At one point, Online Travel Agencies (OTAs) played a key role in the initial booking process for travelers – being the first online destination for securing a room.
But, are the times changing?
It turns out that OTAs are playing a much smaller role in booking a room with numbers declining as the entry point to the booking process.
Over the last few years, World Independent Hotels Promotion (WIHP) has been analyzing where direct bookings come from and how guests heard about the hotel they booked.
This year’s survey had a surprising finding. While TripAdvisor was 2013’s first position in how guests booked hotels, this year recommendations from friends and family took first position.
While OTAs are still high at 16.2 percent, the numbers are declining, which could be an indication that the hotel industry’s strategy to retain guests is working.
“Considering that Priceline reports that 30 percent of its revenue is spent on marketing, it arguably needs optimize this as much as possible to retain visitors and ensure it remains the ‘first port of call’ in the hotel ecosystem,” said Martin Soler, vice president of marketing at WIHP.
By building loyalty, hotel brands are beginning to beat OTAs at the current price war with guests. As such, we are seeing that many travel searches now include a brand’s name in the search string, which is an indicator of loyalty.
But are OTAs headed out to pasture? Not necessarily. OTAs are still being used to research hotel properties, just not to book the actual stay.
The bottom line is that hotel brands must be doing a few things right. By being price competitive with OTAs, while also increasing Search Engine Optimization (SEO) efforts, hoteliers are slowly chipping away at OTAs.
Again, the largest factor is that hotel recommendations are coming from friends and family. This means that guest loyalty is increasing, and word-of-mouth is driving more bookings – something that OTAs can never achieve.