Want to Reduce Ota Commission Rates and Increase Profitability for Your Hotel Business?
Are you frustrated with paying a larger amount of your revenue to the OTAs? OTAs are like soul suckers for hotel owners, but just that they don’t suck the souls but your profit margins. You can surely avoid that by using an online booking engine software.
No hotel owner wants to pay commissions if they know how to get direct bookings. And today we are going to tell you exactly how you can reduce OTA Commission Rates.
But if you don’t know what OTAs are let us understand that first:
Online travel agencies (OTAs) are powerful marketing platforms that give hotels and holiday rentals much online visibility. However, this accessibility comes with a price tag.
One must understand that OTAs are not the villain here. Rather they are an essential component of your distribution strategy. Although you must be wanting direct bookings via online booking engine software to come back in game to recover from COVID-19, you must not overlook the services OTAs provide, regardless of their high commission rates.
There are many reasons why hotels should reduce OTA dependency as they charge high commission rates, you get fewer direct bookings, and hence lower profit margins.
But first, you need to understand your Online Travel Agencies’ commission and fees before you go on a goal to lower your OTA cost. It will be best if you analyze the OTAs’ contribution to the cost of the reservations. You must determine from a cost-benefit perspective the impact OTAs have on your distribution strategy.
Furthermore, as with any other organization, 2022 is the year to increase revenue per available room (RevPAR) performance. It requires achieving the right balance between direct and OTA bookings by increasing the direct bookings while maximizing the latter’s outreach.
Let’s look at 7 different ways to reduce OTA commission rates for your hotel.
1. Strategic Plan of Direct Booking
For hoteliers, OTA commission rates can be a sensitive topic. Nobody enjoys giving over their hard-earned income. You can aim to maximize and attract more direct reservations, but you’ll never be able to replace OTAs entirely. The variety of options offered by OTAs is a big reason why visitors prefer them for bookings, and that aspect is here to stay.
Instead, utilize tools like web analytics from your channel manager and property management system to know your target audience better and their hotel reservation system. Put yourself in all proper channels and optimize each to increase revenue.
Hence, it is necessary to keep in mind that while a direct method is commission-free, it’s still not free. There are charges associated with the online booking engine software and promotion. Measure the expense of this channel with the number of reservations it brings in the same way you do with OTAs to determine the percentage of your distribution strategy.
2. Expand Available Booking Channels
It’s all too easy to depend on online travel agencies for reservations. After all, they’re in charge of promotion, bookings, and visitor experience digitally—however, the higher your percentage of OTA booking fees, the lower your profit.
When you’re using more than one OTA, compare the number of bookings and income each generates with the corresponding commission rates. You must not invest all your money in one OTA as a general rule. If you depend on one OTA for 80% of your reservations and suddenly they shift their algorithm, you might suffer a loss.
Increasing your direct hotel booking numbers is a sure strategy to defend yourself from algorithms and OTA gimmicks that are beyond your control. That involves creating your hotel booking management system and pushing customers to book via social media and chat support. And yes, ensure you have solid hotel pricing and a hotel distribution strategy.
3. Improve Your Website’s Performance
Your hotel website is the face of your brand and the first impression that people have of it. It should work efficiently, look well, and be simple to navigate and make reservations for your potential visitors.
SEO plays an important role here to attract the target audience. You must set up a Google My Business page to show up in Google’s hotel search.
You don’t need to be an SEO specialist to get the basics right. With a bit of effort, you can improve your local ranking. What is the goal? Higher web traffic equals increased direct bookings and lower commissions.
4. Offer a Smooth Mobile Experience
Another point that is very essential is – Optimize your website for smartphones.
Do you know that 80% of people use a smartphone, with mobile accounting for 50% of searches and bookings? All OTAs have improved their sites for mobile as they realize it’s worth it. You must always stay one step ahead of the competition to attract direct hotel booking.
5. Provide Unique Offers to Customers
To start with, ensure that your direct hotel booking fees are not more than the OTA price. Next, to get a tourist book your hotel directly from the hotel website booking engine, boost the offer. Small rewards like free snacks and beverages, late check-out time, or restaurant discount coupons for couples may be enough to influence a visitor to prefer an online booking engine over OTA.
6. Optimize Your Marketing Strategies
Are you facing difficulty standing out from the OTA websites? Does your content look similar to that of your competitors? Then you need to think about optimizing your marketing strategies.
You must highlight the unique services your hotel offers on your website, social media, and in your advertisements. Images, content, and voice tone are all essential. Visitors are significantly more likely to book directly if you can connect with them emotionally through marketing strategies.
It is better when your communication is strong and focused. For instance, you could create a specialized advertising strategy based on the concept of FOMO (fear of missing out) in a positive way to attract visitors after the pandemic.
You can create a social media post with a photo of a tourist sunbathing in the pool, with a tagline, “Are you fantasizing that it was you? It can be you with just a click.” Posts like this help influence the readers psychologically which can result in getting direct hotel bookings and hence avoiding OTA commission.
7. Increase Customer Loyalty
You can achieve customer loyalty for your brand with strong user engagement. Loyalty programs are easy to encourage visitors to return and book directly. Do you know that all leading OTAs have some loyalty programs? You can learn more about running a successful hotel loyalty program and apply them to your strategies.
In case you don’t have a loyalty program, an effective marketing strategy can help keep customers away from OTAs. Pre-stay messaging is essential to increase loyalty and engagement, with the additional benefit of increasing the guest’s satisfaction levels through customized add-ons and special offers. Keep in mind post-stay messaging as well: promote reviews and inform tourists that they’re always welcome again and that your hotel has the most incredible deals.
With AxisRooms, Reduce OTA Commission Rates for Your Hotels
Make sure your hotel management software can support such functions. At AxisRooms, we offer the facility to reduce OTA commission rates and increase direct bookings through various strategies. We provide a free demo that will help you understand online booking engine software in detail. With our support, getting more direct booking online, reducing prices, and profit maximization have become easy.
Try AxisRooms to see how smoothly it matches your needs. You may also check out our full package to increase your hotel’s revenue in 2022.