Advantages and disadvantages of online travel agents

For accommodation businesses like hotels, B&Bs and self-catering units, there are pros and cons to using online travel agents (OTAs) to sell your facilities. OTAs include online accommodation booking sites like Hotels.com and Trivago. 

Advantages of online travel agents

OTAs give you instant access to a large number of potential customers. Possible advantages of using an online travel agent to sell your service include:

• It can be a more cost effective way to get exposure for your property.
• They can reduce your online marketing spend as OTAs will often heavily invest in marketing and advertising to attract potential international customers, which may be too excessive for an individual operator.
• A reduction in your website costs. OTAs are keen to provide a positive online experience for customers through good website design and functionality.
• Online travel websites are popular with customers who like to compare accommodation costs and the services offered by individual providers.
• Impartial reviews on online travel websites may give new customers the confidence to book. Consumers may initially feel more secure using an OTA they are familiar with than booking directly with an individual operator or website.

Disadvantages of online travel agents

There may also be some disadvantages to using online travel agents. These include:

• Online travel agents often charge commission on every sale. This can range between 10-25% of the gross cost.
• There may be restrictive terms and conditions imposed by OTAs such as guest cancellation and automatic room reselling policies.
• You may need to find a way of managing room availability across a range of OTAs, your own website, front desk and telephone sales. This can be time consuming and labour intensive. There are software options also known as channel manager websites to help you manage this. They can show your availability on a number of OTA platforms using one calendar to reduce the risk of overbooking.
• Using OTAs does not reduce the need to have your own website with a booking engine; having your own dedicated website with a booking engine can allow you to get bookings at low commission rates.
• You may still need to invest in a balanced multi-channel marketing strategy.

Although online travel agents can help you fill rooms, it is important to maximise your most profitable revenues through sales on your own website. You should continually work on your search engine optimisation tactics and other digital marketing techniques. Focus on customer retention tactics. Directly target your existing customers (including those gained through OTAs) through email and direct marketing.