By Larry Mogelonsky, MBA, P. Eng. (www.lma.ca)
If you’ve been following my writing over the years, you’re well aware that I’m not a fan of the OTAs. They are strong marketers, and exceptionally well run. Now that the ‘book direct’ war cry has caught on with some of the major chains such as Hilton and Marriott, it’s time to reinvestigate what actions you can take.
In a way, I’m awed by the OTAs’ clout. But, nothing personal, I see their business model as contrary to many hospitality organization’s long-term goals. Three key arguments I’ve inculcated are margin erosion, commoditization and brand dilution. To sum them all up in a neat bow: the design of an OTA website subliminally conditions a user to search for the cheapest room available and not to take into consideration the unique qualities of each particular hotel brand.
Although the OTAs extol the fact that they are taking on a big chunk of the marketing burden on behalf of hotels, this does not negate the often-gigantic commissions they command, nor does it remedy the psychological effects of becoming accustomed to using one website for all hotel queries instead of visiting branded pages. After awhile, hotel customers who utilize the OTAs for research and bookings become the OTAs’ customers, not yours.
Spouting hellfire and brimstone like this, however, is not productive. The OTAs are here to stay, so we have to learn to work with them. Now that rate parity laws are beginning to show their cracks (and indeed repeals are well underway in some EU countries), it seems like the perfect time to lay down a few of my OTA strategies that I’ve led discussions about in the past.
1. Conversion Through Education. A fair share of OTA customers simply don’t know the advantages of booking direct. The re-education process begins online from the moment you identify an OTA customer that has made a reservation. If you can send them promotional emails prior to check-in, try and find out a bit more about what they are looking for in a hotel (that is, get data on them) and also explicitly state the advantages of booking direct next time, such as loyalty points and complimentary upgrades. Once they are onsite, your staff should be specially trained to prompt this topic through conversation and also try to get these customers to sign up for the newsletter. And importantly, make sure your front desk team captures their email data.
2. Reputation Management. Part of my stink against the OTAs has to do with how the websites display properties. When each hotel is shown in roughly the same page layout with the same colors/fonts, there is very little to visually distinguish one from the other. To mitigate this, ensure that you own your pages and that you keep the property descriptions crisp and brief while uploading the best possible photography. While layout uniformity is an issue, one clear advantage of the OTAs (and other third-party travel websites, meta-search or social networks) is their review systems. Respond to every criticism in a timely, professional manner and act on the issues addressed – other users will judge you on how you react.
3. Get Around Rate Parity. Even though this may not be an issue in five years time, it is right now for most of us, so we may as well deal with it (at least until it’s time to renegotiate these contracts). If you can’t compete with the OTAs on price, then offer your guests clear incentives for booking direct. At the most basic level, these perks can include access to fast or premium-tiered WiFi, F&B vouchers, complimentary bar beverages, or free amenity trials.
4. Disruptive Technology. While I’m not going to mention any specific names, rest assured the OTA dilemma is not something privy only to managers within the hotel ranks. There are quite a few companies working to solve our problems for us, whether it’s through image-rich, pay-for-performance apps or advanced algorithms that target the right consumers and personalize each marketing message for maximum conversion. Read the trades, attend trade shows and always be on the lookout for ‘the next big thing’.
5. A Great Guest Experience. The OTA websites are designed to favor location, price and date searches over specific properties. However, once a guest is onsite, you have to work hard to impress them and demonstrate why your hotel is unique so that they will indeed remember you for a return trip (and likely to book direct for this revisit) and spread your name through online praise and word of mouth. If you have friendly staff with impeccable service delivery and you wholly fulfill the modern demand for a local authentic experience, then I see no reason why more and more customers won’t go to you direct.
Just keep in mind, when OTA customers enter your property…
They are your guests, but they aren’t your customers…
And they don’t know that they are not your customers!
_______________
This article may not be reproduced without the expressed permission of the author.
Editors note: To discuss business challenges or to discuss speaking engagements please contact Larry directly.
