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Hotel Operators Vs. The OTAs

May 29, 2015 Corporate No Comments Print Print Email Email

Hotel operators constantly struggle to get direct bookings.

Updating their websites, customer service, booking platform and innovative products are some of the strategies by hotel operators feeling the effect of travelers using online travel agencies (OTAs) when booking a room.

For the major part, consumers feel they are getting better deal with OTAs such as Expedia, Orbitz, Travelocity, Booking, Agoda, etc.. But are they really?

For example, hotel operators can offer discounts and services that OTAs can’t, like: seniors discount, the nth night free, discounts for airline employees, groups staying x number of nights, free room upgrades, and other services that the hotel operator have direct control over, and that OTA’s don’t.

One hotel operator in Costa Rica, with two hotels, the Copacacabana Desire Hotel in Jaco beach, and Hotel Desire.

Costa Rica in San Jose, for example, is offering Canadians dollar at par to the US Dollar, and with no catch. That can represent more than a 25% savings to Canadian travelers.

Something that consumers don’t understand is the complexity for a hotel operator when bookings are done through an online travel agency, like changing dates or getting a refund, among others. This because in many cases the OTA has the consumer’s money and often is not paid to the hotel after 30 and even up to 45 days.

Paying an ontline travel agency is not necessarily paying a hotel directly. This can be problem by both the hotel operator and consumer. Let’s take a situation where the customer is not happy and looking for refund. The operator, not paid by the OTA faces a challenge, a hotel guest that has paid for a room he or she is not happy with and now wants a refund. A refund of money the hotel operator has yet to receive from the OTA.

And then there is the question of commissions. Hotels pay a lot of commissions to the OTAs. Booking directly allows the hotel operator – not having to pay say a 15% or up 35% commission on a booking – pass some of that back to their guest in lower pricing and/or added services.

Another misconception is that with OTAs one can always get better airfares, than booking directly with an airline. OTAs use the Google flight center to obtain the airfare rates to charge you. Most travelers have been so sold on the idea of using an online travel agency for best rates that they don’t realize that with Google Flight Center the consumer can go directly to it and can choose their flight from a simple list of results, explore destinations on a map, and find travel dates with the lowest fare with Flight Search.

OTAs also make lots of mistakes that are hard for the hotels to correct, with things like the pictures of rooms, amenities, beds and services. Hotel operators have to constantly monitor this (the OTAs), but changes take time, leaving the consumer with one impression and then faced with a different reality. Of course, the hotel operator has to deal with the problem on site that cannot be easily corrected – you can’t change to a room that doesn’t exist, or a service no longer or never offered.

Like the social media, a photo of a hotel room gone viral can lead to a disappointing experience. Checking the room photos and amenities on a hotel website is the answer. Hotel operators continually update their photos and services offered, giving the potential guest all they need to make a decision.
But then way not book with them directly while you are there?

So, why do hotel operators belong to a OTA?

The OTAs have done a great job at promoting their service and hotel rooms, a promotion that cannot be easily attained by a small hotel operator.

“It’s like making a deal with the devil, ” one hotel operator told me, who added that she wouldn’t belong to a OTA if she could, but the reality is that travelers have become convinced that using a OTA is the better deal, only later to find out that wasn’t the case, and on visiting the hotel, finding the hotel offered better rates.

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