OTAs are in the hot seat of the hotel profession. Well Named. What follows will undoubtedly annoy at first glance many hoteliers who gladly throw stones at OTAs. But take care to read on and you will judge this point of view from this other look at online travel agencies.

OTAs, we can look at them in many ways with views often opposed to each other. On their own , they do not go into detail. The hotel industry and other tourist accommodation are their merchandise and they are there to sell and earn good revenue. And they are veryeffective at that. Priceline.com, which owns Booking.com , achieves an average daily turnover of $ 14.3 million. Its competitors, Expedia and other online travel agencies, are no exception. In time to write this sentence, tens of thousands of transactions have taken place between these sites and travelers for their travel and hotel reservations.

On the other side, we find the hoteliers who are now bathing in an ocean of tension. OTAs are so powerful – unheard of in tourism! – that the hosts ended up wondering if they were not becoming their subject. It is therefore more and more common for reservations made through OTAs to represent up to 40% of the volumes of rooms rented, even if we remain within an estimated average of around 20%, which is already enormous.

In this proportion, a mid-range hotel with 50 rooms, with an occupancy rate of 55%, will pay OTAs a total annual commission (set at 17% on the accommodation turnover including VAT, but this can climb to more) of nearly € 37,000 . A manna. This is the average annual salary of a salesperson, charges included …

If these commission amounts are high, over the years hoteliers have seen their boat take on new and additional constraints that OTAs unilaterally slide into their contracts. It is with good reason that hotel owners complain about all the inequity in their relations with these intermediaries, who keep inventing new schemes to get rich off their backs. There is no point in drawing up an inventory of the obligations imposed on them by OTAs, as we know them so well: commissions fixed on prices including all taxes, price parity, availability parity, upheaval in listings, appropriation of the commercial name of hotels, biased rankings, hotel websites fake, e tc.Read Aude Lenoir’s article on the subject.

In this area, the OTAs deserve the palm hands down, with the congratulations of the jury, for the imagination they deploy to inflate their bank account. So much so that hoteliers are totally torn between:

– the strong desire – and that we can understand – to escape the influence of online travel agencies to find peace, but with the feared or proven risk of losing many reservations, 
– and the need to ‘stay there, even if it means paying dearly for this choice or “no choice”, depending on how you see it.

At best, some are trying to limit the volume of rented rooms granted to OTAs to 10%, but again with the risk of being boycotted and therefore badly sold by the latter in retaliation.

The truth from hotel guests

Finally, and this is undoubtedly the most important, we must look at OTAs from the side of the hotel customers who use them . Some fundamental data , which strikes the minds , collected by Coach Omnium through several customer studies are instructive to understand how to identify the commercial impact of online travel agencies:

  • 93% of customers regularly or occasionally search the Internet for hotels to stay.
  • 83% of Internet travelers search for a hotel by keywords on Google, at 99%, and necessarily fall on OTAs sites in the front line of search engines.
  • 73% of customers place in st , 2 e or 3 e reflex by OTA in their hotel search, in which first broad Booking.
  • Finally, in their research, 80% of Internet users do not go beyond the first page of responses from Google and 20% do not go beyond the second page. This shows how important it is to be there, especially on the first page.

OTAs are therefore essential and grab hotel customers like a huge vacuum cleaner on an anthill. It is difficult to counter them and if necessary, to do so, it is expensive. As a result, 42% of travelers book regularly or occasionally via OTAs , and this share rises month after month, knowing that more generally 90% of hotel customers book a room before making a trip compared to 60% in 2009 (there are fewer and fewer passing customers).

However, if this hegemony legitimately scares hoteliers who see it as a dangerous commercial dependence , we can take another look at this situation for the benefit of the independents .

First, if OTAs do not generate excess hotel demand on the market – the proof is that the overall occupancy rates of the French hotel industry have been more or less the same for years -, they have a role of act of regulator and distributor of reservations . In short, they take or divert, without necessarily wanting to, through the large choice of accommodation they offer, from overnight stays to integrated hotel chains.

The latter, despite the disappearance of 1,900 independent hotels in France in 3 years and with roughly the same number of hotels as far as they are concerned, have gone from 54% market share in 2011 to 47% today ( in rented rooms).

This phenomenon must be understood as being both due to the very wide range of hotels that OTAs offer and their frenzied presence on the Net, and as being due at the same time to the behavior of hotel guests. Thus, in 2005, according to studies by Coach Omnium , 21% of business customers and 38% of leisure customers had no preferences between chains and independents . They are now 62% and 78% respectively. When they search for hotels on Google, customers are quite open when they aim for a destination and do not necessarily fix the type of hotel in advance, unless they respect a maximum budget not to be exceeded, or even a location (city center, near a road or an airport, etc. .).

This is the reason why independent hotels – without realizing it – are starting to take their revenge after having for so many years bowed to the commercial power of the chains. OTAs, again without doing it on purpose, offer them this chance, when we know that so many travelers in preparation for their hotel stays fall in their nets and turn to diversity.

Finally, since nearly 2/3 of independent hotel sites do not offer the possibility of booking online in real time (which scares off many customers) and where 4 out of 5 hoteliers only have passive marketing for their establishment, if any, we can think that the abandonment in the arms of OTAs can be a solution for these wait-and-see salesmen. In something, woe is good.

Obviously, this is not a panacea. This “chance” is only valid for hoteliers who do nothing commercially for lack of time, knowledge of the subject and / or means, according to their own statements to justify such a deficiency in sales.   

We obviously recommend that they try to make the effort to limit breakage, by taking charge of their independent presence on the Net and by equipping themselves with the means to make customers want to go live. For that, you need an attractive, seller and rewarding site, equipped with an effective online reservation system. You need a good e-reputation and efficient SEO. Especially.

Whatever the case, it is certain that the profession will have to find the strength to change the OTAs in their unhealthy practices vis-à-vis hoteliers. But in the meantime, the truth is coming from the customers, who will always have the final say and for whom these online travel agencies are convenient, fast and reliable, according to what they say abundantly.

 Also read:

OTAs pervert the business model of hotel chains

Hotel customers and their online purchases

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