As online travel agencies (OTAs) continue to gain market share, there’s a current sense of frustration among many hoteliers that they face an unwinnable battle.
NB: This is a viewpoint by Gautam Lulla, president of Travel Tripper.
OTAs have vast budgets and the kind of digital marketing muscle small hotels can only dream of, with the likes of Priceline and Expedia spending around $2.5 billion dollars a year on advertising.
The promotional piggyback hotels once enjoyed from being listed on an OTA site seems to have died a death too, with the apparent demise of the “billboard effect”.
And while hoteliers' claims of unfair practises by the OTAs - such as playing with rate parity - are cause for debate, one thing cannot be disputed - the OTAs’ unstoppable growth can largely be attributed to their investment in user experience.
The ROI for user experience
OTAs see user experience as something that requires constant refinement. Currently, Expedia spends upwards of $650 million in technology and runs about 1,500 A/B tests per year. They’re also planning to invest billions in personalized web graphs.
These efforts to perfect user experience are being matched by close rival Booking.com, whose use of design has been held up as a shining example of “best practice” by Econsultancy. It has also dedicated an entire blog to coding and programming, which offers valuable insights on product design, software development and usability tests. No question, they take user experience seriously.
The OTAs' consistent investment in technology and user experience is partially driven by consumers’ preference to book direct. To win the booking, OTAs need to offer a price that is cheaper or the same as the hotels' while making the booking experience easy.
Not only have they successfully accomplished that but also programs such as Booking.com’s Genius or Expedia Rewards have begun to cultivate brand loyalty. The result? A shift in the number of travelers who are booking with OTAs instead of directly with hotels.
Catering to the digitally savvy traveler
In recent years, OTAs have transformed the user experience to suit the way people like to book travel experiences.
Today, 57% of travel bookings are made online, and a growing number of users book via a mobile device. Since last year alone, the share of mobile bookings in travel has risen from 12% percent to 23% percent .
OTAs have responded to this trend, giving customers a multi-platform experience by ensuring their digital presence can be seamlessly accessed on desktop, tablet and mobile devices.
A growing number of people also want to book last-minute deals on the move, with 47% of same-day hotel bookings now made on a smartphone. It’s another trend the OTAs have been quick to exploit, with standalone apps such as Booking Now by Booking.com allowing users to book a hotel room 48 hours in advance in just four taps.
Travelers also seek out independent reviews before making a reservation, with 95% claiming to read reviews before booking. OTAs understand the value of this behavior, so they make customer ratings and feedback a prominent part of the hotel research process, offering millions of reviews directly on the site.
Tapping into the secrets of the OTAs
Hotels will need to step up their own investments in ecommerce technology if they want to maintain a level playing field against the OTAs. In essence, a hotel’s own website must become part of an extended guest experience—one that starts not at check-in, but the moment a guest first lands on the site. The digital experience must delight the guest as much as the stay does.
OTAs have certainly raised the bar in this area. As a consequence, customer expectations of what the online booking experience should look and feel like have risen dramatically.
For hotels, it starts with learning and applying the same technologies and tactics that OTAs employ to optimize conversions. If hotels too can become masters of user experience, they can finally win back their fair share of direct bookings and ultimately lessen their reliance on OTAs.
- Learn how to unlock the OTAs’ conversion secrets and use them to increase direct bookings for your hotel - sign up for a FREE Tnooz - Travel Tripper webinar, taking place on Thursday November 5th. Click here for more details and to register.
NB This is a viewpoint by Gautam Lulla, president of Travel Tripper. It appears here as part of Tnooz's sponsored content initiative.
NB2Image by Shutterstock