If a love-hate relationship exists in the hospitality industry, it’s between hotels and online travel agencies (OTAs) such as Expedia, Orbitz and Priceline, among many others. On one hand, OTAs extract sizable commissions, which understandably grate on the hotels that must pay them. On the other, they also produce an enormous amount of bookings, which hotels covet.
Hotels would prefer their own websites and call centers be their guests’ major distribution channel, but so popular are OTAs—and so dependent on them have many hotels become—it’s difficult to imagine hotels eschewing their services altogether. Particularly challenging are OTA parity agreements, which require hotels to guarantee that room rates on their own websites are not below those offered by the OTAs.
Despite this challenge, savvy hotel operators are finding ways to provide incentives that entice customers to book directly through their own websites, front desk or over the phone. In this article by Software Advice - a free resource for hotel management software – we present six such strategies that hotel operators can use without conflicting with their OTA agreements.
1. Offer Discounts to a Limited Audience
Parity agreements prevent hotels from offering discounts publicly. However, this restriction doesn’t apply to those offers hotels distribute to a limited audience. “If a hotel wants to offer a discount that they don’t put on an OTA, make sure it is fenced in,” says Abby Heft, senior account manager at Blue Magnet Interactive, an online hotel marketing agency. This could include the following:
2. Send Discount Codes to Your Social Media Followers
Heft cites an example of a hotel near Atlanta that ran a Facebook-only offer sent to the hotel’s Facebook fans. It provided a discounted rate through the winter, which Facebook fans could access via a discount code. The payoff: The hotel received nearly $2,000 in revenue directly from Facebook during the month of the promotion, whereas previously the hotel generated $100 or less from this source.
3. Offer Perks to Returning Customers
One Seattle hotel participated in a Visa gift card/gas card giveaway: book a room and receive a $25 gas card. The hotel sent an email blast to past guests and those who subscribed to its email list. The campaign generated a 3 percent year-over-year increase in direct traffic to the hotel’s website and a 10 percent year-over-year increase in reservations on the site during the three months of the promotion.