OTAs vs. Direct Bookings: Why Do Hotels Need Both?

While most owners prefer direct bookings over OTAs (online travel agencies), you need both of them to be successful. As more than 80% of travellers make their reservations online, any platform that will increase your digital visibility, returns to your hotel as occupancy. Let’s dive more into the benefits of finding the right balance between the two to maximise your revenue.

What are the benefits of OTA’s vs. Direct Bookings?

Online travel agencies (OTAs) like Expedia and Booking.com have changed the hospitality sector for good. Most hoteliers and B&B-owners have a love-hate relationship with them due to the rising commission rates but also the great possibilities they offer. One thing is certain, OTAs are here to stay. Market research showed that in 2022, almost 70% of the respondents prefer to book on OTAs. So the real question is not whether you should use them or not, but how to make the most out of them. 

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OTAs increase your exposure and ability to fill rooms last minute like no other. Other than helping you get more bookings, OTAs bring many other benefits to consider in your strategy. 

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Rate & Review tools on OTAs are important in passengers' decision-making processes since 95% of travellers read reviews before making a hotel reservation, according to a TrustYou survey. This way it is easy for you to display your great service and attract more visitors.

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On top of that most OTAs provide rich tools including detailed statistics about the visitors of your listing. This is valuable information to find and target the right audience to increase your bookings 

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However the commissions keep rising on OTAs and many hotel owners become more concerned about their relationship with their guests. OTA’s take away parts of the personal contact that happened with clients before booking. That is why you need OTAs, but you can’t solely rely on them either.

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What are the benefits of Direct Bookings?

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Direct bookings are reservations made directly with the hotel itself, through the website or by phone. The biggest benefit of this kind of booking is of course that you don’t have to pay any commissions on them. 

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But direct bookings also have other important benefits. Reservations made in this way give the customer the feeling of receiving a more personalised service. Therefore, customer satisfaction and conversion rates are high in direct bookings. Similarly, the research shows that 90% of all travellers want a personalised experience when they book a hotel.

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Recently these benefits motivated some large chains to increase direct versus OTA bookings. One example is the famous Hilton chain. The chain launched new loyalty programs and other book direct campaigns to increase direct bookings.  One of those campaigns you might have come across was the “Stop clicking around” campaign. However most hoteliers don’t have the marketing budget or brand awareness to follow their footsteps. 

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That is why this blog dives into the question of how you can effectively use both booking strategies in the best way possible.

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What is the best way to combine OTAs and Direct Bookings to increase your revenue?

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In the fast-moving travel industry, we recommend that hoteliers favour these two reservation areas both together. Online travel agencies and direct bookings compliment each other in the booking process. 

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The Billboard effect

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One very important phenomenon to benefit from is the Billboard effect. ​The Billboard Effect happens when potential guests come across an accommodation listing on Online Travel Agencies (OTAs), but do not immediately book. Instead, they visit the property's direct website to gather more information about the property, amenities, and room rates before making their final booking decision. 

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This happens because your hotel's website gives them a better understanding of your special offers, and direct booking benefits. Research from Otamiser shows that 65% of all direct bookings come from guests who found a property through an OTA, while 18% of direct bookings use the OTA to make inquiries. To learn more about this powerful effect, go to our blog. This shows how your efforts on OTAs and stimulating more direct bookings can go hand in hand. 

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Rank high on the OTAs

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To really reap the fruits from a good booking strategy, you need to rank high on the OTAs. This was proven by a study (Expedia survey, 2023) that showed that 75% of people book a stay in the first 15 views on an Online Travel Agency (OTA) and Booking.com even estimates that 80% to as many as 90% of bookings made come from the first page of the listing. 

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There are many ways to improve your listing, but the most effective way to make sure to rank as high as possible is to use a ranking management solution. The impact of implementing such a solution increases the revenue of hotels and rental properties with on average 24 percent. And the best thing about this is that you don’t have to spend any time on it. takes care of your ranking so that you can focus on the other important aspects of running a hotel. 

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Convert OTA bookings to Direct Bookings

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We already talked about the importance of the billboard effect, but you can also take action to convert OTA bookings to direct bookings. There are a couple of proven strategies that can make a big difference. 

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The first easy but essential step to make it as easy as possible for visitors to book through your website. The first button they should see is the “Book Now” button. And there should not be only one, use plenty across the website to grab the attention of the visitor in every stage of their decision-making process. Also make it very visible that your website offers better rates and more possibilities for guests than the OTA’s. 

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Make sure that every guest who booked via an OTA is convinced to book their next visit directly. The best way to do this is by offering promotions or discounts. For example you can give them a guarantee of offering the lowest rates on your website. You could also create a loyalty program with exclusive benefits, discounts, or complimentary services. You can ask the email of all of your OTA guests and create an email campaign to not miss out on this opportunity. 

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Tips & Recommendations

Let’s summarise the key take-aways of this blog. 

• Combine OTAs and direct bookings
• Use the Billboard effect to your advantage
• Rank high on OTAs through a ranking management solution
• Make it easy to book through your website
• Target OTA visitors to book through your website in the future via email campaigns
• Use promotions and discounts

These tactics will definitely help you find the best balance between direct bookings and OTAs. But if you would like to talk to experts to help you, don't hesitate to book a call with the Otamiser team. 

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And be sure to subscribe to our newsletter for more tips about improving your revenue as a hotel or property owner. 

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Good luck!