OTAs, Digital Marketing and Social Media, How are their impact into Hotels Business?Presentation Transcript
WHAT IS THE REAL IMPACT OF ONLINE TRAVEL AGENCIES’s (OTA) IN HOTELS’ REVENUE? WHAT DOES MEAN SOCIAL MEDIA FOR HOTELS? WHY DOES A HOTEL NEED A RELATIONSHIP WITH OTAs?
OTA’s cost: they receive their commission at the point of sale,
Their cost are not included in the Marketing budget
OTA: Hotels’ Marketing channel, the way to sell hotels’ products.
In 2009 : Economic crisis. OTA’s low prices attracted customers for hotels.
In 2010 & 2011: Market recuperation, hospitality industry’s crisis recovery.
DO HOTELS NEED OTAs ?
Analyses of cost OTA’s in Hotels’ Business
July year-to –date occupancies and average daily rates
Source: Smith Travel Research
Cost range from $22,450 at 10% contributions to $173,881 at 25% contribution level
Higher is the OTAs’ contribution, higher are their cost paid by hotels
OTAs retain customers’ profile. Therefore, hotels get business, but not customers .
Customers are the hotels’ real value: hoteliers want customers to become loyal to their chains
Comparison between Reservation costs: directly hotels’ web, GDS and OTA Reservations made through GDS result in 14% less revenue for the hotel than made directly in the hotels’ web and those made through OTAs’ result in 15% less revenue.
Invest in their direct website in order to reduce OTA’s cost and
increase their revenue.
Allocate their savings into Internet Marketing.
Make their web friendly user and provide a call to action to book.
Develop their Internet Marketing strategies: optimization, pay-per-click, email marketing, social media (Facebook, You Tube,
Improve their customers service in their websites .
Hoteliers should :
Although the booking cost made through Direct Online Channel (Hotel Brand Website) is10-15
cheaper than those made via GDS and OTAs, from 2008 OTAs have increased their booking
contribution by 45%.
Hotels distribution has changed dramatically over the past 16% since the advent of
the “commercial” Internet.
Independent hotels and resorts have not change their channel distribution very much: some
still work with OTA which destroys rate parity and causes price erosion.
Those hotels needs to focus on distribution channels which generate the most bookings,
protect rate parity and price integrity and reach the targeted customers segments.
Those hotels are overwhelmed by this rapid shift from offline to online distribution.
They often fail to compete for their fair share of the market.
The main reason is the lack of understanding that Internet marketing is not an expense,
but an investment in direct Online Channel will provide immediate returns at very high ROIs.
Can Hoteliers reverse the OTAs trend and take back control of online distribution channel?
Sometimes Hotel brands conclude partnership with OTAs
Expedia, Inc. the world's largest online travel company, announced
a new multi-year, global partnership agreement with Kempinski Hotels.
Reason could be :
- hotel brand is not enough big to compete with top hotel brands