Hotels vs. OTAs… vs. Guests.
The following is part (my part) of a six-handed article, co-written in collaboration with Silvia Cantarella, Founder of Revenue Acrobats and Fabian Bartnick, Founder of Infinito, with the intention of giving readers a different perspective on what has always been a burning topic and now, even more so.
There are many things that, in my opinion, need to be put into perspective.
Hotels vs. OTAs is one of them: a burning, controversial, pointless yet crucial topic.
We are living an extremely delicate situation. I’m aware that there are hotels, many more than just a few, that won’t open their doors anymore.
In such a state of mind, getting emotional and emotionally reacting to any external stimuli is understandable, other than absolutely normal.
Yet, emotional reactions never lead the way. And don’t get problems fixed.
In the last 1 and a half months, I’ve silently noticed a recurrent and increasing sentiment: too much attention around what has been happening to B.com, EX and the difficult times the OTAs in general have been going through.
From how they managed the cancellation process of pre-covid reservations, not a single day has passed without debating on every single step the major OTAs have taken.
Let’s face it: we’ve never loved them. Nevertheless, it’s as if, all of a sudden, the OTAs have become the root cause of all problems our hotels have always had.
My point is: where were we before? Why now everything that happens to them is so important? Are we really counting of getting rid of them because the covid-19 is giving us the chance to?
Hotel vs. OTAs is a burning topic, because it is, indeed, important.
Yet, it is pointless, because if we keep on seeing it as a fight, we are probably missing the big picture altogether, that includes multiple players, all connected to each other, all dependent from each other.
Starting from the Guest, whose hands are the only ones our butt belongs to (professionally speaking, so to say).
And lucky us, Covid-19 or not, this will never change.
Pretending to cut off the OTAs, or teaming up with other hoteliers to negotiate better commissions or, even worse, pretending to replace the OTAs with the old-fashioned physical travel agencies, is like expecting jobs while spitting on business owners.
In the equation, Guests are your business owners. And if for the last 15 years they had preferred making hotel reservations on OTA platforms rather than booking direct on hotels’ sites or physically going to their local travel agent, it’s because the OTAs understood better than anyone else what the market wanted.
And moved accordingly. Simple as that.
Physical agencies didn’t die because of the OTAs. They died because of the response of the market to the solution provided by the OTAs.
By cutting the OTAs off, we will not fix a problem, we will open a whole in the market needs and wants that soon – way sooner than we may possibly think – will be filled by other players.
The world always progresses, it never regresses.
Looking back though, it’s not a bad thing, per se. By so doing, maybe we can try to understand now what we, as an industry, didn’t understand before.
In my humble opinion there is, indeed, one big (no, huge) thing that sums it up, and it’s the only thing I would like to highlight today:
Distribution First (this is not going to be easy).
“Connect your hotel to the main Metasearch Engines”
“You have to run Brand Protection campaigns on Google”
“You have to invest on Google Ads”
“You must guarantee the parity rate”
“Offer cheaper rates on your site than the OTAs”
“Install a price-comparison widget and you will get more direct bookings”
I could go on for hours listing what I’m used to refer to as clichés, but I just stick to my favorites: to me, none of the above statements corresponds to true.
The point is: do you know any complex problem whose solution was simple?
Hotel distribution is a mess. Literally. Period. A complex maze about which I talked in this article.
And a complex problem involves complex solutions.
If getting more revenue and direct bookings was a question of showing how competitive our direct price is, as opposed to the rates published on the OTAs, do you think we would still have that problem?
If getting more revenue and direct bookings was a question of investing more budget on Google, would we still talk about it?
Like a recipe, a delicious cake is a combination of ingredients perfectly combined and mixed with each other, in perfect doses, each of which in a specific order.
The same happens with our hotel’s online strategy. Want to get more revenue and be less dependent on the OTAs? Cool, first ingredient: distribution.
The point is: if your distribution is not healthy and under control, not only are you paying more commissions, but you are also and literally throwing your marketing budget out of the window.
Whether this budget is for marketing campaigns on Meta’s, brand-protection and long-tail keyword-based campaigns on Google, it doesn’t make any difference: money wasted!
See it this way: if you don’t own your distributions, the 3rd parties will, on your behalf. And playing this game, is like dealing with the House in Vegas: the house always wins. Always.
Just to name an example: my beloved price-comparison widgets, do you know who feeds these tools? Meaning, who actually sends them all your prices published on the OTAs you work with? It’s easy, the OTAs.
Doesn’t it sound for them like shooting themselves in their own foot?
It’d be like you suggesting your prospects to ask for a room to your best competitor whilst your hotel is empty.
Does that make sense? Not at all. Indeed, do you remember the fracas B.com came up with, some time ago, announcing that they were cutting off any interface with these (one in particular) price-comparison providers?
How long did that fracas last? 1 week? 2 weeks?
And then? Dead silence, as if by magic. It was as if nothing happened.
Maybe because B.com, and all other OTAs that didn’t even move a finger against these tools, realized that these tools were not a threat to them?
Hotel Distribution is not easy. Nor is it fun (well, it is for some, like me. Indeed, I love chaos ).
Now, as said before, complex topics come along with complex solutions, or strategies.
If you pretend me to give you a simple, easy and quick solution right here, right now, is like asking a constructor to build a house in one day: not possible.
My only intention with this article is to simply bring a bit of perspective, at least my perspective, that is based on 3 choices:
- You give up on your distribution, because it’s too complicated. Thus, you accept to be at the mercy of any 3rd party channel.
- You don’t believe in what I just said. Thus, keep thinking that there may be easy solutions we all love to buy into, something like a tool that can some sort of magic overnight.
- You face the situation and, step by step, take back the ownership of your distribution.
That said, my very last point is what you probably don’t expect hearing from me, after all I just said.
But I really believe in this and I would love to make the point clear: the OTAs are not the enemy. They play their role; they simply do their own business.
I admit, I get easily mad at them, for example, when they refer to hotels as their partners. Every. Single. Time. I can’t help but virtually bang my head against the wall when I hear or read such crap of them.
Their shameless is indigestible, yet fascinating.
However, you probably know this better than me: it is not yet the time to get rid of them.
We need them as much as they need us, hoteliers.
Google? Same story. As said, as long as Guests own our butts, they own Google’s, too, and any other OTA’s out there.
As a matter of fact, let’s focus more than ever before on them: our Guests. As people, as human beings. Not only what’s in their wallet.
There is where, I strongly believe, stands THE solution.