5 Ways to reduce OTA reliance
5 Ways to Reduce OTA Reliance
OTA (online travel agents) Reliance, which can also be referred to as OTA dependency, refers to a hotel's dependence on online travel agencies, such as Trivago and Booking.com. These OTAs allow customers to book hotel rooms, flights, and other travel services directly from them, reducing the profits of hotels from hefty commission rates and taking away valuable opportunities to collect consumer data.
What is OTA reliance?
OTA reliance is a term that is prevalent in the hospitality industry and it refers to the extent to which a hotel depends on OTAs to generate bookings.
For hoteliers, OTAs have become an essential distribution channel worldwide, offering a platform for travellers to compare prices, read reviews, and book rooms with ease. However, while OTAs provide an excellent opportunity to increase bookings, for hotels relying solely on them, it can be detrimental to your overall business strategy. This over-reliance can result in a decrease in website traffic, a decrease in brand visibility and a further decrease in direct bookings, leading to higher commission fees and ultimately reduced profits.
How is it calculated?
OTA reliance is a calculation that shows the extent to how much of your hotel revenue comes from OTAs. The formula for calculating OTA reliance is (OTA Revenue / Total Revenue) * 100 = OTA Reliance.
Why is it important for hotels to reduce their OTA reliance?
Strict cancellation policies
One of the main reasons for a hotel to reduce their OTA reliance is that OTA bookings often come with strict cancellation policies, which can be a turn-off for many potential customers. By reducing OTA reliance, hotels can offer more flexible cancellation policies, which can help to attract more bookings and ultimately lead to higher occupancy rates and more satisfied customers who deal only with the brand themselves.
Commission fees
Another significant downside of OTA reliance is the commission fees that hotels must pay for each booking made through the platform. These fees can range from 15% to 30% of the booking value, depending on the OTA and the hotel's location. For small and independent hotels, these fees can significantly impact their profitability and ability to reinvest in their business.
Harming brand image
Relying too heavily on OTAs can actually harm a hotel's brand image because many customers associate OTA bookings with lower quality accommodations, and as a result, may assume that a hotel that relies heavily on OTAs is not as reputable or trustworthy.
Lack of relationship with consumers
Another issue with a high OTA reliance is that hotels miss out on gathering valuable customer data. This lack of data can also make it challenging for hotels to personalise their marketing efforts and offer tailored experiences to their guests through targeted emails or special offer campaigns.
Tailored customer needs
Finally, reducing OTA reliance can also help hotels to better understand their customers and tailor their offerings to meet their specific needs. By collecting data directly from customers, hotels can gain valuable insights into their preferences and behaviour, which can be used to improve the overall guest experience. This, in turn, can lead to higher customer satisfaction ratings and increased repeat business.
5 tips to reduce OTA reliance
Google Meta Search
Here, you can use either a free booking link or Google Ads to get into the paid section of the Google Meta Search. Monitor rate parity here so you are competitive.
Google Meta Search, also known as Google Hotel Ads, is a powerful tool that can help hotel businesses reduce their OTA reliance and drive more direct bookings. Google Meta Search allows hotels to showcase their rates and availability directly on Google's search results, providing users with a seamless booking experience.
There are two primary ways hotels can participate in Google Meta Search:
Free booking link
Hotels can opt for the free booking link option, where they can list their rates and availability on Google Meta Search without incurring any costs. When users search for hotels in a specific location, Google then displays a "Book on Google" link alongside the hotel information for a direct way to book with ease.
Google ads (paid placement)
Hotels can also participate in the paid section of Google Meta Search by running Google Hotel Ads campaigns. These ads appear in a prominent position at the top of the Google meta search when users search for a hotel in that area. The ads will include information about the hotel, live rates, and a "Book Now" button.
Brand protection PPC
If OTAs are bidding on brand terms through Google Ads, it could take traffic to the OTAs instead of the customer coming directly to you. Therefore, bidding on your own brand terms will keep you at the top of Google Search.
Brand protection PPC (Pay Per Click) is a digital advertising strategy aimed at safeguarding a hotel's brand name and ensuring that the hotel appears at the top of Google search results when users search for its specific brand terms. This approach helps reduce OTA reliance by preventing OTAs from potentially diverting traffic away from the hotel's official website.
Below are some of the ways brand protection PPC can reduce OTA reliance:
- Secure a top position in search results
- Direct traffic to the official website
- Control over messaging and user experience
- Prevent competitor brand hijacking
- Cost effective strategy that produces high quality traffic
Invest in SEO
Investing in good SEO is one of the key ways to reduce a hotel’s OTA reliance. Effective SEO will drive more organic traffic to the brand’s website and capture potential customers who might have otherwise booked through OTAs.
SEO will help with:
Increased online visibility: By optimising a website for relevant keywords and search queries, hotels can improve their rankings in search engines - such as Google.
Direct booking opportunities: When users find the hotel's website prominently displayed in search results, they are more likely to click and explore the hotel's offerings and book directly.
Building brand authority: SEO is not just about optimising for keywords; it also involves building a strong online presence and recognisable brand authority. Hotels that consistently produce valuable content, relevant information, and positive user experiences can enhance their reputation and credibility in the eyes of potential guests.
Targeting niche keywords: A well-rounded SEO strategy allows hotels to target specific niche keywords and long-tail search queries. These keywords often have lower search volume but higher intent, indicating that users are actively looking for specific services or experiences.
Local SEO: For hotels, local SEO is crucial as it helps them appear in "Local Pack" results and Google Maps listings. When users search for hotels in a particular area, optimised hotels have a higher chance of being featured, increasing their visibility among potential guests searching for accommodations in that location. I.e “Hotels in Alcester”.
Data ownership and remarketing: When users visit a hotel's website through organic search, the hotel retains ownership of customer data. This allows the hotel to implement remarketing strategies, where they can display targeted ads to users who have already shown interest in their website.
Introduce retargeting
Introducing retargeting ads can be a powerful way for hotels to reduce OTA reliance by bringing back potential guests who have previously visited their website but haven't booked yet. Retargeting allows hotels to display targeted ads to users who have shown interest in their website but left without making a booking.
Stay at the forefront of users’ minds: By implementing retargeting ads, hotels can stay at the forefront of users’ minds with users who have shown interest in their hotel.
Encourage direct bookings: Retargeting ads can provide a gentle nudge to potential guests who might be on the verge of booking but haven't yet. By offering special promotions, incentives, or limited-time deals in the ads, hotels can create a sense of urgency and encourage already interested users to make direct bookings instead of going through OTAs.
Increase conversion rates: Visitors who have already interacted with a hotel's website have expressed some level of interest. By retargeting them, hotels can reach users who are further along in the booking process.
Compete with OTAs: Retargeting ads can help hotels compete with OTAs, especially for users who might have compared prices on multiple platforms but haven't made a booking yet.
Have strong book direct benefits
Having strong direct booking benefits can significantly decrease OTA reliance for hotels by incentivising guests to book directly through the hotel's website. Having great direct booking benefits can help build a relationship with consumers and avoid paying commission fees on OTAs.
Cost savings: Offering exclusive discounts or lower rates for direct bookings can save guests money compared to booking through an OTA. When guests see the potential cost savings, they are more likely to choose the direct booking option.
Better value proposition: Hotels can enhance their value proposition by providing additional benefits such as free cancellations, complimentary upgrades, discounted breakfast vouchers, or late check-out options.
Personalised packages: Direct bookings enable hotels to offer personalised packages tailored to the guests' preferences and needs.
Brand trust and loyalty: Direct bookings foster a direct relationship between the hotel and the guest. By offering added benefits, hotels can build trust and loyalty with their guests, encouraging them to return for future stays without the need to go through an OTA.
Flexibility and transparency: By offering free cancellations or flexible booking options, hotels provide guests with the assurance that they can make changes to their plans without incurring additional fees. This transparency and flexibility can be a compelling reason for guests to book directly.
We can help
As a hotel marketing agency, we’re experts in assisting our clients with their marketing needs. The Cab Hospitality team is skilled in SEO, understanding customer needs, brand protection PPC and Google Meta search. When you work with us, we’ll establish a long term strategy to meet your aims and reduce your hotel’s OTA reliance.
We have over 30 years of industry experience and specialist knowledge to ensure we achieve measurable results for you. If you’d like to know more, get in touch.