Maintaining and nurturing a strong partnership with OTAs will help hoteliers prepare for spikes in demand.
By Jason Q. Freed
With new COVID variants, fluctuating hospitalization rates, the opening and closing of international borders, changing local restrictions – the past two years have been nothing but a roller coaster for hoteliers trying to track demand and sell roomnights. The distribution situation has been fluid, to say the least: while hotels initially saw more direct traffic from travelers looking for updated guidance, they continue to rely on third-party distribution partners to reach new segments of travelers who are first to get back on the road.
Several industry experts recently took a deep dive into this evolving landscape in the HSMAI Greater New York webinar “Disruption and Recovery in Distribution,” moderated by Nicole Adair of SHR. Of particular importance was discussion of the ongoing collaboration between hotels and third-party OTA channels; an ever fragile equilibrium that has also recently been affected by the pandemic.
“Bottom line, in recent years we’ve had a base shift toward direct booking,” Adair said. “But now, since the pandemic we’re starting to see that level off, and shift back toward the OTAs.”
Managing OTA Relationships
The most pressing topic of conversation surrounded managing OTA partnerships in the post-COVID era, and how these relationships can change as the industry moves into the next phase of recovery. According to panelists, maintaining and nurturing a strong partnership with OTAs will help hoteliers prepare for spikes in demand.
“With borders starting to be relaxed quite a bit, it’s super important that we work very strongly with our hotel partners to ensure that we can really get ahead of the game and maximize the potential,” said Michele Vrod, regional manager with Booking.com. “There are different programs that can really help our partners find the right combination of products and services to accelerate recovery.”
Vrod explained it’s now crucial for hoteliers to focus on three key areas of their OTA relationships:
- Be flexible.
Due to the pandemic, many guests continue to demand flexible travel plans, including the ability to cancel or reschedule stays free of charge. It’s best to have a refund policy in place, as well as eliminating the need for deposits in advance.
- Go mobile.
Customer behavior has changed over the past year, with consumers relying more on digital platforms like mobile and tablet devices. So it’s more crucial than ever to ensure hotels are well represented on mobile handheld devices, with plenty of robust, up-to-date content to maximize visibility.
- Eliminate payment friction.
Be open to numerous payment offerings. For example, if a guest in the Netherlands prefers to use a bank transfer, that’s very common in their country. Not all guests own/use credit cards like the American consumer, so be sure to stress to different feeder markets that your hotels accept multiple payment methods, such as PayPal, Venmo and Apple Pay.
Converting Guests to Your Direct Websites
Many hoteliers question how much they should rely on OTAs for demand, in light of the commissions paid to these channels and the desire to ultimately convince guests to book direct. The consensus, however, was there’s still value in those third-party bookings, so hoteliers should welcome the business and work to convert OTA bookers for future stays.
“Previously, from an industry standpoint, we often looked at the third-party guest as the odd man out: We stuck them next to the elevator or the ice machine and ensured they didn’t have a great experience with us,” said Mike Medsker, president of Focal Revenue Solutions. “That dialogue really started to change a lot during the pandemic. Oftentimes when you are able to elevate the caliber of service that you’re providing to that OTA guest, they may look to come back to you directly the next time around.”
At higher accommodation levels, that may mean increasing the amount of contact and interaction between staff and guest, but in a proprietary manner that encourages that guest to cut out the middleman in the future. Hoteliers say that providing higher levels of care and personalization through hotel-run channels will be the key to bolstering loyalty in this new age of distribution.
“We start that communication or open line of dialogue and that personalization from the very beginning,” said Winnie Wang, director of revenue for The Fairmont Plaza in New York. “Once a guest books they’re able to chat directly with us and so whether it’s front office or reservations or concierge, it’s a seamless process of someone here physically on property assisting and ensuring that prior to the stay everything is set up right, whether it’s airport transport, nanny services, or a special amenity for a surprise proposal or anything like that. For the future, that really helps to build that bond.”
Rely on Data for Distribution Decisions
Headed into 2022, hoteliers have a good sense who the first travelers back will be: leisure travelers, mostly from local destinations. As restrictions are lifted and we can again cast a wider net, our third party distribution partners will continue to be a good source for incremental demand. Take the steps above to ensure you maintain those important relationships.