If you’re a hotelier looking to boost hotel bookings, then you should look to OTAs. With OTAs, hotels can increase revenue, although this revenue boost comes with a cost of up to 30% commissions on every booking. Nevertheless, there are few better ways to increase a hotel’s visibility for potential customers.
Nowadays, with the boom of online bookings, a presence on the best OTA sites is vital for hotels; without it, you will be invisible to many customers. So, keep reading to find out what are OTAs for hotels, how they work, how they can increase your hotel bookings, and what are the top 10 sites.
What are OTAs for hotels?
OTAs for hotels, also known as Online Travel Agencies or Online Tour Operators, are third-party websites that are used for online distribution, generating brand exposure for your hotel. They act like offline travel agencies in the sense that they sell all kinds of different hotels in one place, but with the difference that potential customers have the possibility to book instantly.
OTAs prove to be of particular advantage to small boutique hotels, offering the chance to not only drive bookings without having to invest in their own booking engine, but also the possibility to show up in search results without having to invest heavily in their own marketing budget. Essentially, OTAs give hotels a marketing and a distribution channel in one.
How OTAs can increase your hotel bookings
Since increasing hotel bookings is one of the primary concerns of hoteliers, it’s important to understand how exactly OTAs can increase your hotel bookings. OTAs can increase hotel bookings by giving you access to a worldwide marketplace of potential clients that are looking for a hotel room. Furthermore, these clients might be otherwise unreachable without working with an OTA.
Another way OTAs can increase hotel bookings is through their market intelligence. Since they function worldwide and have big budgets, OTAs have the capacity to generate leads based on customer profiles and booking habits. These leads can in turn be used by hotels in order to maximize bookings through pricing strategies, helping you to make decisions about your own marketing efforts.
The OTA in itself serves as advertising for your hotel, as many clients will use OTAs to do research and then book directly from the hotel itself. This billboard effect allows you to generate bookings without paying commissions. In this case it’s important to have a top-notch hotel booking engine capable of handling these direct bookings generated by the online travel agent.
How do online travel agents work?
Online Travel Agents work by making online bookings for their clients and charging a commission to the suppliers for making this booking. It’s important to understand that the fees you will pay will depend on the type of services you have contracted. Depending on the OTA you will either pay commissions after the customer pays, on a monthly basis or after the stay has been completed.
Commissions range depending on the size of the property and the services contracted, but typically cost between 10-30% of the amount paid by the customer. Sometimes hotels will pay higher fees if they want to be higher up on the rankings. For this reason, if you decide to work with OTAs, you should be mindful of the associated costs.
10 best OTAs to increase your hotel bookings
Now that we understand how OTAs can help increase your hotel bookings, let’s take a look at the 10 best OTAs.
Booking.com has positioned itself without a doubt as one of the musts for distribution. It is in fact one of the oldest online travel agents, starting in 1996. Nearly one million rooms are booked on a daily basis on Booking.com. One of the benefits of working with Booking.com, beyond tremendous visibility, is that hoteliers aren’t charged any fees to be listed. You only get charged if a booking is successfully completed.
Expedia.com also owns the below-mentioned Hotels.com. It is particularly popular for the North American market and in Asia. They have a reach of 25 million a year, and emphasize their marketing efforts on cheap and affordable accommodations.
Hotels.com, owned by Expedia, is particularly focused on repeat guests which is incentivized based on their rewards program. This program offers guests cheaper prices after booking 10 nights through hotels.com. The good news for hoteliers is that they will be automatically listed on both expedia and hotels.com, which is great for visibility.
Airbnb has evolved over the years since its inception as a way for travelers to connect with locals by staying in their house. Nowadays, Airbnb offers the chance for boutique hotels, and smaller properties to promote their hotels, because it has a preference for hotels that have a local connection and those that are unique.
Agoda is owned by booking.com and is particularly relevant in the Asian market. One of the benefits of Agoda for hoteliers is that they have on staff market managers who create specific location-specific marketing initiatives that help with visibility.
Tripadvisor started out as a review platform but now hoteliers can position their hotels on one of the most widely-consulted platforms for tourists worldwide. They work with other third-party OTAs like Expedia and Priceline.com.
Now a part of the Expedia group, Travelocity is one of the veteran OTAs on the market. It’s particularly popular for people in the United States, and their focus is towards package deals. It poses an interesting opportunity for hotels to list packages in order to boost bookings.
For hotels targeting the US market, Orbitz is a must. They are also a part of the Expedia Group, but it poses challenges for hoteliers because of its use of immediately redeemable loyalty rewards, thus reducing room rates. One of the upsides is that hotels who list on Orbitz will also be listed on expedia.com
Trip.com is an OTA out of China and is growing fast, thanks to being a member of the Booking Holdings group. Hoteliers wanting to target one of the fastest growing populations in the world should definitely list here. Trip.com is a big source of outbound tourism for China’s flourishing middle class. Currently they have 90 million active users.
E-dreams is very popular with the Spanish-speaking market. They are particularly focused towards offering Bed & Breakfasts, Hostels and apartments as well as 1-3 star Hotels. E-dreams has around 90,000 bookings per night and one of the reasons for the site’s popularity is because there are no maintenance costs or setup fees.
Now that we’ve understood how OTAs work, how they can boost your bookings, and looked at the 10 most popular ones on the market, you have more information when it comes to deciding about being present on these platforms. While the commissions can be steep, hoteliers can take advantage of OTAs’ large marketing budgets to increase their visibility worldwide and thereby boost bookings.
In order to boost bookings, hotels should both optimize rates and have a mix of distribution channels. By choosing your distribution channels wisely at the best prices, you can boost revenue and increase room bookings. Nonetheless, don’t underestimate the power of OTAs as they without a doubt present one of the most fundamental means for distribution.
8 May 2021
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