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How and why hotels should combat OTAs?

OTAs allow travellers great ease to search for the place they wish to stay based on price, quality or available commodities, but the hotels that use them pay a steep price.

Background

The main perk of OTAs is the ease with which they allow travellers to search for their place of stay based on price, quality or available commodities. The hotels that use them, however, pay a steep price. Not only are they forced to pay over a dozen percent of commission to the agencies, but also rarely receive the data used for booking, such as email addresses. What should one do in order to become significantly more independent from this kind of services?

The Challenges

One of the major problems with using OTAs is the fact that they do not provide email addresses of people who book the rooms. It hurts the hotels by making it virtually impossible for them to conduct direct marketing communication, which aims to encourage the Guests to come back and book a stay through its own booking engine, thus bypassing the OTA.

Of course, the addresses can be gathered physically, e.g. by using a form at the reception. It is, however, troublesome for both the staff and the visitors, thus making a bad impression. Writing the emails down might also result in spelling mistakes. Our studies show that an average hotel is able to properly identify only 15% of its Guests by email.

The Social WiFi Solution

Utilising Social WiFi allows to gather the addresses the moment the user connects to the WiFi network. Access to the internet is one of the most important conditions while booking a room (and bad connection can be extremely problematic), while as many as 50 to 90% of hotel Guests use WiFi during their stay. It can be expected that the effectiveness of email gathering will increase even by as much as several hundred percent.

The service also allows to better get to know the visitors by using social media login. This feature makes it possible to set target groups based on information such as age, sex, or the amount of visits that has occurred so far in the venue.

This sort of data enables the ability to send personalised offers that will encourage the guests to come back and increase the satisfaction of their from the stay. This might be accomplished by using coupons, vouchers, or additional information about latest promotions.

15%

typical minimum OTA commission

21.4%

average OTA commission in 2019

30%

typical top end OTA commission

In action

For example, a hotel can offer a discount to a Spa salon located on the premise if the person books a room directly through the venue’s website. Not only does it build customer loyalty, but also allows to avoid the provision caused by OTA.

Other possibilities are to utilize internet services such as Google AdWords, or to optimise your website so that it appears as high as possible in the search results. This will greatly improve the number of people who reach the hotel’s website, resulting in more reservations. Remarketing codes of services such as Google or Facebook use cookies in order to make it possible to display the venue’s ads to the user even while he’s browsing other sites, thus encouraging him to revisit the page.

Finally, there is always the good old way of offering loyalty programs, for example in form of points that can only be acquired while using the hotel’s website. Afterwards, they might be exchanged for various benefits and commodities.

Regardless of which method is used, the hotel industry needs to attempt to minimize the number of reservations completed from OTAs if they want to avoid unnecessary costs. Current technology allows to promote the venues and encourage the Guests to come back in multiple ways that should not be neglected.

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