9 OTA Diversions Which Ruin Your Profits
This article is reposted from Experience Hotel. The original article can be found here.
After years of working on the OTAs, today I can update the many tricks they use which directly affect the profits of your hotel.
These tricks are much more than simple “gimmicks”. They are, in fact, actual diversions to the detriment of your income and to the benefit of themselves.
The OTAs have virtually unlimited budgets and overwhelm you with their power. Yet, many hotels succeed in reining them in and do very well. The hotel owners who succeed know, and have applied, these 9 tricks with extreme precision.
The story of Bob the traveler
In order to illustrate this article and make it more lively, we will create a fictional character: Bob the traveler.
Bob, age 42, has decided to come to Cannes for one week with his wife and son. He does not know precisely where he intends to stay, but he knows that he wants to go during the month of July.
His search to find a hotel begins.
To more easily understand this article, I have simplified the customer’s typical experience.
They redirect your e-reputation
Bob’s first reaction is to check TripAdvisor to find his hotel. As he does not know how to get started, he will simply look at a few beautiful establishments on TripAdvisor.
After some research, he soon discovers a hotel which seems good to him and clicks on “View prices”. But there… great surprise, the prices displayed are those of Booking.com, Expedia.com, etc.!
OTA Trick: they take advantage of your efforts, usurp your various investments to obtain a beautiful e-reputation (customer service, quality of the hotel, friendliness of the staff, etc.) and position themselves directly on review sites like Trivago, TripAdvisor, Kayak, etc.
No advertising to do, just take the hand of your future customers at the time when they identify your hotel!
They redirect from your prices
After having clicked on “View prices”, Bob the traveler detects an interesting offer with a decent price on Booking. com. He therefore decides to learn more. He is then immediately attacked by shock announcements like: “Best Price Guarantee”, “The best offer for this hotel”, etc.
He therefore has the feeling of having found the best price. And yet, the barrage continues with messages giving him the impression that this offer will expire soon “Only 2 rooms”, “2 other people are in viewing this hotel”, etc. Bob is being ushered in a certain direction.
He is being urged to make his reservation instantly.
OTA Trick: While you probably have the best direct prices, they create a feeling of panic in the customer and push him to reserve his room immediately without taking the time to call you or to compare.
They divert your word of mouth reputation
27% of hotel bookings start from with word of mouth. It is therefore relevant to conclude that the “recommendations of others” are important. This figure is also supported by an observable constant: 56% of the searches for hotels will, at one time or another, pass through a site of online comments.
When Bob looks at the page of your hotel on Booking.com, he is immediately shown other hotels that some Internet users have also consulted or reserved.
OTA trick: Your future customer thinks that if other users have consulted the same hotel, then it means that they have similar tastes and desires. The recommendations of the OTA therefore take on value; and your future customer will trust them.
They redirect your brand
Bob seems to have made his choice. He has found a hotel that corresponds to his criteria of price, geographical location and quality. But you know, it is not every day that Bob travels to Cannes. He would therefore like to validate his selection a little more.
He therefore copies and pastes the name of the hotel on Google and will try to find other information about it. In a few clicks, the quantity of easily accessible information is impressive: photos, customer opinions, details, etc.
But, slight problem, the first returns displaying this information do not include your site. It displays your resellers.
OTA trick: 50% of Web surfers will search on Google for the name of the hotel they are viewing before from proceeding to a booking. By including your name in their AdWords campaign, OTAs annihilate all your chances of recovering your customers directly.
They divert your bookings
Despite all these incentives to book your competitors, Bob maintains his first point of view and finally reserves your hotel! But he has not done his reservation directly through your hotel. After his searching, he made his purchase on Booking.com.
Is this so serious? – You will ask me.
Yes and no. It is clear that you were able to obtain it directly, but at least you have finished by having the customer. And it is better to pay 15-25% commission on your room rather than not have the booking.
Nevertheless, another possible unforeseen development is that Bob will never come to your hotel. He may cancel his reservation and you will no longer hear anything from him.
OTA trick: In order to render “good service” to their customers, OTAs do not hesitate these days to send an email between the purchase and the arrival of your customer, informing him that he can get some very good deals in your city with “Free cancelation”.
The customer will not hesitate long before canceling his reservation in your hotel to make one with your competitor who is more “aggressive” on prices.
They divert your guest database
Let us take the case where Bob has not decided to cancel his reservation in your hotel. He will therefore arrive at your hotel within a few days. But his reservation, not having been made directly, leaves you very little means to enter into contact with him.
At best, you have a temporary email address provided by Booking.com and they only allow the messages they deem in agreement with their “policy”.
At worst, you have… NOTHING. Absolutely no way to contact your customer.
OTA trick: by making your customer book via their platform, the OTAs have taken charge and they keep it. Do not expect them to transmit the contact information to you. They take away the opportunity to communicate with your customers and, of course, do it for you, ensuring themselves a promising future. What a clever little trick! This is the first step to their building the loyalty of your customers.
They redirect your customer relationship
Because you have no way of contacting Bob, OTAs will be happy to substitute being the hotel in your place.
Whether before the stay, during or after, the OTAs will do the maximum to accompany your customer and offer him an extraordinary experience.
Reservation of a shuttle, proposal of restaurants around your hotel, quality control during stay, satisfaction inquiry, etc. You are deprived of your functions and services! But your customer, he is well treated as a prince by his dear OTA.
OTA trick: in accompanying and rendering service to your customer for the duration of his stay, the OTAs establish a strong and enduring relationship with each of your customers. They become the main center of information for your customer.
In the eyes of your customer, you may be nothing more than the rooms.
They redirect loyalty away from you
Bob leaves your hotel after a stay which has in fact gone very well. He is content and when Booking.com asks him to put a comment on your hotel, he does it and gives you a good rating.
A few days after having entered his rating, our Bob receives a very interesting email. He will discover that in registering with the XX OTA program, he will be able to benefit from the best rates on all its future reservations, or even free nights.
Bob welcomes this and decides to make all his future reservations directly through the OTA. He knows that he will thus be able to save money.
OTA trick: In the last 10 years, the cost of acquiring customers has been multiplied by 16 and is now 500% more expensive than the cost of loyalty. The OTAs understood well and play on this lever to strengthen their profits.
They do not skimp on the benefits they offer in order to win the loyalty of your customers.
They appropriate your customer follow-up
Bob’s life has resumed its course. He returned home with his wife and son. He has resumed his daily routines and already dreams of his next holiday.
To prepare for this new journey, he is going to be very regularly helped and requested by the OTA through which he had made his first booking. They will send him ideas of a stay, hotel promotions and other e-mailings inviting him to once again use their platform.
After several months of this continuous hammering, Bob decides to finalize his next stay. It turns on his computer, opens the Internet, goes on Google and types “Booking.com”.
You just permanently lost your customer! And with him… a good part of your profits!
OTA trick: why do OTAs do so much emailing? Because they know at what point and how much it pays off! They know that today it is one of the best ways to increase their profits.
They may well spend a fortune to acquire a new customer. This is not important to them because they will recoup the benefit through an intensive customer follow up inviting them to retain their platform.
These 9 tricks do not seem so incredible when you read them. There is nothing mystical or magical. There is nothing complicated. Your customers are encouraged, by a series of intelligently built diversions, to book on a site billing you for commissions. The victim of this con game is you, dear hotel operators. BUT…there is good news for YOU!
There are 9 extremely simple means to be implemented to regain control of your customers and recover the money that you lose.
Some of these tricks you can implement by yourself and others will require the assistance of good suppliers. Nevertheless, you must learn them in order to be able to choose with whom and how you work.
Infographic to share
Tired of paying huge commissions to the OTAs? Contact us to start changing that today.