • Jenis-jenis kemudahan dan perkhidmatan yang anda boleh berikan
  • Potensi pesaing di sekitar lokasi anda dan apa yang mereka lakukan
  • Jika ada apa-apa tarikan berhampiran atau tempat-tempat pelancongan yang berdekatan dengan lokasi hotel anda

Contohnya, jika hotel anda terletak di “World Trade Centre” tetapi sasaran tetamu anda pula adalah remaja yang sedang mencari percutian yang damai, maka anda perlu mengubah sasaran tetamu anda dengan segera. Sebaliknya cuba pelancong peniaga asing.

2. Menyediakan perkhidmatan yang baik walaupun hanya hotel bajet

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Ada dua jenis tetamu atau pelancong yang lebih cenderung untuk menulis ulasan pada hotel. Tetamu yang betul-betul berpuas hati dengan layanan kita atau sebaliknya. Kami yakin anda mesti tidak ingin membaca ulasan dari jenis yang kedua ini betul? Tiada siapa yang sempurna, tapi anda boleh berusaha dengan tidak memberi peluang kepada mereka untuk menulis ulasan yang buruk tentang hotel anda, kerana apabila ia telah ditulis di internet, ia akan kekal di sana selamanya.

Dikatakan bahawa 7 daripada 10 tetamu yang berpuas hati akan menceritakan pengalamannya kepada sekurang-kurangnya 4 orang yang lain. Ini membuktikan bahawa khidmat pelanggan sangat penting sehinggakan kita perlu berani mengambil risikonya. Latih pekerja-pekerja anda untuk menyerlahkan kebaikan di dalam diri mereka dan tunjukkan kepada tetamu yang mereka mengambil berat. Jangan berlagak dan tidak mengendahkan mereka. Benar-benar berinteraksi dengan mereka.

3. Pastikan laman web anda ‘simple’ dan ‘responsif’

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Memberikan maklumat yang ringkas dan relevan adalah penting untuk menjadikan pelawat anda daripada hanya melawat laman web anda kepada menjadi pelanggan anda. Cuba jangan meletakkan informasi yang tidak diperlukan sebagai contoh, penulisan mengenai “menjadi hotel yang pertama di dunia”. Anda boleh lakukan penulisan seperti itu tetapi bukanlah di laman web hotel yang sepatutnya menjadi tempat pertukaran jualan hotel anda.

Sekarang anda sudah mempunyai isi kandungan yang betul, cuba jadikannya kelihatan menarik supaya ia melambangkan identiti hotel anda. Pastikan butang navigasi ke halaman yang paling relevan seperti laman untuk dihubungi, laman tentang hotel anda dan halaman tempahan adalah jelas. Tidak lupa juga, pastikan laman web anda mudah dilihat pada semua peranti terutamanya telefon pintar dan tablet.

Pada peringkat ini, kami anggap anda sudah mempunyai laman web untuk hotel anda. Sekarang sudah masuk ke tahun 2017 dan jika hotel anda masih tidak mempunyai laman web lagi, anda perlu risau bagaimana ingin bersaing dengan hotel-hotel yang besar. Jika anda tidak mempunyainya lagi, dapatkannya secara percuma hari ini. Ia dilengkapi dengan ‘Booking Engine’ sekali.

4. Buat blog atau blog dengan lebih baik

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Jika anda sudah mempunyai laman web hotel tetapi anda tidak mempunyai blog lagi, kemungkinan anda perlu berfikir untuk mewujudkannya. Ramai di antara kita bukanlah seorang Penulis yang profesional tetapi kita boleh menjadikannya sebagai hobi. Antara kandungan yang boleh dikongsi di dalam blog hotel anda adalah tentang sejarah hotel anda, proses pengubahsuaian hotel anda ataupun acara-acara yang diadakan di hotel anda.

Satu perkara lagi, memiliki blog dan memastikan ia dikemas kini dengan kerap dan bermaklumat akan menghasilkan keajaiban untuk anda. Blogging boleh meningkatkan SEO anda dan itulah sebabnya ia adalah satu strategi yang kebanyakan syarikat kini beralih kepadanya untuk mendapatkan nama mereka di bahagian atas halaman hasil carian Google.

5. Gunakan Media sosial

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Kita semua tahu bahawa media sosial adalah percuma tetapi cuba untuk tidak keterlaluan menggunakannya. Pilih platform anda dengan bijak dan cuba untuk tidak terikut-ikut dengan keadaan semasa dan membuat akaun pada setiap platform media sosial. Facebook adalah satu kemestian kerana ia menarik orang daripada semua peringkat umur. Instagram, Twitter dan Pinterest juga adalah permulaan yang baik. Sesetengah platform berfungsi lebih baik daripada yang lain terutama apabila anda mempunyai sumber yang terhad atau ingin mengiklankan produk tertentu.

Apabila anda berada di media sosial, ia adalah penting untuk anda cuba melibatkan diri dengan pengguna anda. Balas komen dan mesej mereka. Jangan hanya membalas ulasan yang baik sahaja, balas juga ulasan yang buruk. Tunjukkan bahawa anda boleh terima kritikan dan bersedia untuk memperbaikinya. Anda juga boleh mengumumkan kembali atau menampilkan tetamu hotel anda di dalam akaun media sosial anda! Itu akan menjadikan mereka lebih daripada gembira untuk kembali.

5 Ways Small Hotels Can Make It Big in 2017

If you own a small hotel, this article is made for you. We are talking about how it’s time for small hotels to make it big in 2017 if you have a small budget and don’t have a lot of freedom when it comes to shelling out big money for marketing.

What you can do is, make the most out of the free resources available to you. One of the free resources is getting yourself on the Internet. Having an online presence is important in standing out in the tourism and hospitality industry. As a small hotel, it’s a bonus to have your name online because many of your competitors are not yet. Not to mention, the vast majority of online marketing is free, making it a smart investment.

So, here’s a few tips to make your hotels presence up in 2017:

1. Target specific guests

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It’s it important to confirm or figure out who your target audience should be and do everything it takes to reach them. Before that, you need to understand the existing market and your situation. Few things you should consider are:

  • The location of your hotel
  • Types of amenities and service you can provide
  • Potential competitors around your location and what they do
  • Is there any nearby attractions or tourist spots near your hotel location

For instance if your hotel is located at a world trade centre but your target audience is young adults who are seeking for a peaceful vacation, you might need to transform your target audience. Try targeting foreign business travellers instead.

2. Even if you’re small, have a big heart

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There are 2 types of guests or travellers who are more inclined to leaving online reviews for hotel. The highly satisfied guests and the opposite. We are pretty sure you would avoid reading reviews from the latter. No one is perfect but try not to give them the chance to submit a bad review about your hotel because once it is up online, it’s there forever.

It is said that 7 out of 10 satisfied guests are most likely to share their experience with at least 4 more people. Customer service is so important that we have to bold this. It doesn’t matter if your rooms are slightly small when you have a big heart. Train your staff to bring out the kindness in them and show the guests that you care. Don’t act as a nameless or faceless business; talk to your guests genuinely.

3. Keep your website simple and responsive

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Offering concise and relevant information is important to turn your web visitors into customers. Try not to stuff them with information which are not needed for example, a write-up about the first hotel in the world. You may do this, but not in the hotel website where you are supposed to be expecting sales conversion.  We will further explain about this in the next point.

Now you have the right content, try to make it visually appealing in a way that it represents the business spirit of your hotel. Make sure the navigation buttons to the most relevant pages such as the contact page, about page and the reservation page are noticeable. Not forget, make sure your website is easily viewable on all devices too especially mobile and tablet.

At this stage, we assume that you already have a website for your hotel up. It’s 2017 and you can’t expect to make it big in time if you haven’t have a website yet. Well, maybe if you haven’t have one, consider getting one for free today. Did we mention that it comes with a booking engine too? Yes, it does.

4. Make a blog or blog better

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If your hotel doesn’t have a blog yet, chances are you should start thinking of creating one. Many of us are not writers by profession but we can always turn it into a hobby. Some of the contents which are shareable on a hotel blog can be a write-up about the history of your hotel, the renovation process of your hotel or editorial posts of events held in your hotel.

One more thing, having a blog and keep it updated regularly and informatively will do wonders for you. Blogging can vastly improve your SEO and that is why it’s a strategy that many companies are turning to for getting their name at the top of Google’s search results page.

5. Use social media

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We all know that social media is free but try not to overdo it. Choose your platforms wisely and try not to jump on the bandwagon and make an account on every social media platform. Facebook is a must as it attracts people of all ages. Instagram, Twitter and Pinterest are great start. Some platforms work better than others especially when you’re dealing with limited resources or advertising a specific product.

When you’re on social media, it is important that you try to engage with your users. Reply to their comments and messages. Do not just reply to good reviews, respond to bad reviews too. Show that you can take in criticism and is ready to improve. You may even repost or feature your hotel guests on your account! That would make them more than happy to return.