Introduction
Online Travel Agents (OTAs) have revolutionized the hospitality industry, providing a convenient way for hotels to gain visibility and attract travelers worldwide. However, they come at a price – high commission fees that can eat into your profits. For hotel owners and managers, reducing OTA commissions without sacrificing bookings is a delicate balancing act. In this blog post, we will explore 10 proven strategies to help you reduce OTA commissions, enhance direct bookings, and maximize your revenue.
Let’s dive into these strategies and take control of your distribution channels!
Leverage Your Hotel Website to Capture Direct Bookings
The most straightforward way to avoid paying high commissions to OTAs is to encourage guests to book directly on your hotel’s website. To do so, you’ll need to make your website a compelling choice for potential customers.
Offer Exclusive Discounts and Perks
Guests are more likely to book directly with you if they see added value. Offering discounts, free Wi-Fi, room upgrades, or complimentary breakfast can encourage direct bookings. You can market these perks on your website and through email marketing campaigns to build awareness.
For example, the XYZ Hotel offers a 10% discount for all direct bookings and a free cocktail at check-in. This type of exclusive offer appeals to guests who might otherwise use an OTA.
Optimize Your Website for Conversion
Your website needs to be user-friendly, mobile-optimized, and fast. A slow-loading website or complex booking process can turn potential customers away. Use clear calls to action (CTAs), an easy booking form, and high-quality images to create a seamless experience for visitors.
An easy-to-use booking engine can make the difference between a visitor leaving your site and completing a booking.
Utilize a Channel Manager to Streamline Distribution
Managing multiple OTAs can be time-consuming and error-prone, but a channel manager can help reduce the complexity. This tool allows you to control your room availability, rates, and bookings across different platforms from one central system.
Sync Your Rates and Availability Across Platforms
With a channel manager, you can ensure that all your OTAs and direct booking channels are synchronized. This helps reduce the chances of overbooking and ensures that your pricing is consistent, making it easier to track and adjust commissions.
For example, the ABC Resort saw a 30% increase in direct bookings after implementing a channel manager, as it helped them reduce dependency on OTAs and manage their distribution more effectively.
Reduce Over-reliance on OTAs
A channel manager can also allow you to expand your reach to lesser-known booking platforms with lower commissions, reducing the heavy reliance on OTAs like Expedia and Booking.com. Exploring niche platforms or regional sites may help diversify your distribution and lower your overall commission payments.
Build a Loyalty Program to Encourage Repeat Bookings
A well-designed loyalty program can significantly reduce OTA dependency by fostering repeat bookings from your guests. Offering incentives such as loyalty points or discounts on future stays will encourage customers to book directly with you in the future.
Create Tiered Reward Systems
Implementing a tiered rewards system can motivate guests to return. For example, after five stays, guests might receive a free night or an exclusive suite upgrade. This strategy not only incentivizes direct bookings but also helps to increase customer retention.
Promote Loyalty Programs Through Multiple Channels
To get the most out of your loyalty program, make sure to promote it across your website, email newsletters, and social media platforms. Include testimonials from past guests to highlight the benefits of joining your loyalty program and the exclusive perks they can enjoy.
Diversify Your Marketing Channels
Relying solely on OTAs for your bookings is risky. It’s essential to diversify your marketing efforts to build a more resilient revenue model. This can include investing in search engine optimization (SEO), pay-per-click (PPC) campaigns, social media marketing, and email marketing.
Focus on Local SEO
Local SEO is particularly important for hotels that rely on regional guests or business travelers. Ensure that your website is optimized for local search terms like “best hotel in [city]” and create a Google My Business profile to improve your visibility on local searches.
Social Media and Paid Ads
Investing in paid ads on social media platforms such as Facebook, Instagram, or Google can help attract new guests. Additionally, maintaining an active presence on social media helps engage potential customers and can lead to more direct bookings.
Negotiate Better OTA Commission Rates
While it may seem challenging, it’s possible to negotiate lower commission rates with OTAs, especially if you’re a larger property or a frequent partner.
Build Strong Relationships with OTA Account Managers
Developing a strong relationship with your OTA account manager can give you more leverage when discussing commission rates. Share your booking data with them and show them the potential for increased bookings if you were offered a better commission rate.
Discuss Commission Tier Systems
Many OTAs offer tiered commission rates based on the volume of bookings you generate. If you have a strong history of bookings, ask for a lower commission rate or negotiate perks like increased visibility in exchange for higher commissions.
Offer Packages and Add-ons to Boost Direct Revenue
Instead of just competing on price, consider offering value-added packages or experiences that can attract guests. These packages can be marketed on both your website and through OTAs but with higher margins than just the room rate alone.
Create Customizable Packages
Offer packages that include activities like tours, dinners, or spa services. Customizable options allow guests to add on experiences, which can lead to higher revenue per booking while reducing the cost pressure of OTA commissions.
Market Your Packages on OTAs and Direct Channels
Ensure that your packages are marketed both on OTAs and your direct booking channels. The goal is to capture a higher share of the revenue from the package and reduce the reliance on room-only bookings through OTAs.
Ready to take control of your hotel’s booking strategy? Start by optimizing your website, offering exclusive deals to direct bookers, and exploring new ways to reduce your OTA reliance. Share your experiences in the comments below, or check out our related blog posts for more hotel marketing insights.