At last week’s Selling Rooms event with the Northern Ireland Hotel Federation, hotels were very interested in learning how they could control their own inventory. Most of the attendees acknowledged that through OTAs they were losing control over pricing and distribution as they fought to manage the cost of selling through third parties.
While many are trying to sell direct, it beggars the question - how much inventory is allocated to the direct channel and how much to third party, when in fact all channels should have access to the same availability. In many cases there can be as much as 24% profit difference selling direct than across OTAs.
Interestingly, hotels struggled to manage their budgets effectively as some of the revenue management or OTA costs derived from the Marketing budget and others from the Reservations. Why should the direct selling channel come from Marketing, while OTAs are paid by Reservations? Marketing will always achieve a higher profit margin and is therefore unrepresentative of the financials of e-sales.
Many consumers have a hard time booking across hotel websites, unfortunately the journey can be clunky without a clear and easy-to-use booking engines. Hotels need to invest in booking engine applications they can easily install in their website that is similar to the OTAs, this will optimize the booking journey for conversions and mobile bookings.
It was also noted the value of Voice bookings, training the reservations, call centre and front of house team to offer packages based on internet rates, and upgrade if necessary to avoid losing the booking to a third party website, which will const them dearly in commission fees.
Northern Ireland has experienced a very strong year, with most guests being domestic tourism. The national tourism office will be launching a new website at the end of the year that will incorporate direct booking initiatives from the main OTA providers, giving hotels in the region an additional option for exposure and visibility.