How should hotels work with Online Travel Agencies?
Travel Tripper believes hotels should always drive as much business as possible to their direct web site and booking engine. This channel is by far your most cost-effective, and it presents the hotel the best opportunity for you to connect your brand message to your guests. Many consumers, however, prefer to evaluate hotels across brands and hence shop on a site such as Expedia, Travelocity, Orbitz, or Booking.com (to name a few). These sites can bring large numbers of new and returning guests to your hotel, and we recommend you do not foresake this great source of business.
OTA business practices
Many of the OTAs have instituted preferred rate programs with hotels that operate on net rate (or merchant) model. This model is nothing new, as traditional tour operators have been using a net rate model for many years. Furthermore, products in most industries outside travel are sold via net rates – where each company in the distribution chain marks up the cost of the product to a sales price it offers to its customer. The merchant model is not inherently good or bad, it is simply a different way of doing business from the retail/commission model that hoteliers are accustomed to from traditional travel agents.
Costs & Benefits
Online Agencies will give different levels of preference to their special rate program members. In some cases, if you are not on a site’s net rate program – you will not display at all on the site. In other cases, you will display but only after all net rate hotels. In either case, you will receive minimal business from the OTA if you don’t participate. You may be surprised to learn that selling a room through a net rate program on an OTA may not be any more expensive than selling a discounted room via a traditional agency:
For less than $2.00 more than you are paying a traditional agency you gain visibility to online consumers who would not otherwise find your property.
How we can help
Travel Tripper can help you understand the net rate programs offered by the various Online Travel Agencies. We can advise you on which programs you should join, and even facilitate the contract process so you don’t need to negotiate directly with each OTA. In most cases you can manage your rates and reservations through our reservation system, so you don’t need to operate separate Extranets for each OTA.
