Another Perspective on the OTA Argument By Chris PatridgeTue, 18 October 2011
This article is a response to the following articles on the same subject: "In Defence of OTAs - Why They Are Critical for Hotels, Especially Independent and Boutique Hotels" and "No Defense for the OTAs".
There has been a great deal of controversy in recent weeks about the OTAs. Are they good or bad for hotels? Are they money-grubbing businesses, only looking tosteal your customers and revenues, or do they offer beneficial marketing opportunities that make the high commission rates worthwhile? Thus far, no consensus has been reached so I would like to present my thoughts on the issue.
In my opinion, the OTAs are a necessary evil, although not for all hotels. For flagged properties that already benefit from the brand association and increased marketing reach of the chain, the OTAs aren't completely necessary. Yes, they may miss out on some bookings but in reality, the brand name to which they are associated will bring in a lot more business than a simple OTA profile ever will.
On the other hand, independent and boutique properties do need to take advantage of the OTAs. Because these properties are not associated with a strong brand name (in most cases) and because they are not able to spend the huge amounts of money on marketing that the chains do, OTAs should be an important part of their revenue and distribution strategies. OTAs give boutiques increased online presence and visibility to potential customers – referred to as "the billboard effect" – increasing their bookings drastically.
There is, however, one type of OTA that is completely necessary for both flagged and independent hotels – opaque OTA channels.
When hoteliers hear the words 'opaque channel', most think of sites like Priceline and Hotwire, where consumers find out which property they are actually booking only after paying for their reservation. While these sites are traditionally defined as opaque channels, I would suggest that these are not the only opaque channels. In my opinion, opaque channels are also those that offer consumers the ability to book travel packages (air + hotel and air + hotel + rental car) like Expedia's Vacation Packages, and those like BackBid that offer hotels the ability to offer private pricing tailored to specificconsumers' travel preferences.
Opaque channels (according to my definition) offer many benefits for all hotels. Sites like BackBid don't undermine a property's brand like traditional OTAs often do. Opaque channels remove the necessity to adhere to rate parity agreements. Because many opaque channels do not publish rates online (instead they send them directly to a traveler's inbox), it avoids the issue altogether. And the big benefit – unlike traditional OTAs, opaque channels do not necessitate rash discounting (or any discounting at all!); instead, these channels offer hotels the ability to increase their market share based on offering value, not simply a lower rate.
Do you agree or disagree? I would love to hear your thoughts, comments, arguments on the subject, so please contact me at any time at firstname.lastname@example.org. Looking forward to discussing the issue further. And if you would like to find out more about BackBid, please visit www.backbid.com.
About JLNPR Inc.
JLNPR Inc. is a full-service public relations and marketing agency that lives and breathes all facets of the travel technology industry. From online travel agencies to revenue management systems, tablet-based aviation automation solutions to IFE technology, hotels to airlines and everything in between, JLNPR uses our knowledge and experience to get your B2B travel technology company noticed by media, influencers and potential customers – and whenever possible, without the overused, often abused press release. In addition to traditional media relations outreach, we also ghost- write exciting, informational copy that will be published (in our client's name) by top hotel industry media outlets – in order to increase your company's visibilitiy with potential customers, boost brand awareness and increase sales.
In February 2017, JLNPR will launch the DIY.JLNPR course, which will offer a comprehensive online course that will teach businesses how to develop their own highly effective hotel/hospitality PR campaign without hiring an expensive PR agency. The course contains 30+ hours of step-by-step teaching materials, as well as easy-to-use templates, enabling you to create press releases, media alerts, a media kit and all other written materials necessary. In short, the DIY.JLNPR course gives you the tools to more effectively sell your product or service to hotels, without blowing your budget.
To find out more about JLNPR (including our services and out-of-the-box philosophy on press releases), please visit www.jlnpr.com. To find out more about the DIY.JLNPR course, please contact Jennifer at email@example.com.
Chris has been playing a key role in hospitality organizations for over 20 years, and has specialized in the field of Revenue Management for the last 12 years. Chris worked with many of the leading hotel organizations in North America, including Four Seasons Hotels & Resorts, Westin Hotels & Resorts, Fairmont Hotels, Marriott, Loews Hotels, and Preferred Hotels. In his role in executive management, he has built relationships with many of the leading hotel organizations and opinion leaders. Chris’ wide and varied knowledge in hotel operations, marketing and revenue management has helped him launch a new career turn; namely a game-changing new way for hotels to increase online sales without eroding rates. Chris brings a wealth of industry knowledge to www.Backbid.com.