Should you be using an OTA?

Q:I keep getting mixed messages about online bookings; should I offer them on my website, should I go with a dedicated OTA, or should I even bother at all?

A: We’re all a little bit sick of hearing about the recession and whilst it has been a negative time for many, it has also been instrumental in reshaping and redefining the hospitality industry in recent years. Not only are we seeing chains expanding more than ever before, boutique and unique hotel experiences have also been given an opportunity to thrive, ‘staycations’ have become fashionable again, short breaks are de rigueur, online travel / booking agents have boomed on a model of commission, and peer reviews have become the go-to advisory resource.

We are working and operating in a completely different industry to the one we were in ten or even five years ago, but these changes also bring an opportunity for you to exploit.When it comes to online bookings, there are a variety of options that you can choose from:

• A membership with online travel or booking agents can facilitate online bookings for a commission-based fee, at the same time promising to deliver new customers through their national and often international marketing campaigns. They spend a lot on their search engine optimisation and that’s why you hear the complaints that their listing for your hotel appears above your actual website. They are great for driving new business, but can be an expensive choice if you haven’t exhausted other business opportunities first
• Online booking widgets which offer you a subscription-based service to embed the widget in your website, thereby facilitating online bookings direct to you, but using a ready-made service. The benefit of these services is that costs are fixed and not dependent on the number of bookings you take, plus they’re really easy to embed. On the downside, costs are ongoing and will exist unless you decide to stop online bookings, so you need to account for the overhead
• A self-built system specified to your exact number of rooms and requirements and synced to your reception diary. This will need to be built by a web developer with an understanding of CRMs and APIs and will have the biggest up-front cost, but once you’ve paid for it, it will have no ongoing overheads. What this does mean is that you own the system and aren’t at risk of rising prices or commissions

The only other option that you have is to ignore online bookings completely and offer traditional phone or email bookings only. The risk with this is that you miss out on bookings that you could otherwise have gained, simply by not offering enough choice and variety to users, particularly out-of-hours.

According to a Travel & Tourism Survey by the MHA, only 26% of hospitality businesses offer online bookings, yet of those businesses that do, 50% reported a year-on-year increase in direct online bookings. What I haven’t yet been able to do is quantify these survey results specifically for the UK, identifying what exactly this may mean for you in true financial terms, however internationally, almost 150 million bookings are made for travel each year, and just over 65% are made on the brand website for hotels or service providers, with just 19.5% made through merchant sites like Hotels.com and Expedia. 65% of bookings is a pretty big incentive to consider adding an online booking service.

Just like I said with last month’s article on mobile optimisation of your website, the ultimate choice will come down to you and should be dependent on your overall performance statistics and strategy. If an online booking service like booking.com is your automatic go-to and you don’t put much store in your own website, then direct online bookings won’t be your thing. If however you are working to build your online reputation and reviews and want to gain recognition, loyalty and word of mouth referrals, then your need for an online booking system will be much higher!

One final point that I should add is that it is entirely possible for you to ‘mix and match’ the services, introducing a booking agent as well as an online booking portal. If you do, make sure you track where visitors book from, ensuring that you can measure and monitor the profitability of each booking, both through the room and through the added value items like the restaurant and the bar. This information will soon tell you what is valuable to your business and what is not!

This feature first appeared in the July 2015 issue of Hotel Owner.