Turning on and off the OTA Faucet

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Every component of hotel revenue can be measured and evaluated.

By mastering each component, the revenue manager influences the hotels destiny by understanding how to stimulate hotel demand.

Today I’d like to discuss On-line Travel Agent, Meta Sites and Opinion Sites.  The latter two, of course feed into OTA sites.

Let us assume that price, restrictions, content, pictures and amenities have been input satisfactorily and are conducive to potential guests looking for a hotel.

The only thing that remains then is being able to place “Your Hotel” in front of potential guests for consideration. Your consistent presence on the first page along with higher placement on that page carries great influence.

The model used below is that of a real hotel, data for which was taken yesterday.

Results can be viewed in different ways.  No two hotels would view these the same way.  If Your Hotel is bringing in a satisfactory contribution of OTA business, while having maintained the positions below, they would be considered satisfactory.  If, however, additional OTA business is desired, than interaction with certain site market managers could influence your position.

It is always good to touch base and maintain good relations with each sites market manager.  Visiting local offices, and perhaps even bringing in lunch for all those that are working so hard toward your success is a nice consideration!  Don’t overlook or underestimate it!

The results that follow are the positions Your Hotel achieved yesterday.

The column labeled “Average Position” is the combined result of polling that took place, first at 11am and then at 8pm.

The full report included 3 additional OTA’s that are not shown on the above report.  Certain anomalies are adjusted by Revenue Report Card.  It is important to remember that 90% of all hotel bookings come from the sites first page.  Needless to say, the higher the position, the better.

Each of the Opinion and Meta Sites, shown above, have attributes that make them more or less conducive to “Your Hotel”.  Global Rank, United States rank (for USA hotels), average page views and time engaged on the site are critical factors showing popularity and each sites ability to engage your potential guests.

If your hotel typically entertains guests from countries shown above, those specific sites above should be in your focus and “Your Hotels” presence and position noted.

“Education” (as a pinpointing factor) could be viewed as an economic indicator.  You can see that certain sites show high engagement of those completing graduate studies and undergraduate studies.  Others have higher concentrations of No College or Some College.  If you believe that this information has value in identifying the type of guest that is best suited for “Your Hotel”, focus should be given to presence and position on those sites.

High volume On-line Travel Agents shown above, also have characteristics that may be well suited to “Your Hotel”.

Needless to say, commission cost is a Key Performance Indicator that should be added to the study above.  The majority of OTA sites use the Merchant Model form of payment, although several have adapted the “Direct Pay” method.  Commission in both “direct pay” and “merchant model” typically run in a range of 15% to 31%.  The NORM would fall between 15% and 22%.

Labor/effort is another component that should be taken into consideration when evaluating OTA Channel Cost.  This variable can be effected if “Your Hotel” provides OTA’s with a direct connection to inventory.  Blocking rooms can be done automatically or with human intervention.  Required documentation at check in for international as apposed domestic guests is another factor.  Any and all labor right up until the guest checks in creates OTA channel cost.

Please keep in mind that what you’ve viewed above is merely a picture in time of ONE DAY.  The study gains more value when monitored over time and you will obtain a better understanding of the generation of reservations from each site.

Site algorithms react positively or negatively to certain occurring stimuli.  If you’ve recently fallen off in position, you might look at rate parity or availability.

Further advance your position through priority offerings or specials.  Keep in mind, however, that specials usually bring a hidden additional charge by the OTA.  Unsuspecting DOS’s and/or Revenue Managers can be caught off guard believing that the same commission is being charged when a special is turned on.  The mathematics change.  Have your accounting department do a quick check the next time your OTA is pushing you hard to engage in a special.  Perhaps you will gain a different understanding of why the big push!  Surely surprises will follow!

You can view the summary, shown below, on notes to this specific hotel.

Whether you desire more or less business from OTA’s is a hotel-by-hotel decision.  Position that creates exposure is simply a matter of knowing how to turn on and off the facet!  If you know how…. You can navigate the flow!

Source: LinkedIn

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