Advantages of
Direct over OTA

OTAs are monopolising the hotel booking market with top OTAs namely ​Booking.com​, Expedia and HRS collectively dominating 92% of the global market, as revealed in a study conducted by HOTEC in partnership with the University of Applied Sciences of Western Switzerland Valais. Not only are OTAs posing a great threat towards direct hotel booking with their endless marketing budgets and high SERP listings but OTA commission fees have steadily risen to very high levels that have resulted in great losses in profit margin. This article sets to outline the main advantages of strengthening direct bookings and decreasing reliance on OTAs in order to achieve higher revenue stream generation.

Restructuring distribution costs by shifting share from the OTAs to the direct channel​ should consolidate sources of direct revenue. Optimizing direct bookings will cut down high commission costs and decrease the necessity for reliance on OTAs to secure the majority of bookings; in turn, increasing direct revenue profit margins as well as enhancing guest relations.

Zak Borg,
Partner
Fact: Up at 4:45am 💪

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OTA contracts often include clauses stating that hotels, under any circumstance, may not contact guests that booked accommodation through the OTA, particularly for any marketing purposes. Sometimes this clause may additionally state that the OTAs will claim full ownership of the guest’s data. Therefore, decreasing reliance on OTAs would help gain full access and ownership to customer data and booking preferences – furthering the hotel’s understanding of their customers.

The hotel website’s UX provides direct booking guests with their first impression of the hotel. Most hoteliers offer loyalty programs so as to build a high-value customer base. Loyalty programs may include being greeted with welcome drinks, setting your own check-in and check-out time rather than having to accommodate to a fixed time, and earning loyalty points per stay which may then be redeemed for special offers.

Not being restricted to having to comply with OTA’s terms and conditions concerning cancellation policies and rate parity should relieve hoteliers from feeling pressured into getting onboard something they would not voluntarily sign up to. Entitling them more freedom when setting their own service conditions and protecting IP rights.

OTAs bid extensively on hotel brand keywords to enable them to secure the first ad positions on a SERP. However, increasing brand awareness and launching campaigns should projectedly generate more direct bookings and show an increase in findability and organic searches of their hotel brand.