The Role of OTAs in Modern Hospitality for Hotel Owners

In an era where a simple click can determine the fate of your hotel’s occupancy rate, getting to grips with Online Travel Agencies (OTAs) has become essential. These digital platforms are not just trends; they are at the forefront of how guests discover and book their stays. 

As a hotel owner, you know the value of direct relationships with your guests, but OTAs offer a bridge to wider audiences you might not reach otherwise. 

Gone are the days when traditional marketing and word-of-mouth were the sole drivers of hotel bookings. Today, the digital marketplace commands attention, making online booking systems essential in the hospitality industry.

In this blog, we’ll share insights on how you can make OTAs work for you, enhancing your visibility and attracting more guests, all while keeping the personal touch that sets your property apart. 

Whether you’re just starting to explore the digital landscape or looking to refine your existing strategy, this guide is tailored for hoteliers who value both tradition and innovation.

What is an OTA?

An Online Travel Agency (OTA) is a digital platform that connects travelers with various travel services, including hotels, flights, car rentals, tours, and cruises. It allows customers to compare and book their travel needs easily and efficiently in one place.

OTAs are advantageous for both travelers and hoteliers. For travelers, they offer the convenience of comparing prices, reviews, and amenities across various providers in a user-friendly format. 

For hoteliers, OTAs provide a centralized marketplace to showcase their properties to a vast audience, potentially beyond the reach of their own marketing efforts. 

These platforms assist in marketing and selling hotel rooms, managing bookings, and offering insights into market trends, helping hoteliers optimize their pricing and occupancy. 

In essence, OTAs serve as a valuable partner for hotels looking to expand their customer base and increase revenue through a broader online presence.

How Do Online Travel Agencies Work for Hotels?

Online travel agencies typically work by partnering with individual hotels and lodging facilities to list their rooms and amenities on their platform. 

The OTA will display a list of available properties that it connects with so the traveler can easily research and compare their options. This enables travelers to compare easily and book accommodations that meet their specific needs. 

In return for providing this service, hotels pay a commission fee to these platforms for each booking received through them. OTA rates and pricing vary between platforms, with commissions ranging from approximately 3% to 25%. 

This offers travelers a convenient way to find activities in the area they’re visiting without having to spend a lot of time on research.

Typically, platforms provide several filters to assist users in narrowing their searches to find exactly what they’re looking for. While cost is a major consideration for many, there are also a variety of other criteria that can be applied, including:

• On-site parking at no extra charge
• Accommodations that welcome pets
• An on-site fitness center
• Rooms equipped with kitchen amenities
• Shuttle service to the airport
• Availability of rooms for meetings
• Locations near a central business district (CBD)

What is The Difference Between a Metasearch Engine And OTAs?

Metasearch engines and Online Travel Agencies (OTAs) serve distinct roles in the travel booking process. Metasearch engines compile information from a variety of websites, including OTAs, allowing users to compare prices and find the best deals across different platforms. 

Unlike OTAs, metasearch sites traditionally do not offer booking capabilities; rather, they function as advertising platforms that showcase this information.

In contrast, OTAs provide a direct booking service where travelers can reserve flights, hotels, and additional travel services. The primary distinction lies in the functionality: metasearch engines are for comparison, while OTAs are for booking.

Notably, some metasearch engines have evolved to offer booking capabilities directly from their search results, blurring the lines between them and OTAs. 

Examples of such platforms include:

‣Google Hotel Ads

‣ TripAdvisor

‣ Trivago

‣ Skyscanner

‣ Kayak

What Benefits Come With Using Online Travel Agencies in Travel? 

1. Increased Exposure and Global Reach

The foremost benefit of listing your hotel on Online Travel Agencies (OTAs) is the significantly enhanced visibility and accessibility it offers to a global audience. 

By featuring your property on platforms like Booking.com, Expedia, and Airbnb, which collectively cater to millions of potential guests worldwide, you are not only increasing the awareness of your hotel but also positioning it as an attractive accommodation choice for a diverse group of travelers. 

This includes individuals who might not have found your hotel through traditional direct booking channels, thus broadening your potential customer base and increasing opportunities for bookings from across the globe.

2. Increased direct traffic

By clicking on your ad, travelers are directly led to your hotel’s booking platform. If your booking engine supports it, they have the opportunity to book immediately, eliminating the need for any third-party involvement.

3. Market Insights and Data Analysis

By tapping into data and insights from Online Travel Agencies (OTAs), you can get a sneak peek into the dynamics of the travel market, revealing what travelers prefer and how other hotels are positioning themselves. Utilizing this information can aid hotels in crafting more effective pricing and marketing strategies, ultimately leading to a more nuanced understanding of their clientele’s behavior and preferences.

4. Risk Reduction in Cancellations 

Many OTAs offer cancellation policies that can reduce the risk and burden of last-minute cancellations on hotels. They handle the process and sometimes fill the vacancy quickly, minimizing potential revenue loss for the hotel.

5. Seasonal Demand Capture

OTAs excel in capturing seasonal demand spikes due to their broad reach and marketing capabilities. Hotels can leverage these platforms to promote special deals, packages, and last-minute offers to fill rooms during peak seasons and minimize vacancy during off-peak times.

6. Feedback and Reputation Management

Customer reviews on OTAs can provide valuable feedback for hotels to improve their services and facilities. Plus, a strong rating on an OTA can enhance a hotel’s reputation, attracting more bookings and allowing for potential rate premiums based on perceived value.

How to Choose The Best OTAs For Your Hotel

Choosing the best Online Travel Agency (OTA) for your hotel isn’t a one-size-fits-all decision. It’s a strategic move tailored to your unique needs and the specific objectives you’re aiming to achieve for your hotel business. Things to consider when choosing an OTA partner:

• Your Local Market: Identify channels that excel in driving bookings to your region, focusing on those with a strong presence in your country or destination.
• Your Product: Look for platforms specializing in promoting luxury properties or small boutique properties if that aligns with your offerings.
• Your Ideal Target Market: Aim to partner OTA platforms that are popular and favored by most travelers for bookings. These platforms should attract high-value guests who visit your location and tend to spend more during their stay.
• Your Offerings: Consider channels that are particularly effective for advertising packages, last-minute deals, and other unique promotions.
• Your budget: Can you afford the platform’s fees?
• Your Strategy: Balance the number of bookings you aim to achieve through online travel agencies with those you plan to secure via direct channels, like your website and social media.

Tips for Working with Online Travel Agencies

1. Diversify

Traveler behaviour, motivations, and preferences are changing all the time, so it’s helpful to have a mix of channels to capture the largest audience possible.

2. Reputation and promotions

Travelers favor online travel agencies because of the convenience of offering everything in one place – from searching and comparing accommodation prices to finding special deals and reading reviews. It’s essential to pay attention to refining all elements of your online presence.

3. Use a Channel Manager

Implementing a channel manager becomes vital when managing a handful of OTA connections to avoid the complications of data discrepancies and the risk of double bookings. Without such a tool, efficiently handling these connections is virtually unattainable.

4. Targeting a more defined audience: 

While this approach might trim down the crowd you’re addressing, the precision of focusing on certain events, time periods, or geographical areas increases your odds of locking in those coveted bookings. It’s about quality over quantity, capturing the right eyes rather than all eyes.

5. Engage with online feedback proactively

Remember, every online review is a golden opportunity. Don’t just monitor reviews on online travel agencies (OTAs); actively engage with them. Each review is a spotlight moment where your response can impress countless potential guests. By thoughtfully addressing feedback, you signal to everyone that your hotel values guest experiences and is committed to excellence. Treat reviews as the invaluable feedback forum they are, and watch your hotel’s reputation and bookings grow.

Increase Your Property’s Bookings and Profits with an OTA Channel Manager

While OTAs are a fantastic platform for increasing your hotel’s visibility and bookings, keeping track of multiple listings, rates, and availability can quickly become overwhelming. But there’s a solution: using a channel manager. A channel manager can streamline the process by allowing you to update your information across all OTAs from a single interface. 

This not only saves you time but also significantly reduces the risk of overbookings and inconsistencies in your listings, ensuring a smooth experience for both you and your guests.

Here’s why RoomRaccoon’s channel manager is an indispensable tool for hotels partnering with OTAs

1. Real-time synchronization of availability

Managing hotel bookings can feel like juggling; one slip, and you’re facing overbookings and unhappy guests. RoomRaccoon offers a swift solution with our channel manager that syncs your availability across OTAs in just 5 seconds, instantly refreshing your hotel’s availability across all OTAs the moment a booking is made. Imagine updating your room’s status before you can even refresh your browser.

This tool not only tackles the overbooking dilemma head-on but also streamlines managing your hotel’s details, all from a single dashboard.

2.  Improved revenue management

RoomRaccoon’s channel manager simplifies rate management across OTAs by ensuring consistent pricing and automating rate adjustments based on your pricing rules. It allows you to control pricing, manage room availability, set seasonal rates, apply discounts, and enforce booking conditions like minimum stays easily.

You can easily set different room rates for various times of the year, adjust prices based on how many rooms are booked, and offer special discounts. Plus, you have the flexibility to manage how many rooms are available and set rules like requiring guests to stay a minimum number of nights during busy seasons.

Just ensure your property management system (PMS), channel manager, and online travel agency (OTA) information are all correct to show your latest room prices and availability online. This flexibility helps in maximizing your revenue and ensuring that your pricing is always competitive.

3. Expand your reach with automated channel management

Time is of the essence when managing sales channels manually, often leading to missed opportunities. With an automated channel manager like RoomRaccoon, you can efficiently widen your distribution strategy to include a greater number of sales channels. This strategy not only attracts more potential guests but also significantly increases your direct and indirect bookings.

4. PMS compatibility

When choosing a channel manager for your property, it’s important to consider the compatibility with your property management system (PMS). If you use a single channel manager, you need to ensure that your chosen PMS is capable of synchronizing data between the two systems. This allows for the automatic transfer of reservation and guest information from your channel manager to your PMS.

5. Reporting

Navigating OTA’s with a channel manager is a smart move, but the real game-changer is diving into the data it offers. By presenting necessary data in an easily digestible format, RoomRaccoon reporting ensures that you have all the insights you need at your fingertips. This comprehensive dashboard does more than compile data; it analyzes guest behavior and preferences, booking trends, and channel performance, translating complex data sets into actionable insights. It’s the smart way to refine your hotel’s approach, ensuring you’re not just competing but leading.

Wrapping Up

In sum, think of OTAs as your hotel’s digital megaphone. They amplify your hotel presence, helping travelers find you more easily.

For hoteliers, the strategic use of OTAs is not just about broadening the booking funnel—it’s about smartly positioning your property in the right digital spaces to capture the attention of a global audience. Remember, the goal is not to replace direct bookings but to complement them, using OTAs as a tool to boost visibility and, ultimately, profitability.

As we move forward, the savvy hotelier will see OTAs not as competitors but as valuable allies in the quest for increased revenue and guest satisfaction.