Why is an online travel agency (OTA) necessary?
OTA is an acronym that stands for Online Travel Agency. They represent third-party agencies that resell vacation packages, flights, hotels, and other services that have been given or organized by others.
In short, online travel agencies (OTAs) are businesses whose websites let customers book different travel-related services online directly.
Alternative Distribution System (ADS) and Internet Distribution System (IDS) are two terms most often used to describe OTA.
What is the purpose of an Online Travel Agency (OTA)?
Because they offer a simple option for customers to compare hotels and book them online, from the comfort of their own home or while on the go, online travel agencies, or OTAs for short, have grown in significance within the hotel business. Additionally, working with an Online Travel Agency (OTA) not only allows you to reach more travelers globally, but also allows you to engage them as they are researching, planning, and booking their next trip.
Learn more about online travel agencies in this post, along with the top channels to use to enhance the volume of hotel reservations you generate from clients.
How do Online Travel Agents operate?
OTAs typically support two models.
1. Merchant Model
In this business model, hotels offer discounted or wholesale rates to OTAs when selling rooms. Then, the OTA prices them up and sells them to the consumer.
2. Agency Model
In this commission-based business model, OTAs serve as a partner in distribution. The full commission is paid to OTAs after the stay has actually taken place. Instead of waiting for a payment transfer from a third-party distributor, the hotel receives payment directly from the end user.
How do hotels and OTAs collaborate?
Hotels of all sizes, including bed and breakfasts, inns, and ryokans, sign agreements to list their properties on an OTA. There are no upfront costs associated with listing rooms in the marketplace. By taking a cut of the total cost of each secured reservation, OTAs only profit when rooms are reserved.
The OTA offers options to showcase rooms and properties through amenity descriptions, images, surrounding sites of interest, and more. Travelers looking for accommodations in the area will see the listings. The OTA will match the travel requirements with the information provided by the hotel, displaying the hotels that fit best. Travelers can also apply filters to narrow their searches, such as just looking for pools, free Wi-Fi, or air conditioning.
In conclusion, Online Travel Agencies offer a safe booking environment and serve as the customer’s primary point of contact for modifications and cancellations of reservations. OTAs offer a range of free tools to support the performance of its partners, including tools for managing reviews and real-time access to market data.
List of top online travel agencies
Knowing who the major companies are is crucial because there are literally hundreds of online travel agencies where customers can book hotels and other services. It could also be helpful to be aware of some of the more specialized OTAs that serve particular traveler personas or are local to your area. One company that specializes in boutique and premium residences is Mr. & Mrs. Smith.
Other most popular OTAs for travelers are:
- Booking.com (Global leader)
- Expedia (Good for packages)
- Agoda (Popular in Asia)
- Lastminute.com (Popular in Europe)
- Skyscanner (Budget travelers)
- TripAdvisor (Reviews)
- Hotels.com (Rewards frequent travelers)
- Priceline.com (Discount travel)
- HRS.com (Strong with business travelers)
- Airbnb (Unique properties)
What benefits do Online Travel Agencies offer as partners?
Simply put exposure! Thousands of people from all around the world visit the websites of online travel agencies. Furthermore, they have established themselves as an authority on all things travel-related. People, therefore, believe the advice they get from OTAs.
In addition to reaching a large audience, hotels that list in OTAs will also have their services included alongside many other trustworthy sources of information.
Additionally, the so-called “billboard effect” may work in favor of hotels that are featured on OTAs. This indicates that on their platforms, OTAs offer a sort of advertising for service providers like hotels. Once the user is aware of this, they might even visit the hotel’s website to make a direct reservation.
What factors should you take into account when selecting an OTA?
1. Who is their target audience?
Many OTAs target specific demographics. Consider the region and market segment you want to target, as well as whether an OTA caters to this audience.
2. What is the visitor’s experience like?
Examine their traveler-facing websites to get a sense of how your potential guests search, browse, and book.
3. What features do they provide to partners?
Each OTA has a unique set of tools and analytics to assist with revenue management, pricing decisions, and property promotion.
Another factor to consider is whether or not an OTA integrates with your channel manager.
How to effectively manage your hotel’s OTA profile
OTAs, like search engines like Google, have their own algorithms for how your property will rank, which means you should pay close attention to the following tips:
- Create and maintain accurate inventory management – Because the availability of your rooms will fluctuate due to peak periods or seasonal changes, you must keep an accurate inventory across all OTAs to maintain a high occupancy rate;
- Manage your rates and promotions cleverly – If you have time-sensitive promotions, they will be more likely to be noticed, and you will be able to sell the remaining rooms more easily;
- Identify your competitors – In order to avoid significantly underselling or overselling your rooms, it is crucial to understand who the similar players in your market are;
- Focus on specific markets – Narrowing down your targets means affecting fewer customers, but it also means you’re more likely to secure the bookings you want if you use specific time periods, events, geo-targeting, or other strategies to specifically target audiences;
- Take into account paid advertising – While paid advertising does not guarantee more bookings, it will help keep your property in the forefront of people’s minds. If your content and visual appeal are both strong, you should see an increase in revenue and OTA ranking;
- Respond to reviews with care – OTA reviews are traditionally trustworthy because guests can only leave a review after staying at the property.
Need advice on the expansion of your hotel’s business?
Click and Book Travel is a hotel service company with 10+ years of experience in over 1500+ hotels across 50 countries.
If you need any help to create, design, maintain, and market an OTA profile, please feel free to contact our travel experts at Click and Book Travel.
Contact form: https://clickandbooktravel.rs/contact/