Relief Plan for OTA Frustration – Online Travel Agents: As consumers become increasingly reliant on web and mobile to research and book their travel, they are not aware that by visiting so many travel sites in the hopes of finding a better deal they are wasting their time.
Relief Plan for OTA Frustration – Online Travel Agents
Once upon a time there was a magical place that offered something referred to as a full-service gas station. Do you remember? A young man dressed in a clean uniform would come to your car window and ask if you wanted Ethyl or Regular? He would pump your gas, check your oil, check your tire pressure and wash your windshield. It may sound like a fairy tale but it is true.
In today’s age local travel agents are going the same way as the full service gas station. People do not have time for full service treatment anymore. Online Travel Agents (OTA’s) are on the Internet and filling that niche. They are convenient, but not quite “full service.” What is an OTA? An Online Travel Agent is a booking resource with a searchable travel website to compare and book travel. Without question, the world of travel booking has undergone major transformation with technology advancements and digital tools. But as consumers become increasingly reliant on web and mobile to research and book their travel, they are not aware that by visiting so many travel sites in the hopes of finding a better deal they are wasting their time.
An Expedia Media Solutions study found that travelers visited an average of 38 travel sites before booking. Of those 38 sites, OTA sites dominate trip planning for packages while air and hotel bookings take up a 47% share of the visits. And the unfortunate reality is that no matter how many OTA search sites you visit, the hotel prices are the same, and so is the content.
Do OTA’s have you frustrated? They certainly do me as a property owner, and many consumers are frustrated as well. On the surface is their commission rate, typically 25% – 30%, which can squeeze a property’s margins. But there’s a bigger factor and it comes down to branding and their domination of the Global Distribution System (GDS) for travel services. The GDS is a network that enables automated transactions between third parties and booking agents in order to provide travel-related services to the end consumers. The GDS links hotels, services, rates and bookings, consolidating products and services across all travel sectors: i.e., airline reservations, hotel reservations, car rentals, and activities.
In order for Beechwood Inn to be listed on the GDS we must also allow our rooms to be available to OTA’s. OTAs such as Travelocity and Expedia can help rent my rooms but they are also my biggest competition. Their objective is to drive consumers to book with them rather than book directly with Beechwood Inn and charging me a hefty commission to do so.
Rate parity clauses are required by all parties. These statements prohibit an inn or hotel from publicly advertising rates that are lower than what OTAs advertise. And OTA rates are all based on the standard “rack-rate” advertised by each participating property. This can mislead customers into thinking they can’t get a better deal if they book directly through my website or call my front desk. And the OTAs’ marketing machine is huge, larger than any single Inn, hotel, or chain can commit to. They advertise across all major communication mediums while we at Beechwood Inn struggle to balance one or two. So what am I to do? What should consumers do?
My advice, buy local. Everything is better when you get it direct from the source: Food tastes fresher, flowers last longer. Does that hold true for travel reservations? A “King Guest Room” at Beechwood Inn is a “King Guest Room” no matter how you book it, right? Nope.
How it Works: When looking for hotels, many savvy travelers start on an OTA site so they can comparison shop. As I mentioned above, to be included in the search results Beechwood Inn had to make agreements that include providing a hefty commission for bookings and agreeing to rate parity. So if you reserve a $200 room through an OTA, they collect about $60. But if the cost to you is the same either way, why should you book direct? Well there really are a number of good reasons to call the hotel or inn directly.
Benefit 1: Flexibility: Need to make a change to your reservation? Don’t call the Beechwood Inn as we did not take your reservation; we just get an auto-message adding your reservation to our system. We may not even get helpful contact information. Need to cancel and get a refund – we don’t have your money. You need to call the OTA’s 1-800 robo-number, then wait a while listening to bad music, a few commercials and finally someone asks for you to correctly enter the 29-digit reservation code. Whoops got cut off, so start over.
Benefit 2: Lowest Price. OTA’s with Travel Search Engines may appear to offer the quickest way to review preferred hotels in your price range. But the truth is these sites, including Kayak, Trivago, Expedia, etc, all must have the same prices because of rate parity, and they are all feeding from the same sources that offer these rates. Call the inn or hotel for the best price. If I want you to stay bad enough I can offer something special. The OTA’s have no flexibility. Another frustration that comes with relying on OTA sites is that the prices are often outdated. Fault does not lie with the travel site, rather, this is the nature of a web portal relying on multiple layers of hotel sources to update pricing. But for the consumer this can be a highly frustrating experience – they have to start their search again after clicking through to the checkout page, where they discover the price is higher than early stated.
Benefit 3: No Bad Rooms. I was chatting with a front-desk agent about how her hotel chain distributes rooms at check-in. Curious, I asked what method her staff uses to determine who gets the best-located rooms. She said: Those that book through the hotel website or who are hotel loyalty members usually get rooms with better views and quieter locations. Travelers that book through OTAs, will often get what she called “ice-machine rooms,” basically less desirable rooms. She said this is common among front desk clerks at major chain hotels. It helps sweeten the deal for travelers who book directly. At Beechwood Inn we have no bad rooms.
Benefit 4 – We Can Help You Plan Your Trip. If you call Beechwood Inn we are going to help make your visit more enjoyable. We are happy to personalize your visit. When booking direct, we can make sure you get adjoining rooms, or that you are served a gluten-free breakfast. Want a personal itinerary to some great waterfalls, we’re happy to map it out. A direct booking is the surefire way to get a tailored experience.
Direct Benefit 5 – We Offer Personal Service. OTA’s are just selling inventory, they don’t fluff your pillows. At Beechwood Inn we provide the hospitality you expect and enjoy. We give each guest personal attention. We offer daily wine-thirty and we can make the call to arrange a personal winery tour on a day they are not usually open. We can often get you a dinner reservation on a busy night. You should leave your money where it belongs, reward the property and folks taking care of you. Cut out the middle man and save all of us a lot of money.
Benefit 6 – Value Added Offerings and Specials. I want to give consumers a reason to book direct. Is it your anniversary – if you booked with us we will ask you if it is a special occasion and then put a complimentary bottle of wine in your room. Would you like a Military Discount? The OTA just publishes our standard rack rate so they don’t have access to any of our special offerings, spa packages, cooking classes, romance packages. Would you like to upgrade your room to a king if it is available? With only one upgrade available, I will give that upgrade to the direct-booker over the OTA-booker, every time.
Benefit 6 – Loyalty Reward Points. It doesn’t matter if it is Select Registry Rewards, of which Beechwood Inn is a member, or Hilton HHonors, Marriott Rewards or any other hotel loyalty program, if you book directly with the Hotel you will get your rewards.
At Beechwood Inn we go out of our way to delight every guest with wonderful hospitality and service, regardless of how you might book. But we also urge you as consumers to book smarter in order to save time and money for both of us. Here’s our inside advice:
- Spend more time researching what you want to do at your destination and less on booking hotels.
- If you feel compelled to use an OTA Pick only one metasearch engine to compare. You are going to get the same results because of price parity.
- If reviews are important to you, then leverage the reviews on TripAdvisor.
- Choose one site to book your hotel. But, I recommend first check directly with the hotel. Most likely, they will have the lowest available rate, they may also be offering special deals, and they may offer special rewards for booking direct such as free internet or parking. There are good reasons that over 50% of hotel bookings remain brand direct.
Relief Plan for OTA Frustration – Online Travel Agents By David Darugh, Owner, Beechwood Inn – Georgia’s Premier Wine Country Inn