On Monday, the NY Times reported that “MMGY Global’s 2015 survey of nearly 3,000 leisure travelers found that while third-party sites remain popular for comparing vacation hotels and prices, there was a noticeable drop compared to 2014 in how often respondents actually booked rooms through the site.”
PhocusWright, on the other hand, reports that OTAs have gained market share in the U.S. (15% of total hotel sales), and they are projected to grow another 5-6% per year (HospitalityNet).
The MMYG report tells us that hotels are becoming savvier about working around rate parity restrictions to entice guests to book directly, whether through loyalty programs or perks, while the growth of OTA market share points to massive consolidation among OTAs and their increasing marketing power as a result of it. This hospitality tug-o-war is complicated by the fact that hotels are pulling on both sides of the rope.
In order to continue to inch the rope back toward the hotel side—driving lower-cost, higher-profit direct bookings—hotels must always go back to the traveler. Assuming rates are equivalent, what travelers need in order to book directly is to be able to discover the hotel (presence) and to believe the level of service at the hotel will be greater than that of an OTA (trust). Presence and trust.
For most hotels, the presence piece is becoming more costly and more difficult. OTAs dominate the search space, and it has become impossibly expensive to pay for the level of PPC exposure most hotels need in order to compete. Hotels need every edge in direct exposure, which is why TrustYou provides hotels with tools not only to improve their reputation but also to improve Google rankings, which increases direct online bookings.
Trust, on the other hand, will differentiate a hotel from an OTA when it comes down to which site to press the “Book Now” button on. Generating trust with guests is about more than reputation, though obviously reputation is paramount. Trust also is a product of knowing that a hotel will honor the reservation in its original format, the hotel may offer perks or upgrades that the OTA will not, and the hotel will handle cancellations or problems with aplomb. Ultimately, travelers need to know that there’s value in having a relationship directly with your hotel, and this requires not only telling travelers via traditional marketing but also ensuring value is delivered each and every time they visit your hotel.