Ask a hotelier if they would spend marketing dollars on an Online Travel Agency or a Global Distribution System, and you’ll likely hear “why would I pay them more than I already do?” Understandably, many hoteliers feel that between net rates, commissions and segment fees, their distributors are already being handsomely rewarded.
In most markets, however, sales channels like OTAs have many hotels that they can serve up to their users, and the sort order is largely at their discretion. So finding ways to stand out from your competitors inside of these marketplaces can be critical to shifting share to your property. In addition to the table stakes -- like compelling images and competitive pricing -- you must also ensure you are in the consideration set of your target customers in the first place.
In fact, marketing through a sales channel like an OTA or GDS can be an extremely effective way to secure incremental bookings, provided that certain conditions are met -- in particular, that the marketing program delivers timing, transparency, and targeting.
The first is to be certain you get in front of potential buyers at the right time. This may seem self-evident, but the marketing landscape abounds with tenuous claims of relevance and timing. My advice is to be directly in the booking path at exactly the moment when someone is searching in your market. That’s as relevant and timely as you can get.
Second, you want the ability to transparently manage your spend and monitor its performance, ideally via a cost-per-click (CPC) auction model. With CPC models, you can set bid ceilings, spending limits, and have clear visibility into how your campaigns are working.
Last, you want to be able to target specific needs periods. Hotel sold out in July? You should not be forced to spend on consumers wanting to check in then. With the ability to limit your marketing to dates when you have availability, it’s relatively straightforward to manage to an acceptable ROI.
This isn’t a utopian future state. In the past couple of years, leading OTAs have added programs where hotels can secure the top search results via a CPC model. And thousands of hotels are taking advantage of the opportunity. Lee Byrd from JHM Hotels described it as follows:
"The OTAs have landed on the right solution. Being able to secure the top search result when I need it -- and only paying when I get clicked -- works for us. It’s spend that I can manage tightly and so I don’t get hung up on philosophical objections about paying more to a commissioned sales channel. This is money I’d gladly spend somewhere else to fill up room -- it just happens that it’s an OTA that has provided me with the means."
Good news for hoteliers is that these types of programs are easy to test. A hotel can dip a toe in, see the results, and then proceed or not as they see fit.
So…. know your target ROI, and then go after it. Don’t assume that existing distribution relationships are performing as well as they could. With intelligently deployed marketing spend, you can increase your bookings from OTAs -- and hit your target ROI.