Today, the digital revolution is leading to a change in purchasing behaviour and therefore in distribution channels. Accommodation providers have already experienced this modernization with the arrival of OTAs (Online Travel Agencies), such as Booking or Expedia.
The launch of OTAs in the accommodation market has profoundly changed their habits and customs. At first, their arrival was perceived as advantageous, but as time went by, many accommodation providers were disillusioned. Some structures found themselves closing their doors because of too much competition or because of commissions that became too expensive.
Overview: the impact of OTAs on accommodation
OTAs rank accommodation by price. In this way, prices are driven down and competition is intensified. This has a negative impact on the financial sustainability of hotels and B&Bs, which see their margins shrink.
Added to this is the variable cost of commissions which is often revised upwards, negatively impacting profits. Between 2008 and 2012, OTA commissions increased by an average of 28 %.[1] For hoteliers, the increase in commissions has been greater than the increase in occupancy of their properties!
These booking sites have a lot of leeway to change and impose their terms and conditions. This is due to their monopoly position and their ability to attract customers to their website. This is how parity clauses were introduced, preventing hoteliers from charging lower prices on their other distribution channels than on the booking platforms. With this clause, accommodation providers could not offer a lower rate on a "direct" booking than on a booking via an OTA. This situation asphyxiated accommodation providers, prompting major players such as the AccorHotels group to take Booking to the competition authority to regulate online booking centres. This led in 2015 to the Macron law, which simply cancelled these parity clauses for hotels.
It is also important to consider that the pain is greater for smaller hotels than for larger ones. On average, a hotel with over 100 rooms spends 2.5 % of its revenue on OTAs. While a structure with less than 100 rooms spends about 10 % of its revenue on them.
Our recommendations for the proper use of OTAs
They represent both undeniable sales opportunities, but also threats. It is important to use these tools wisely: don't be too dependent on them, use them to increase your visibility and take advantage of them for your other distribution channels.
We advise you to limit and control the activity that goes through these platforms, by not exceeding a threshold of 30 % of bookings through this type of intermediary. The danger is that if you go exclusively through a central booking office you take various risks: change of contract, price increase, etc.
Try to use OTAs as the starting point for a ripple effect. That is, once a potential client has found your presence on an online agency, they should be able to find you easily through your website. It is essential to have the same business name on the OTAs and on your website to facilitate the search of the client who would like to contact you directly. This way, you can avoid paying a commission for the online booking directory.
It is also important to have a well-referenced site adapted to a consultation from smartphones. You can also create a "Google my business" page, which in addition to giving the main information on your structure can gain visibility. Social networks are also an asset provided that it is updated regularly.
Don't give up on live bookings !
Live bookings allow you to reap the full benefits of your business and to stay close to your customers. However, it is more difficult to secure bookings simply and efficiently and therefore to prevent cancellations. It is to answer these problems that Swikly was invented!
With SwiklyYou can secure any type of booking with online deposit requests.
If you take your reservations in person, you just have to enter the email and phone number of your customer on swikly.com in order to send your digital deposit request.
Swikly offers the possibility to be integrated on your website in case you take your reservations online. So, when your customer books on your website, he automatically fills in his bank imprint and your rental is secure!
In both cases, the bank imprint only results in a direct debit if your customer cancels at the last minute. He is therefore protected from an unjustified debit and you can continue to use the usual means of collection.
Would you like to request a secure online payment? This is also possible. With Swiklyyour trusted third party, you benefit from a reinforced payment guarantee.
1] According to a study by Deloitte-In Extenso THR
