If a customer finds a better deal on the website of an online travel agent than a hotel’s own direct channel then something is wrong, writes Ritesh Gupta

Six months ago, Ricky Ang, VP of sales and marketing at Hotel Equatorial Group tried to book a hotel in Hong Kong via the brand’s own website. In the end, however, he made his reservation through an online travel agent. Why? Because the deal on offer via the OTA site could not be matched or bettered by the hotel.

Ang is not alone. Richard Lewis, chief executive at Interchange & Consort Hotels, Best Western and Beacon Purchasing had a similar experience when the GM of a well-known chain said he would be better off making a reservation with their OTA partner because the systems weren’t aligned.

This leaves hoteliers asking: should we just throw in the towel and focus our energy on driving business from indirect channels. Quite possibly if you consider these two observations from Ang:

• Two to three of the dominant OTAs produce significant booking volumes for any one hotel, so the competition between these players is tough
• The top producing OTA is generating close to, if not more than, the volume generated directly from the hotel brand site.

So if the OTAs themselves are competing so aggressively, then what chance do hotels stand? Ang admits that hotels are giving up because they simply cannot ignore the sheer volume of bookings that OTAs generate.

“Today hotels are fighting to get a bigger share of an OTA’s volume rather than a bigger share of the overall consumer market through the hotel’s own brand site,” he says.

In this environment, hotels, and especially smaller fry, simply cannot compete with OTAs that offer multiple hotel products in multiple destinations. Moreover, with this leverage the OTAs can push for better and more exclusive deals from hotels – sometimes at the expense of what appears on the hotels own brand site.

“Consumers unfortunately are educated fairly quickly and so lose confidence in a hotel's direct booking portal. It’s a sad fact,” says Ang.

The fight back

That said, hotels can – and must - take steps to build a more balanced distribution strategy. They can:

1. Offer value: For starters, when it comes to direct distribution hotels can bundle deals at a higher price (so as not to break parity rules) than a typical best-available rate but include some highly sought after options like transfers, meals or a room upgrade.

2. Spring a surprise: Hotels still can, and do, own the experience. So now is the time to use analytics to come up with special offers that are based on browsing behaviour or, if it’s a loyal guest, on previous preferences or interests. If a guest is a tennis enthusiast, for example, why not offer a package relating to a tournament like Wimbledon throwing in special coupons for strawberries and cream at the hotel. “Hotels should work on providing unique offers and customisation that OTAs simply cannot with because of their sheer size,” says Ang.

3. Do it in real-time: Hotels need to sharpen their real-time functionality to optimise each revenue opportunity across every channel. So if a guest is checking in via mobile, be sure to offer a room upgrade at the right time, or remind them to book a spa appointment or meal in the restaurant.   

4. Use metasearch to capitalise on traffic generation: Metasearch sites continue grow and can help to play the OTAs at their own game. As Max Starkov, president and CEO at HeBS Digital points out, meta-search is “an online advertising format that requires real-time room availability and a pricing feed” and can play a vital part in driving traffic to the direct online channel.

Additional reporting: Pamela Whitby