Blog Tips

Lower your hotel’s commission payments

June 29, 2011 3 min read


Lower your hotel’s commission payments

Reading Time: 3 minutes

Lower commission payments to OTAs like

I spent most of the month of June on the road talking to customers, prospects and partners. Whether in the US, UK or Spain the lay of the land for 2011/2012 is pretty homogeneous. The good news is that by far and large the occupancy crisis of 2009 and 2010 seems to be behind us.

While hoteliers are grateful that OTAs like Expedia and saved the day in 2010, hotel managers are growing increasingly annoyed about large commission checks paid to OTAs on a monthly basis. The consensual opinion is that OTAs are focused on driving competition and lower prices. More on this topic in Henry Harteveldts’s excellent article Expedia/Groupon Create A New Travel Marketplace — Travelers Will Love It, Travel Sellers Will Have To Be Careful.

Hence, hotel managers are increasingly looking for solutions that help them capture most of their revenue directly on their own websites.

Five rules for increasing direct bookings and decreasing commissions to OTAs

  • Display a modern website. Many properties have built their websites before 2008 and feel that they are still appropriate. Think again: a website built in the beginning of 2007 means that your website is now four years old, but more importantly it was built before there was Kayak, the Google Chrome web browser, the iPhone, Android smartphones or the iPad. Probably it’s due for a refresh…
  • Display great photos of your hotel experience. Add video if you can. While price continues to be the #1 reason for booking, photos are #2. So ensure that your website has large banners that display the experience at your property and the surroundings. Ensure to show large pictures of the rooms and bath rooms. If you don’t display them on your site, consumers will look for them somewhere else. And if you have access to some video footage of your hotel use it and abuse it.
  • Make it easy to book. One of the top reasons why OTAs still play a very significant role in hotel distribution is because many hotel websites don’t instill the confidence to book. Many hotels still have complex multi-step booking engines with pop-ups (!) which make any sophisticated user abandon. To increase direct bookings hotels must offer availability maps, rate calendars and a simple booking process so that consumers are not driven back to OTAs and high commission costs.
  • Embrace tripadvisor. Whether hotel managers like it or not over 70% of consumers booking hotels rely on tripadvisor for anonymous advice on their property. Hence, it is critical to embrace tripadvisor and work tripadvisor comments. This other article recommends 5 simple ways to manage tripadvisor comments.
  • Offer exclusive deals on your site. OTAs have been on a “rate parity” crusade for the last few years. But rate parity does not mean that your hotel’s offering needs to be the same on all channels. You can still reward consumers for early booking or becoming a facebook fan or twitter follower. Driving direct bookings with special offers will increase loyalty and drive referral sales on your hotel’s website.

In summary, while occupancy rates are recovering, hotel managers are now going to focus on optimizing their marketing mix and will be looking for ways to provide incentives for customers to book directly with the hotel. This can be easily achieved with a modern e-commerce system: a modern website, great photos, an easy booking engine, good customer reviews and special offers.

If you want to learn more about what GuestCentric can do to improve your hotel’s direct bookings chat to one of our specialists online or sign up for our “Coffee with GuestCentric” webinar.
Chat now Register for Coffee with GuestCentric webinar

Request a demo of GuestCentric’s innovative solution
  1. Srigrace

    Lastly, people can book directly on an individual hotel's website. An increasing number of hotels are building their own websites to allow them to market their hotels directly to consumers. Non-franchise chain hotels require a "booking engine" application to be attached to their website to permit people to book rooms in real time. [edited link for commercial content]

  • Kiers So

    What is the order of magnitude of commission charged? is it per month? per booking percentage? any ideas?

  • Leave a comment

    Your email address will not be published.

    This site uses Akismet to reduce spam. Learn how your comment data is processed.