What is an Online Travel Agency (OTA)?

Why OTAs Matter for Property Managers?

Now that you know the OTAs meaning, it’s time to see how and why these entities matter for your hospitality brand (if you’re a property manager).

• Huge global exposure and visibility of the property, unlike most other marketing and booking channels.
• You can automatically reach out to innumerable travellers in your targeted categories with suitable listings.
• Increase positive online reviews by resolving issues before they impact ratings.
• Booking volumes automatically increase, while these platforms also give you several marketing tools to plan offers, discounts and other promotional strategies.

How OTAs Work

These digital travel agencies have a specific functional model that you should know more about.

1. You can visit the OTA platform and use the given options to enter your travel dates and filter your preferences.
2. You will then see a list of suitable properties/booking choices as per your specific needs.
3. Once you compare them, you can complete your booking directly from the OTAs travel site itself.
4. You will receive booking confirmation via email/mobile and can manage/modify/track the same through the OTA platform without any hassles.

OTA Fees and Commissions

How much do online travel agents charge? The usual commission structure is around 10-30% of the booking value. Yet, the final percentage depends on multiple factors:

• Type of OTA (niche players may charge lower between 4-10%) Property location, size, type
• Any distribution, marketing and promotional activities from the OTA
• Hotels may also have to pay payment processing charges to OTAs along with taxes on commissions, if applicable
• Some platforms may also charge for special promotional/marketing packages including higher search result placement, email marketing, etc.

Now how do these OTAs generate their revenue? Here are some revenue streams:

• Booking fees/commissions
• Payment processing fees
• Online advertising revenues
• Fees for marketing and promotional packages

In the merchant model, the OTA takes payments from guests and then pays hotels when guests check out. There are contracts between hotels to offer rooms at a better rate to these platforms. In the commission/agency model, the customer pays the hotel directly, but books via the OTA. The hotel pays the latter a commission on the booking value post checkout. Another model is the advertising model for metasearch engines like Trivago, TripAdvisor, Google Hotel Ads, etc. Here, hotels can promote themselves with direct booking engine links, while paying fees based on the number of clicks that they get.

Benefits of Using OTAs

Here are some of the biggest benefits of OTAs that you should note:

• Higher visibility for your property globally as opposed to regular sites/platforms. This naturally brings in more bookings.
• Most of these platforms are highly reputed, with huge client bases. If you were thinking, what is the most popular OTA, then the list is never-ending. Top choices include Expedia, Airbnb, Booking.com, TripAdvisor, Google Hotel Ads and plenty more. These naturally give you a leg-up on your competitors if you can manage to list here.
• You can always keep attracting new guests with OTA listings, since they not only reach your target segments, but also broaden your exposure. You can tap wider guest bases and tap marketing tools to enhance visibility further.
• OTAs have a noticeable effect in terms of guest booking behaviour and demographics. You will get invaluable feedback and analytics that will help you tailor your offerings as per guest needs. Simultaneously, if you’re listed on a reputable OTA, then it’s more likely that a potential customer will favour your property over others in a particular location.

Challenges of OTAs

Even though the list of OTAs includes some of the world’s biggest travel and tourism brands, there are still a few challenges worth noting. They include:

• Your per-booking profit percentage will be lower, owing to high commission costs and fees. Payment processing fees and taxes on commissions also add up to a significant amount.
• You don’t build direct relationships with your guests. You are dependent upon the OTA for guest inputs, feedback and reviews. This limits your ability to personalise experiences and build long-lasting guest loyalty. You don’t communicate directly with the guest until he/she arrives at the property and even afterwards in most cases.
• Operating through a third-party or platform may have a long-term impact on your brand loyalty and overall brand- building. You will run the risk of depending heavily on these platforms for all your bookings. Their algorithms do have an impact on overall ranking and visibility, so you’ll have no choice but to keep playing by their listing parameters.

Strategies for Optimising OTA Performance

Here are a few ways in which you can boost the performance of your listings on online travel agencies.

• Continuous Optimisation- Make sure you keep reviewing all your listings for consistent and updated information. They should always be fresh and in sync with new tools and features provided by OTA sites. Keep adapting and reviewing listings to boost performance.
• Listing Content Checks- Be careful while creating content for your OTA listing. Check available photos and make sure that visuals are of the highest possible quality. Be concise, clear and accurate with your descriptions and other matter. Simultaneously, set competitive/fair rates and ensure that they’re consistent across multiple platforms.
• Standing Out- It seems tough, standing out from the crowd on these platforms, right? You’ll have to be a pro at regularly updating listings, creating compelling descriptions and optimisation with localised keywords. Other tips to stand out include prompt responses to reviews, offering pay-at-hotel features, free cancellation policies, both non-refundable and refundable choices and more room options. Of course, innovative promotions and great ratings automatically help you stand out on these platforms with ease.

Managing Multiple OTAs with Channel Managers

Agreed, if you’re listing on multiple OTAs, then it can be a tough task to manage them all efficiently. This is where you need channel managers in place for your property. They are your defence against double bookings/overbooking and even data errors. OTA channel managers will help you get more bookings and revenues in the long run, especially if you have widespread integration across multiple platforms.

In this context, aPerfectStay’s Channel Manager stands out as a great option for OTA management. Here are some of its key features:

• Easy integration with 30+ OTA platforms (enables more reach and wider potential audiences)
• Real-time updates for hotel room availability and rates across all your platforms
• No overbookings or outdated data with easy multiplatform synchronisation. Your rates and availability will be consistent on your website, online booking platforms, social media and more.
• You can maintain price parity on all your channels to build more customer trust.
• You can also expect seamless rate management, performance analytics and channel mapping for maximum performance and productivity.

OTA Promotions and Discounts

You can use various OTA marketing tools to attract more guests to your property. Here are a few strategies worth considering:

• Schedule promotions for both the lean and peak seasons on these platforms. Offer early booking and last-minute deals/discounts along with special bundled packages
• Create exclusive offers for particular OTAs and set up promotion codes for booking engines
• Leverage sponsored listings and other OTA marketing tools for boosting visibility, while taking part in the promotional campaigns of these platforms for better results
• Make sure your pricing is in sync with or better than your nearest rivals in your location. Build your pricing strategy based on analytics of industry trends, earlier booking data and present booking information

Balancing OTAs and Direct Bookings

While online travel agencies are indispensable for every hotel brand today, don’t rule out direct bookings completely. They should also be a part of your distribution and marketing strategy. In fact, you should aim to strike a balance between OTA platforms and direct bookings in order to lower dependency on the former.

Direct bookings help you earn more profits on each booking (since there are no commissions involved), while you also connect with the customer (instead of going through a third-party platform). It can help you personalise experiences, build brand loyalty and offer tailored packages for customers.

Here’s how you can boost direct booking growth:

• Build an easily navigable and user-friendly site that is responsive across all devices
• Offer website-only discounts, room upgrades and flexible cancellation policies
• Build a database of guests and followers for targeted email marketing and promotions
• Use a booking engine with currency and language convertors, smart pricing and multiple payment methods
• Offer prompt customer support on social media, chat or email.

You can also consider integrating aPerfectStay Booking Engine for your direct reservations. This online channel manager syncs multichannel bookings onto the dedicated PMS. Manage pricing and availability, while updating them in real-time. You can also integrate with 30+ OTAs while taking care of billing, operations, reservations, and maintenance in one consolidated interface.

Evolving Trends in OTA Usage

Here are some of the biggest trends worth noting in this sector:

• Last-minute stays and mobile bookings have grown exponentially in the last few years.
• 52% of travellers are using mobile devices to find hotel-related information as per reports.
• Also, 44% and 56% of leisure and business travellers in the US reportedly book at the last minute (it is the same story globally).
• 50% of travellers booking via mobile devices do so for next-day or last-minute stays. 72% of reservations via OTA sites or apps take place within a day of the stay.

Here’s what the future will hold for OTAs:

• Higher emphasis on personalisation for travellers, including local recommendations to drive bookings. This will be done via AI and data analytics. Guests will get hotel suggestions based on past bookings, deals as per their budgets, etc.
• Many of these platforms will offer app-only exclusive deals in the future.
• Real-time inventory updates and dynamic pricing are also set to be a future trend.
• More guests will want eco-friendly and sustainable accommodation choices across alternative segments like vacation rentals, tree-houses, boutique properties, etc.
• Social media integration will be a major tool for OTA platforms, including campaigns, user-generated content, and more.
• Another trend could be the integration of more flexible payment choices (buy now pay later) and instalment options.
• Voice searches, smart assistants/concierges and AI-backed 24-7 customer support through Chatbots are also on the anvil.

OTA Alternatives

It’s not just popular OTAs that you can consider. Some alternative options also include the following:

• Google Hotel Ads- This is what the industry calls a metasearch engine. It enables hotels to promote availability and prices on the platform. GHA comes in search results on Google, Google Travel, Google Assistant and Google Maps. It boosts online visibility and drives direct reservations, while enabling easy room rate comparison for guests. Google also works out the search terms for which to show GHA, unlike Google Search Ads.
• Social Media- It is a powerful and effective tool for hotels in terms of connecting with target consumers, building brand awareness and engaging more with guests. Loyalty discount campaigns or initial offers are handy, along with leveraging platforms like Instagram, Facebook, Twitter and LinkedIn. Contests, user-generated content, giveaways, influencer marketing and online reputation management (for social media reviews) are good ways to gradually accelerate your social media marketing efforts.

How aPerfectStay Tools Can Help Diversify Your Booking Channels

If you want a win-win situation where you manage all your OTAs and drive direct bookings simultaneously, consider aPerfectStay for this purpose. It has diverse tools like aPerfectSuite, aPerfectPMS, aChannel Manager, aPerfect Concierge and aPerfect Docs. You can take operations and reservations into the digital realm with customisable platforms.

aPerfect PMS, for example, fuses property management systems and guest apps to boost operations. You can easily manage day-to-day serviced apartment/hotel functions, housekeeping, reservations, maintenance, reporting and billing in one consolidated interface. Get custom reports and create guest profiles for tailoring experiences.

You can also depend on aPerfect Channel Manager for syncing multichannel bookings to the PMS. Update and manage pricing and availability in real-time while integrating with 30+ globally-acknowledged OTAs (TheSqua.re, Booking.com, Airbnb, etc.). Other features include integration with Google Hotel Ads, personal data and credit card tokenisation and multiplatform/distribution channel synchronisation.