Benefits of OTAs
5 Benefits of Using Online Travel
Online travel agents first began to emerge with Priceline.com (now Booking Holdings), Expedia Groups (as a division of Microsoft), and Ctrip (now Trip.com) leading the way. These OTAs revolutionized the travel industry and changed how travel planning was done by aggregating information from across the internet into one place for travelers to compare options, pricing, reviews, and more.
Today, many travelers begin their journey on OTA websites like Tripadvisor, Hotels.com, and Travelocity during the “dreaming phase” of travel. They use OTAs as a storefront to see what’s available on the market. At this point in their traveler journey, they are looking for inspiration and are open to various ideas, activities, and accommodation types like b&bs, boutique hotels, or hostels. Search activity is broad and destination-oriented, with travelers perusing social media channels, search engines like Google, and OTA sites to see what travel options are available.
In the planning stage, travelers use OTAs to narrow down their options, looking at factors such as amenities, pricing, and reviews. According to Yieldify, travelers spend on average more than four months researching their trip before departure and visit 38+ travel websites throughout this period. Properties must be listed on a wide variety of channels to increase their visibility and online bookings.
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When booking, travelers will often go directly to a hotel’s website after seeing them on multiple OTAs. This phenomenon called the “The Billboard Effect” was first documented in 2009 by the Cornell Center for Hospitality Research and is still relevant today. A 2017 Cornell study found that properties connected to 7+ channels had a 20% increase in direct bookings as travelers became more aware of these properties and trusted their legitimacy. Properties should ensure that their own website is fully optimized with an integrated booking system to help drive more direct bookings.
Top 5 reasons why travelers use OTAs
ConvenienceWith so much information online today, travelers use OTAs to easily browse travel services and book their accommodations using a trustworthy website. OTAs provide the convenience of price, location, and property-type comparisons with a seamless user experience. The ability to filter down thousands of properties to one that fits their trip goals is an invaluable tool that saves hours of time. OTAs have also added partnerships with tour operators and other travel companies so travelers can book excursions and activities through a single service provider.
Loyalty ProgramsMany OTAs offer free room upgrades or other perks for members. Larger OTAs have loyalty programs that reward travelers for booking multiple trips through their site, including rooms (or beds), car rentals, airfare, and activities. For example, Expedia Rewards has a points-based reward program where members collect points on eligible bookings and gain access to exclusive member prices. Rewards members can get instant access to savings worth 10% or more and encourage members to work towards gold status.
Price-driven decisionsOnline travel agencies are often thought of as the cheapest place to book and the best place to find package deals. Though many hotel brands have tried to change this perception by pushing digital marketing strategies focused on direct bookings, OTAs still benefit from being thought of as low-cost leaders. For example, Agoda markets its package deals and discounts on its website homepage. It offers international travelers an extra 10% off of regional properties across Europe, Asia, and the Middle East. Offers like this are hard for consumers to pass up and help increase the likelihood of generating a booking.
Extensive advertising & marketing budgetsDiscount and deal-centric advertising campaigns help shape consumer notions that OTAs are the best place to book. Booking.com alone spent over $3.8 billion on marketing in 2021. Expedia and Booking both spent roughly $6 million on Super Bowl ads in February 2022 that Expedia Group CEO Peter Kern said were “really just a piece of a longer-term strategy to land our message about what each brand is about.” Online travel agencies have one job: to get their inventory, including yours, in front of the right person at the right time. They’re constantly creating new and innovative ways to get rooms and rates in front of travelers. Of course, the cost of this innovation is how they justify their fees and commissions to the properties that list on their platforms.
Secure global payments & traveler protectionOTAs give travelers the ability to complete safe and secure payment transactions in their preferred currency. They support multiple payment methods such as credit cards depending on location, providing travelers the flexibility that independent properties might not accommodate unless they use secure, integrated payment processing that’s equipped to send hospitality-enriched data to banks thaand also supports multiple payment methods and currencies.
In addition, OTAs often offer traveler protection to provide peace of mind while booking. As mentioned above, Airbnb recently introduced AirCover, a free protection for travelers included for every guest. Its purpose is to help provide refunds or new accommodations if you experience an issue such as a host cancellation, trouble checking in, or a key missing amenity.
Learn how to get OTAs working for your property
The Big Book of OTAs
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- Recipe for ideal channel mix
- Top performing OTAs in your region
- Directory of 75+ OTAs