NB: This is a viewpoint from Mark Forrester, managing director of Occupancy Marketing.
In 2009, Google changed its approach to brand protection, removing protection for trademarked brands on its Adwords Online advertising service.
This esentially allowed others free reign to bid on another brand's keywords.
Prior to 2009, it was possible to stop online travel agencies bidding on your keywords via an application process.
The only protection now offered for protected brands is the restriction of trademarked names in the copy of the advert itself which is not particularly effective as the advertiser can remove the offending brand name and re-submit the advert.
This essentially leaves the door open for OTAs.
We have seen some success in writing to OTAs to ask them to stop using a rival's brand name, but this is inconsistent and cannot be relied upon.
Whilst it is certainly worth a try (see related article) the best method is to try and stop this before signing any contractual agreement with an OTA.
In all cases, the bigger the brand, the more unlikely they are to agree to this.
Assuming a least some level of OTA brand bidding, what steps can you take to win back revenue?
1. Advertise on your own brand name
Although many hoteliers feel aggrieved to have to spend money to capture market share from OTAs, it’s a proven method to channel shift.
A hotel or hotel group protecting their brand online is likely to see an equivalent commission rate of 5% - 9% (compare this to 20% plus for OTAs).
Hoteliers also need to recognise that OTA’s aren’t necessarily interested in your brand name to promote your business; they are interested in a relatively cheap source of keyword traffic.
Their primary aim is to make a sale for a hotel in your location.
Assuming you do run your own brand advertising what steps can you take to improve the ROI?
- Cover all your main source markets
- Localise your adverts and keyword strategy
- Include site links and images in your adverts
- Include a best rate message in your adverts
- Maximise your budget for brand search terms
- Aim for top spot
- Include Bing in your brand protection strategy (the OTAs do)
Remember if you do your utmost to drive all bookings directly through your website, you are reducing the interest that OTAs have in your brand.
If you can reduce their ROI they will concentrate on other brands where they get a better return.
2. Play in the same sandpit
To have an effective channel shift strategy you need to play in the same sandpit as OTAs.
TripAdvisor and Google Hotel Finder are two good examples. In late 2012 TripAdvisor launched its metasearch functionality in an attempt to monetise the website.
The majority of hotels will have OTAs advertising live rates and availability on your hotel pages in TripAdvisor through the Check Rate Program.
In popular destinations, these pages get 20,000 views a month. Hotels can sign up to participate in the Check Rate Program.
This will allow you to offer your own rates and availability.
Google has been giving over more and more of its page to Google Hotel Finder (see screen shot), we estimate that this will account for 10% of all clicks for a hotel search 12 months or so from now.
By working with your representation company or CRS provider, you can play in this space you can show your rates and availability.
3. Google+ Page
One weapon you have as hoteliers that OTA’s don’t is your Google+ Page.
By effectively optimising your Google+ page and showing your own live rates through Google Hotel Finder, you maximise this competitive advantage for location based searches.
4. Flash sales
It is human nature to panic and conduct a sale through social commerce sites like Groupon/LivingSocial/Secret Escapes, etc, or flash sales via OTAs.
Not surprisingly, what you tend to see anytime you run a sale which is heavily advertised and not available on your own website is a cannibalisation of your own direct bookings.
This is often not accounted for in the Return on Investment calculations when conducting these promotions and if it was, we suspect hoteliers would use them less.
Before you conduct a flash sale, ensure you fully measure the impact of lower ADR and the drop in business you would have benefited from via your direct channel.
5. Rate parity
Rate parity is one of the biggest influencers of your online market share. With the advance of metasearch (Kayak, TripAdvisor, Trivago, etc) and Google Hotel Finder, it is blindingly obvious if your rates are not competitive with OTAs.
Some OTAs will request that you offer the same rate on your own website as the OTA’s websites (Rate Parity). Some hoteliers we note are giving rate parity between OTAs and selling on their own site at a slightly lower rate.
Hoteliers should look to incentivise bookings through their own website by offering an incentive to book online, be it breakfast or free Internet etc.
Another approach is to keep a lower / rate room category as a lead in price through your direct channel.
Equally, be aware of giving allocation for your lower room categories as if the OTA’s have the "lead in price" availability and you are sold out, your rates will look out of alignment.
6. Best rate guarantee
Market this effectively on your website and in your online advertising. Include a claim back form to show you are serious about policing your own rates.
7. Incentivise guests to book direct next time
OTA’s are not necessarily a bad thing. In markets where you are not geographically represented they offer good visibility (sometimes called the billboard effect).
The key thing is to capture those customer details and look to encourage them to book direct next time.
Offer an incentive using the customers' e-mail address and offer a promotional code allowing them to "book direct and save" next time.
Build up this database and send regular mailings to them.
8. Usability - Booking engine
With only the larger chains building their own booking engines, it is important you choose a booking engine which sells your property.
One of the reasons why users flock to OTAs is they have made it very simple to book.
Also be aware of terminology - hoteliers have a habit of using terminology which discourages a sale. Whilst Booking.com will advertise "Free Cancelation" (small print up to 24 hours before booking), most hoteliers will use terminology like "Full Payment unless cancelled within 24 hours".
Simple, right?
NB: This is a viewpoint from Mark Forrester, managing director of Occupancy Marketing.
NB2:Money tug-of-war imge via Shutterstock.