Hotel Asset Management Should Target OTA Bookings to Reduce Costs

It is no surprise to those of us charged with providing hotel asset management services that one of the single highest costs are OTAs in managing room revenues and the direct expenses associated with these Online Travel Agencies. This is often the first stop by many potential overnight guests when they are looking for rooms in any given city. – What is further complicating the relationship with OTAs, such as Priceline and Hotwire, is the amount of marketing they provide to the consumer directly. Although there is a higher cost associated with the OTAs, the hotel is in essence replacing “some” of its own advertising and reservation referrals expense through the online OTA exposure. – Still, “Joseph McInerney, president and CEO of the American Hotel & Lodging Association, said that such a marketing role was not worth the cut the OTAs take. That is especially true, he said, given that before the role of the Internet within travel exploded about a decade ago, agents typically were paid an average 10% commission. I think they’re taking too big a slice of the pie,” McInerney said of the OTAs. Yes, they have a service and they’re a partner with us, but they have no investment other than the people they have making reservations.” This cost and the other downfalls and benefits described in this article are worth noting from a hotel asset management perspective. – So how do you reign in the cost without losing room income? Not easy, but doable… We like this 10 Step Program from Hotel Online Specialist, Daniel Edward Craig, to incorporate into a marketing plan for hotel reservations. – Need other tips on hotel marketing? Read our newsletters on the many hospitality asset management issues we cover regularly. Have recommendations and ideas that you incorporate to reduce OTA fees as part of your hotel asset management? Please post here and share it with our blog and newsletter audience.