Why OTAs really want you to give them exclusive mobile rates

Jul 27

You might have noticed that since the start of the year OTAs have been really pushing you (Revenue Managers) to give them special rates for mobile. You have probably seen this supported with graphs and statistics showing the importance of mobile bookings since COVID hit, and how people have moved to Mobile devices for bookings.

The numbers don’t add up!

We conducted our own analysis for our Client set in Europe and we did not see the same shift in booking to mobile, in fact what we saw pretty much confirmed what one might conclude using common sense – when people were at home on a COVID lockdown they used their mobile phone because they weren’t on their computer at work! In fact, when we went on to look at booking trends, we found that even if mobile accesses increased for booking, the finally booking device more or less stayed the same: IE a computer or tablet.

Why do OTAs have different data? Cookie-less tracking and impact?

Since the start of the year browser manufacturers – most notably Apple’s Safari – have been making changes that make it much more difficult for OTAs to track campaigns, and determine with equal precision how much revenue they have delivered. In other words [even if digital marketing campaigns are still delivering the revenues they always have] it is much harder to measure them with the same degree of efficiency in 2021.

OTAs are incentivizing new channels of acquisition but killing your own loyalty!

For us OTAs have created a convenient illusion of a seismic shift to mobile for booking that we don’t see in the data, and that hotels need to take advantage and cash in on this change in user habits. Due to the absolute need for hotels to get cashflow because of the COVID effect, Revenue Managers are being approached and asked, sometimes quite strongly, to offer special discounts for mobile bookings, which are then being shown by OTAs in the form of incentives to encourage people to download their apps, and capture your direct bookers.

Source: https://www.expedia.com/p/info-mobile/app.htm [last accessed 26/07/2021]

Source: Link https://www.booking.com/apps.en-gb.html [last accessed 27/07/2021]

These exclusive discounts, whether in the form of special rates, or an increase in the commission being given to OTAs for each booking on a mobile device, are providing the benefits OTAs need to increase their customer acquisition, loyalty programme appeal, and provide unique appeal in the online advertising channels (read: making your own hotel ad look weak when seen alongside an OTA).

OTAs are in a crazy dash for customer acquisition because they know their days are numbered!

If an OTA can get a person to install an app onto their phone, they can start sending push notifications, incentivize the sharing of the app with a customer’s friends (either in return for points or for discounts on future bookings) and all of this can be done within a platform that is not adversely affected by the security measures in current browsers.

Is good for me in fact better for you?

It doesn’t really matter who you point the finger at in the digital space, every major online provider of a service that seeks to help businesses sell more online will wrap into their ranking mechanism an element of immeasurability, that you will have to take on trust. Zoomed out we see this more broadly in advertising networks that use a “relevance score” to frame whether or not an advert is actually considered ‘good’ or not. The problem is that a Client’s good (lots of revenue) is different from an advertising networks good (lots of ad-clicks and advertising spend), and so a digital marketing service provider needs to be really aware of the whole advertising universe to be able to navigate it and get the best for their Clients. This specialised experience is what we provide for our Clients.

OTAs promising “enhanced visibility” on the network

Lots of providers in the OTA space use their own internal data to sell you the benefits, so we hear things like “enhanced visibility” which might in real-terms translate as an extra icon in your listing pages, which will then become almost invisible to a user looks at those pages because all they are gong to be looking at is a benefit, price and a book now button on the OTA.

OTAs will not kick you, their best revenue channels

If your hotel has traditionally paid big commissions to OTAs it means that you are a ‘good customer’ so the idea that by not participating in some incentivized scheme your bookings will drop-off is simply playing into those fears, that they are so good at doing. Don’t succumb to this, where you have that choice.

Take aways - Don’t believe the hype

OTAs deliver revenue and are key players to overall the revenue mix for any successful large luxury hotel. You’ll never hear an OTA admitting this but their historic customer acquisition model is on the ropes, and what we see is a mad dash to capture and expand their customer network as quickly as possible before they have to spend money on advertising campaigns that can’t be measured or optimised in the same way as before (For an OTA ‘we don’t know if this campaign is actually delivering value!’)

Where possible, and we acknowledge that for most hotels after COVID they are happy to take revenue at any cost just so long as it comes in, don’t provide incentivized booking benefits for mobile devices and make your own direct booking channel look worthless, because if someone was going to book your hotel, they will still book your hotel on their desktop or tablet. Just make sure your price and unique appeal is there when you book direct.

You are the definition of the hospitality experience, not an OTA

When all is said and done no OTA on earth will be able to compete with the care and hospitality experience your team are able to provide a guest, so don’t give OTAs extra discounts and benefits and instead capture and convert that guest yourself through your own digital marketing campaigns. The guest will thank you for it as will your bottom line.

About the Author

Glyn Spencer Hopkins is the owner of Internet Affected and has been working exclusively with hotels for over a decade.

Internet Affected provides web marketing services tailored to the individual personalities of hotels; a complete range of digital services designed to help them take back ownership of their hotel brand from the OTAs. Specialized marketing solutions to increase guest loyalty, food & beverage bookings, events and wedding inquiries, clearly reported in straightforward language.