Since the dawn of Internet hotel room sales, online travel agencies have been the entities that hotels love to hate. But the relationship between hotels and OTAs doesn’t always have to be costly or contentious.
With a little more planning, research and help from channel management specialists and commission payment and recovery services specialists, hotels can improve their standing − literally and figuratively − with OTAs while reducing their costs and increasing revenues.
Here are five tips for getting the most out of your relationships with OTAs:
Know Their Algorithms
Mastering the nuance of an OTAs algorithm ensures you are getting top billing. Recently, Expedia Inc. revealed some of its secrets in an article by Melissa Maher, Global Partner Group senior vice president. Maher said the company’s algorithms are designed to push the hotels with the highest conversion rate, which is the rate at which consumers book a hotel per times viewed. So what algorithms push properties to the top of the pile? Popularity, quality and, of course, strength of the hotel’s offer. Most of the factors here are straightforward, but one important detail is historical average daily rate, or the price customers normally pay for the property on Expedia. “$100 for a hotel that normally goes for $200 is better than $100 for a hotel that normally goes for $98,” Maher said.
Maintain Rate Parity
OTAs, like any travel seller, want to ensure their customers aren’t going to find a better deal somewhere else. This is where a channel manager can help by making sure you aren’t offering a $99 rate on one channel, $110 on another and $50 somewhere else. Yes, rates fluctuate constantly and for a variety of reasons and across markets. The channel manager can make sure your rates are consistent, helping you avoid friction with OTAs that might otherwise have to field backlash from unhappy consumers.
Monitor Your Content
Many OTAs have standard content fields for hotels. But they are working to allow more complex content and packaging capabilities, which will make it even more important for hotels to regularly monitor their property descriptions and make changes to stay current. If you can’t monitor your content on OTA sites frequently, avoid listing times, descriptions and photos that might require frequent updates. Also, when choosing channel partners, make sure you know the process for making content changes. Sometimes hotels can change property descriptions via the extranet. Other times, they must send the OTA an email to make changes, meaning there will likely be a lag in seeing the update.
Manage Your Inventory
One of the main sources of friction between OTAs and hotels is over control of room inventory. The last thing most hoteliers want to do is give OTAs carte blanche to fill their rooms at a 20 percent commission rate. Once again, channel managers can offer valuable services that enable hotels to better analyze the market and allocate the right mix of rooms across their travel distributors.
Pay OTAs Fairly and on Time
Nothing says “respect” like a timely and accurate commission payment. As in any business, your best partners are happy partners. Just like in the brick-and-mortar world, online agencies are going to promote the properties that pay accurately and on time. It is important to provide the correct data along with your payment so an OTA can reconcile your payment to the booking. That’s why third-party payment processing services, such as those offered by Onyx CenterSource, are key to getting the most from your relationship with OTAs.