Online Travel Agencies (OTAs): A Guide for Hotels

Online travel agencies (OTAs) have changed the game for hotels and accommodations all over the world. These digital platforms allow travellers to book their trips with just a few clicks, making the planning process more convenient than ever before. In this guide, we will explore everything you need to know about OTAs and how they can benefit your hotel, and how to manage them with a hotel channel manager.

Youtube Video: Slash Your OTA Fees: A Guide to Lower Commission Rates & Boost Direct Bookings

What are Online Travel Agencies?

Online travel agencies (OTAs) are digital platforms that cater to the needs of modern-day travellers by offering a wide array of services that go beyond just flights, hotels, car rentals, and activities. These platforms serve as virtual marketplaces connecting travellers with accommodation providers, excursion organisers, and transportation services to create a seamless travel experience. Popular OTAs like Booking.com, Expedia, Airbnb, and TripAdvisor have revolutionised the way people plan and book their trips, providing not only convenience but also an extensive range of options to tailor travel arrangements to individual preferences and needs.

How Do Online Travel Agencies Work for Hotels?

OTAs work by partnering with different hotels and accommodations to offer their rooms and services on their platform. These partnerships allow travellers to access a wide variety of options, compare prices, and book the best accommodation for their needs. In return, OTAs receive a commission from the hotels for every booking made through their platform.

Why should you use OTAs for your hotel?

In today’s bustling and highly competitive hotel industry landscape, tapping into the power of Online Travel Agencies (OTAs) can make a significant difference in your business’s visibility, revenue potential, and overall growth. For hotel owners and hospitality professionals striving to carve out a niche in a crowded market, understanding and utilising OTAs efficiently could very well be the game-changer. Here are the compelling reasons why you should consider OTAs as an integral part of your hotel’s distribution and marketing strategy.

1. Widened Visibility & Access to A Global Audience

The primary advantage of listing your hotel on OTAs is the immediate access to their vast user base. OTAs like Booking.com, Expedia, and Airbnb host millions of potential guests from around the globe. By showcasing your property on these platforms, you’re not just making your hotel known; you’re making it a viable option for countless travellers, including those who may have never discovered your hotel through direct channels.

2. Dynamic Pricing Strategy

OTAs provide a unique opportunity for hotels to employ dynamic pricing strategies. This flexibility allows you to adjust prices based on demand, seasonality, and competitor pricing, ensuring your hotel remains competitive and maximises revenue potential. With advanced analytics and tools, you can optimise your rates to improve occupancy during slower periods while capitalising on peak times.

3. Enhanced Brand Awareness Through OTA Marketing Tools

OTAs aren’t just platforms for listing; they’re powerful marketing tools. These platforms spend heavily on SEO and SEM to ensure they rank high on search engine results, effectively granting your hotel exposure that would be costly and resource-intensive to achieve independently. Additionally, many OTAs offer promotional campaigns and featured listings to further enhance your property’s visibility to potential guests.

4. Simplified Booking Experience for International Guests

The global reach of OTAs means your hotel will attract guests from different countries, speaking various languages and using diverse currencies. OTAs simplify the booking process for these guests by offering multilingual support and currency conversion features, making it easier for them to book your hotel. This accommodation of diverse needs significantly expands your potential guest base.

5. Valuable Insights Into Guest Preferences and Booking Behaviour

Knowledge is power, and OTAs offer a treasure trove of data on guest booking behaviour and preferences. By analysing this data, you can tailor your offerings to better meet guests’ needs, refine your marketing strategies, and ultimately, enhance guest satisfaction. This level of insight can drive more personalised experiences, encouraging repeat bookings and positive reviews.

Convenience is a key factor for customers using OTAs, as they provide an easy way to compare prices and book trips swiftly. If you want to reach a larger audience and increase your hotel’s visibility, partnering with OTAs is the way to go. Additionally, using multiple OTAs can also help diversify your customer base and improve your online presence.

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Benefits of Using Online Travel Agencies

Increased Visibility

Partnering with OTAs can significantly increase your hotel’s online visibility. These platforms have a large user base, making it easier for potential customers to find your property and book their stay.

Attracting New Customers

OTAs also help hotels attract new customers who may not have discovered their property otherwise. With the vast reach of these platforms, your hotel can be exposed to a whole new audience, leading to more bookings and potential loyal customers.

Cost-Effective Marketing

Partnering with OTAs can also be a cost-effective marketing strategy for hotels. Instead of spending a significant amount on advertising, OTAs only charge a commission for every booking made through their platform.

Flexibility in Pricing

OTAs also give hotels the flexibility to adjust their prices based on demand and market conditions. This allows hotels to optimise their revenue and occupancy rates, especially during low seasons.

Challenges of Using Online Travel Agencies

High Commission Fees

Although OTAs provide various benefits for hotels, they also come with a cost. These platforms charge a commission fee for every booking made through their website or app, which can be as high as 25% of the room rate.

Lack of Control over Branding and Guest Experience

When partnering with OTAs, hotels give up control over their branding and the overall guest experience. The OTA’s website or app becomes the primary platform for customers to book their stay, making it challenging for hotels to showcase their unique brand and services.

Dependency on Third-Party Platforms

Relying on OTAs for bookings also means that hotels are dependent on their marketing strategies and algorithms. Any changes made by the OTA can directly affect a hotel’s visibility and booking rates.

Choose the Right OTAs to Partner Your Hotel With

Do your research and choose reputable OTAs that align with your hotel’s target market and brand.

While there are some challenges associated with using OTAs, the benefits often outweigh them. Here are a few reasons why your hotel should consider partnering with online travel agencies:

Increased Bookings and Revenue

Partnering with OTAs can lead to a significant increase in bookings and revenue for hotels. With their vast user base and marketing strategies, OTAs can attract more customers and drive more bookings.

Improved Online Presence

Partnering with OTAs also helps improve a hotel’s online presence. OTAs invest heavily in SEO and SEM, making it easier for potential customers to find your property when searching online.

Better Competitor Insights

Working with multiple OTAs can provide valuable insights into competitor pricing and strategies. This information can help hotels adjust their rates and stay competitive in the market.

Opportunity for Targeted Marketing

OTAs allow hotels to target specific markets and demographics through featured listings and promotional campaigns. This can help attract a diverse range of guests and increase brand awareness among different groups.

Which Online Travel Agency Is Best?

There is no single “best” online travel agency as each one offers different benefits and features. The best OTA for your hotel will depend on its specific needs, target market, and budget. Some popular OTAs include Booking.com, Expedia, TripAdvisor, and Airbnb. It is recommended to partner with multiple OTAs to increase visibility and reach a wider audience. If you need a starting point, read ‘Your Ultimate Guide: List of Online Travel Agencies‘.

Tips for Working with Online Travel Agencies

Are you considering partnering with OTAs for your hotel? Here are some tips to help you make the most of this collaboration:

  • Research and compare different OTAs to find the best fit for your hotel.
  • Negotiate commission rates and terms before signing any contract.
  • Keep track of your inventory to avoid overbooking through multiple platforms.
  • Use OTA marketing tools, such as promotional campaigns and featured listings, to increase your hotel’s visibility.
  • Incorporate OTA data into your overall revenue management strategy to optimise rates and occupancy rates.
  • Provide a consistent guest experience across all booking channels to maintain brand consistency.

In conclusion, partnering with OTAs can provide numerous benefits for hotels, such as increased visibility, access to a global audience, and valuable insights into guest behaviour. However, it’s essential to carefully consider the challenges and develop strategies to mitigate them for a successful partnership with these platforms.

Negotiating Favourable Terms with OTAs

Negotiating favourable terms with Online Travel Agencies (OTAs) is essential for hoteliers seeking to optimise profitability and maintain a competitive position in the market. Here are some effective tactics for negotiating commission rates and terms with OTAs:

  1. Demonstrate Value: Highlight the unique value proposition of your property, such as its distinctive amenities, positive guest reviews, or strategic location. Emphasising what sets your property apart can provide leverage during negotiations, potentially justifying a lower commission rate.
  2. Volume Commitments: If you have multiple properties or a considerable inventory to offer, you may be able to negotiate better commission rates based on the volume of business you can bring to the OTA. This approach allows you to leverage your scale for more favourable terms.
  3. Seasonal Flexibility: Negotiate for flexible commission rates that vary by season or demand fluctuations. For instance, you could propose lower commissions during off-peak periods to ensure that you maintain profitability throughout the year.
  4. Value-Added Services: Offer additional services or packages exclusively through the OTA platform to incentivise them to consider a more competitive commission rate. This could include exclusive promotions, bundled offerings, or unique experiences tailored to their audience.
  5. Performance Incentives: Propose a performance-based commission structure tied to specific booking milestones or revenue targets. By aligning incentives with the OTA’s goals, you create a win-win scenario where both parties benefit from increased performance.
  6. Rate Parity Considerations: While negotiating, be mindful of maintaining rate parity across all distribution channels to avoid potential conflicts and maintain a fair playing field for all partners.

By utilising these tactics and approaching negotiations strategically, hoteliers can seek to secure more favourable terms with OTAs while maximising profitability and maintaining a competitive edge in the dynamic online travel marketplace.

Why Use a Hotel Channel Manager with OTAs?

Using a hotel channel manager in conjunction with OTAs can provide numerous benefits for hotels, including streamlining operations, increasing efficiency, and improving revenue management. Here are some reasons why using a channel manager is essential when working with OTAs:

  • Real-time Inventory Management: A channel manager allows for seamless integration between your property management system (PMS) and OTA platforms, ensuring that your inventory is always up-to-date in real-time.
  • Avoid Overbooking: By automatically updating availability across all channels, a channel manager reduces the risk of overbooking through multiple platforms, resulting in lost revenue and guest dissatisfaction.
  • Rate Consistency: A channel manager can help maintain rate parity by automatically adjusting rates across all OTAs based on set rules, ensuring consistency and avoiding potential conflicts.
  • Efficient Distribution: With a channel manager, you can easily distribute your inventory to multiple OTAs without the need for manual updates or logging into each platform individually.
  • Streamlined Operations: By automating tasks such as inventory management, rate updates, and reservation syncing, a channel manager frees up time for hotels to focus on other areas of their operations.

If you’re looking to try a channel manager for your hotel, Preno offers a comprehensive and user-friendly solution that can help simplify your distribution strategy. With seamless integration with various OTAs, Preno’s channel manager can save you time and effort while helping maximise revenue and occupancy rates for your property. You can even get a 7-day free trial to see for yourself how Preno can benefit your hotel’s partnership with OTAs.

In conclusion, using a channel manager with OTAs can help hotels streamline operations, increase efficiency, and maximise revenue potential. It is an essential tool for any hotelier looking to effectively manage their online distribution strategy and optimise occupancy rates. So, it is crucial to carefully select a reliable and reputable channel manager that integrates well with your PMS

So, it is crucial for hotels to carefully consider their options and negotiate favourable terms with OTAs to ensure a successful partnership that benefits both parties. Remember, strategic partnerships can lead to mutual growth and success in the long run. Thus, by choosing the right OTAs, maintaining consistent branding, and negotiating favourable terms, hotels can leverage the power of online travel agencies to drive bookings, revenue, and growth. Overall, a well-executed partnership with OTAs can be a valuable and lucrative asset for any hotel. So, take the time to research, negotiate and create mutually beneficial relationships with online travel agencies to maximise your hotel’s potential in the digital marketplace.

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Further Reading About OTAs

How To List Your Property on Airbnb

Airbnb is a popular online platform for short-term rental accommodations. If you are looking to list your property on Airbnb, this step-by-step Airbnb guide will walk you through the process and provide tips for maximising your listing’s success.

How To List Your Property on TripAdvisor

TripAdvisor is a well-known travel review website that also offers booking options for accommodations. Listing your property on TripAdvisor can help increase visibility and bookings. Check out this step-by-step guide to listing your property on TripAdvisor.

How To List Your Property on Booking.com

Booking.com is a leading online travel agency for hotel reservations. Listing your property on Booking.com can help reach a global audience and attract more bookings. This step-by-step guide will walk you through the process of listing your property on Booking.com.

How To List Your Property on Agoda

Agoda is a popular online travel platform that connects travellers with accommodations around the world. If you want to list your property on Agoda, our step-by-step guide will help you get started and make the most of your listing.

How To List Your Property on Trip.com

Trip.com is a Chinese online travel agency that offers booking options for hotels and other accommodations. If you want to list your property on Trip.com, this detailed guide will lead you through each stage, offering advice on boosting exposure and securing reservations.

How To List Your Property on Expedia

Expedia is a popular online travel platform that offers booking options for hotels, flights, and other travel services. Listing your property on Expedia can help attract more bookings from a global audience. This step-by-step guide will walk you through the process of listing your property on Expedia.

How To List Your Property on Hotels.com

Hotels.com is a leading online platform for hotel reservations. Listing your property on Hotels.com can help increase bookings and reach a global audience. This step-by-step guide will walk you through the process of listing your property on Hotels.com, including tips and best practices for maximising your listing’s success.

How To List Your Property on a GDS: A Step-by-Step Guide

Global Distribution Systems (GDS) are computerised reservation systems used by travel agents and online booking platforms to access real-time information and make reservations for flights, hotels, car rentals, and other travel services. Listing your property on a GDS can help increase visibility and attract bookings from travel agents worldwide. Our step-by-step guide will walk you through the process of listing your property on a GDS and provide tips for maximising your presence within this distribution channel. 

How To List Your Property on VRBO: A Step-by-Step Guide

VRBO (Vacation Rentals by Owner) is an online platform for listing and booking vacation rental properties. If you want to list your property on VRBO, this step-by-step guide will help you get started and make the most of your listing. It includes tips for optimising your listing, managing reservations, and leveraging VRBO’s marketing tools to attract more guests.

About the author

Kendra, the Marketing Content Manager at Preno, brings her expertise in Marketing and Communications to help hoteliers stay ahead of the curve. With a deep passion for the industry, she is committed to providing valuable insights and strategies for success.

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