Website Design for Hotels: How to take on the OTAs and Win

There's a problem with how most hotels and hotel groups think when it comes to their websites. Unfortunately, most hotels seem to class the cost of building and marketing their website as a marketing cost.  The reality of course, is that if they engage in the development and marketing of their website in the best and most effective possible way, the hotel's website becomes a huge cost saver and profit driver.

A Cost Saver?

Yes.  Many hotels currently spend a small fortune each year paying out commissions to third party websites, commonly known as Online Travel Agencies (or OTAs).  These OTAs are familiar to most of us as Expedia, Hotel.com or Booking.com among others.  What most of us don't know is that for every booking that we make on one of these websites, the hotels pay out a booking commission that can be anywhere between 15% and 30% of every booking made.  Whatever that percentage is, that's a significant amount of the revenue that a hotel generates for each booking.

To understand this clearer, let's look at the numbers for a 200 room hotel that sells 50% of its rooms each night via one of the OTAs.  At a commission rate of 25%, that hotel pays out close to US$1 million per year in commission fees.  If that percentage was reduced to 25% of room bookings, the savings for that hotel would be close to US$ 500,000 per year.

So why aren't the hotels aiming to do this?

Many are.  But the reality is that hotels are used to paying out large sums of money for booking commissions.  Before the internet and the rise of the OTAs, most of us would book our hotel's via travel agents.  These travel agents would also charge a commission for each booking and therefore, this cost of sale has been a permanent fixture on the profit and loss account for a hotel.  In other words, this isn't necessarily a problem for hotel's as long as they continue to make money (profit) for their owners.  But as we head into more challenging times for the travel industry due to travel restrictions due to the COVID-19 pandemic, where tourism numbers have declined dramatically, hotels need to start addressing this problem.

Traditionally, when a hotel needs to generate more profit or reduce costs, the first areas to go are marketing and payroll.  These are of course, the easiest and quickest cost cutting areas for most businesses.  The reliance on OTAs therefore means that while this is a significant area of potential cost-cutting, the fact that there efforts are seen as a cost of sale protects the OTAs and plays directly into their hands.  After all, less marketing efforts will most likely mean less direct bookings via a hotel's website, which increases the reliance (and commission bookings payable) for OTAs.

How to beat the OTAs

While its obviously not easy, the OTAs and their website structures do have weaknesses that can be exploited by hotels.  No matter how big your hotel or hotel group is, you are David and the OTAs today are Goliath.  And that's fine.  David, in theory, is more nimble, more agile and much more dynamic than Goliath.  Hotel's need to think in this way if they are to take on the OTAs and win and there are obvious places to start.

Start with what the OTAs are scared of.  

They are petrified of making changes to their website or online marketing strategies that may possibly negatively impact the number of bookings made on their websites.  This means that their websites very rarely change.  Yours doesn't need to be as stagnant and can be much more dynamic and exciting.

The OTA websites are also geared to manage thousands of hotels within a single templated environment.  What does that mean?  Well, it means that no matter what type of hotel they feature on their websites, the page layout and content areas are exactly the same for each.  That means a Four Seasons Hotel page on Booking.com looks exactly like an Ibis Hotel page on their website.  Not very exciting, right?

While the aesthetic features of the website can be addressed easily, an area that is often overlooked is the content.  By content, we're talking not just text but also images, videos, 360 views and even audio (think podcasts).  OTA websites will only ever feature the type of content that fits within their templates, while a hotel's own website can contain the type of content that is relevant to its ideal customer base.  By this we mean the type of content potential guests search for on Google, when looking for their perfect hotel.  By this we mean FAQ's or blog articles that answer specific questions.  It's virtually impossible for OTA websites to provide this type of relevant content.

Finally, when uploading content on an OTA website, our recommendation is this.  Don't give everything away.  Save your best images and content for your own website.  You never know, a guest may come direct to your website to get more information, which in turn gives you an opportunity to make a direct booking with that guest and save yourself hundreds of dollars!

Nexa Hospitality is the region's only dedicated digital marketing agency for the hotel and hospitality industry.  Learn more about digital marketing for the travel and hospitality industry, here.

Speak to one of our experts about how you can improve your online visibility and increase your hotel's profit at the same time.