3 Ways OTAs Hijack Your Hotel’s Direct Sales

Are you paying more commissions to online travel agents (OTAs) than you should?

Many hotels are. In fact, increasing direct bookings is the #1 request I get from hotel owners and operators. It’s why the mission of this site is to “show hotels how to use the internet to increase direct bookings.”

If travel websites are helping fill rooms with guests that wouldn’t have booked otherwise, that’s one thing. It’s quite another if you’re paying unneeded commissions for bookings that could have been made through your own website.

Here are three common ways I see 3rd-party sites stealing direct bookings from hotels:

1) They bid on your hotel name for cheap clicks

On search engine PPC networks, your hotel name is often just a few cents per click. At prices this low, I’m amazed when hotels pass up this opportunity and allow OTAs to bid on their own name.

How you can beat them: Include your hotel name as a keyword in your PPC campaign

2) They outrank sloppy search optimization

Some hotels have websites that are so poorly optimized, that they don’t even appear at the top of search results for their own name!

Savvy OTAs can come in and rob hotels of all these easy pickings and get lots of free traffic.

How you can beat them: Implement a smart search optimization strategy for your website

3) They attract searches for ‘reviews’

Keyword research reveals one of the most common search query structures is: keyword + “review.”

The reason is simple: people want other opinions before making a purchase. Based on this logic, sites like TripAdvisor nearly always outrank a hotel’s website for review searches.

How you can beat them: Publish your own page of 3rd-party reviews…and promote it.

Sometimes, they’re just a lot more savvy about online marketing

Recent industry studies revealed that Expedia, Travelocity, Priceline and Orbitz rely heavily on the hotel industry for the bulk of their profits. Since airlines do not pay commissions on tickets sold, the hotel industry contributes more than 60% to booking fees collected by OTAs.

So these companies will fight hard with every trick available to encourage bookings through them.

What if you budgeted the current amount you spend on OTA commissions to build an online marketing campaign that drove direct bookings? This strategy would quickly pay for itself, and reap dividends over the long term.

Are OTAs stealing bookings from your hotel website?

5 thoughts on “3 Ways OTAs Hijack Your Hotel’s Direct Sales

  1. Two souls, one thought.
    More or less connected at least.
    I just posted about tripadvisor where you kindly commented.
    One of my concerns is the heavy interconnection between tripadvisor and the OTA’s
    Okay you can be reviewed. and you can be more visible, but at the same time if you publish their widget on your hotel site you have a chance of pulling a visitor away of your website….and have them making his reservation via an Ota
    Thusfar I have refused to pay for ads per click because of the fraudulent abuse (clickfraude) and believing the Ota’s paid ads for me….I don’t know yet
    Sigh…as a hotelier you’ll have to be a nerd

  2. It’s a tough fight because the OTAs chief (and sole) business is booking hotels etc online. That’s all they do. They’re experts.

    A hotel has to be an expert at being a hotel first and foremost, and then online marketing is just one of dozens of other things that need to be mastered.

    Still, as your 3 points clearly demonstrate, it isn’t rocket science either. Good SEO, do PPC on your own name (especially when it’s pennies per click!), and add 3rd party reviews. That isn’t hard, but it’s still a brave new world for many hotels.

  3. Nice post, thanks for it.
    I have an interesting topic for a future article that should interest many hotels.
    We always hear about rate parity, but should we consider offering better rates on our website ?
    I personnally started to offer benefits for long stays who book through our website and I felt an increase in number of bookings. But I ask myself if I should just offer better rates to everybody.
    There are different ways to do it in order that the OTA’s rate checker do not see it.

  4. There is some good advice here, but the tone amounts to unfair defamation of OTAs. These points are not true of all OTAs and the language used in this article goes way over the top in characterizing OTAs as rapacious entities.

    To be sure, not all OTAs bid on their hotel partners’ keywords. In fact, some OTAs forbid their partners and affiliates from bidding on long lists of brand and hotel partner names. They discourage them from spamming and encourage valuable, usable content. When it comes to keyword bidding, I personally feel that since they are paying to sell your hotel product, it shouldn’t be an issue. It’s basically free advertising for the hotel property.

    Secondly, SEO optimization should be paramount to any business determined to have an effective web presence. That OTAs are effective at doing so is no slight against them and does not “rob” anyone in any sense of the word. These are not tricks but accepted business practices in the world of online travel marketing. In particular, small hotels and B&Bs can take advantage of a tremendous niche to be filled here.

    Thirdly, posting objective third-party reviews is a service to the customer and one that they rightfully seek out. The advantage of valuable, relevant content like reviews on the site of an OTA or a TripAdvisor-type site is that you can compare and derive insights from other travelers like no other channel. This is a tangible service. If a property provides what it promises, it is usually reflected in the reviews – and going to see for yourself usually bears this out.

    I’d like to add that signing up with a distribution system and/or OTA is a great way for smaller, non-chain and boutique properties to have a chance to compete with the big boys.

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