There are benefits and downfalls to the reliance by hotels in trouble or transition on use of OTA (Online Travel Agents) such as Expedia, Orbitz, Priceline and Travelocity. Since my group works as both an Interim Hotel Manager for short term assignments or being enlisted as the longer term Hotel Asset Manager to oversee a hotel’s performance, we often see the good and bad of too much or too little reliance on the OTA to secure and book room business on behalf of the hotel. The short term results we see as the Interim Hotel Manager is the added exposure and potential increase in market share that the international presence and marketing that OTAs provide a hotel, especially one that is independent and unbranded. The longer term issue as a Hotel Asset Manager is the inherent cost, typically 20% to 30% of gross room revenues. There is much hotel industry discussion on this topic as the OTAs seem to be the only one reaping rewards in an otherwise down travel economy. Still, the marketing investment in cash flow is hard to come up with for other sales and promotions efforts, particularly if you are being charged as the Interim Hotel Manager to produce results quickly and without any added investment by ownership. Of course when being enlisted for longer term results as the Hotel Asset Manager, we are always looking at redirecting the large commissions associated with the OTA to the hotel’s direct web site, which produces room reservations with little to no added expense. There is a very informative article written on the “Ten-Step Program for Easing Your Hotel’s OTA Dependency” by fellow hotelier Daniel Edward Craig, which I believe you will find of interest:
Perry Group
Hotel & Restaurant Experts For The Hospitality Industry
