Wednesday, February 28, 2024

How to Change your OTA Mindset and Reduce Commission Costs

Digital marketing and guest services can diminish the impact of OTAs on travellers’ behaviour and your hotel’s financial results.

Online Travel Agencies (OTAs) are powerful marketing machines that provide hotels with online exposure and booking platform but take a lot of their income in the form of commissions. Most hotels bemoan their dominance and only a few (yet) have found truly efficient ways to keep the right balance between benefits and costs. Because frankly, OTAs don’t just take your money, they offer some great value in exchange.

So first stop playing the victim

As a place where most travellers start their research, OTA listings are worth some of your dollars. Since you can’t offer an alternative to a digital platform where one can easily find, compare and book accommodation in a particular location, you will have to use their services, like it or not. However, to leave it to intermediaries to fill most of your rooms and complain about high acquisition costs is pure nonsense. You can watch and weep hoping the court will ban rate parity clauses worldwide. Or you better focus on what will help you outsmart or at least stay level with OTAs.

Become a proactive digital marketer

Your goal is simple; to sell more rooms directly and build a strong relationship with your guests. And place only a limited inventory on intermediary websites to take benefit from the billboard effect with a reasonable ROI.

Omnichannel marketing is something OTAs are very good at. Once you land on their website they won’t let you go but pepper you with targeted messages wherever you move on the Internet. This is not rocket science but mostly small pieces of code and Google products that are quite simple to use. You can start a small campaign with a daily budget equal to the commission you pay for one room/night to see how it works.

User experience is a marketing tool, too. It sells your rooms and improves your SERP rankings. Make sure your website provides a good one by creating great room descriptions, compelling visual content, good value proposition and a clear, intuitive, booking process. Even better, don’t stop there but offer also extra services, change of booking options, gift vouchers.

Embrace digital guest-facing technology

It’s OK if guests find your property on a travel website. But it’s really bad if they visit your website and then go back to the OTA to book. If this happens you have failed to engage them or to make a better value proposition. Just ditching the rate parity rules is small thinking. People are used to get what they want with the touch of a button. They want modern ways to interact with you on multiple channels, to conveniently access your services online.

It’s not only OTAs where hotels lose in comparison

Let’s have a look at airlines, for example. Do they have the same problems with OTAs? Not precisely. But airline passengers book their flight online, rebook, checkin, pick a seat, even order special food. Online. From their mobile phone. Whenever they need to. The same level of digital availability applies to rentacar services, taxi, Starbucks … you name it. Arriving at most hotels these very same passengers sort of return to the past.

What digital services do you offer to your guests?

What, none? Or maybe online booking on your website? Are bookings easy to make, change or guarantee? Do you interact with your site visitors after they click the “book now” button to show them you care? How many of your services are instantly available for preview and reservation on your guests’ mobile phone? Do you talk to your guests after they leave? Because OTAs and other travel sectors offer many of these. Your guests live in the “Click to …” era. Are your assistance and services clickable? You better make them so or watch the money flow to intermediaries while you might be considered just a place to stay for the night with possibly available wifi, in the best case.

Decide whether to be an Innovator or a laggard

Pioneers are largely discussed. Imagine that you are the first hotel in your area to offer modern digital guest services. Everything from online checkin and room selection, through mobile room service orders and restaurant table bookings, up to secure payment and check out. Travellers are hungry for innovation in the hotel industry and likely to talk about it. You can add to the noise with a press release to boost your brand.

But the time to do it is today, if you want to win big. Tomorrow such services will be mainstream and you will be one of many. And even the most severe opponents will have to join in if they want to remain competitive. You chose whether to be an innovator or a laggard.


It’s easy to say that OTAs have a vast and unattainable power. It’s easy to find excuses. Playing the victim is like paralysis it won’t let you move and change the status quo. So you better focus on how to minimize the influence of OTAs on your business instead. Build or rebuild your website with emphasis on the user experience. Sharpen your brand message. Spend more on remarketing and less on commissions. Give your customers a reason to book directly and stay loyal to you because of your excellent service. Use available channels and modern technology to add value to your traditional hospitality. It’s not that hard but you have to try it to believe it.

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