Channel mix isn’t just direct vs OTA
 
Channel mix isn’t just direct vs OTA
06 FEBRUARY 2019 8:33 AM

Experts speaking at a recent HSMAI roundtable said they’ve seen direct bookings grow simultaneously with OTA bookings, and success for hoteliers is more complicated than “us vs. them.”

NEW YORK—The major hotel brands have been pushing especially hard over the past few years to get more direct bookings, and experts speaking at the 2019 HSMAI Chief Digital Officer Executive Roundtable said those efforts are paying off.

But bookings through online travel agencies are also on the upswing, and sources said the matter is more complicated than just OTA versus direct business.

When asked whether OTA usage is up or down in the past five years, Dan Fernandez, VP of digital marketing for Concord Hospitality Enterprises, said it’s up at his company, but that’s not necessarily a bad thing.

“I wouldn’t say that channel mix was taken from direct,” he said. “It likely came from other segments. We’ve seen both our OTA reliance and direct booking contributions increase at a good rate.”

Dan Wacksman, SVP of integrated marketing for Outrigger Hotels and Resorts, said his company has had a similar experience.

“I’d say it’s the wholesale business that’s reduced more, and that’s a good thing because the margins are heavier on the wholesale side than the OTA side.”

Understanding how to use OTAs
Paolo Torchio, VP of e-commerce and digital for Two Roads Hospitality, said OTAs are useful tools that are best treated as a mechanism for new customer acquisition.

OTAs are “a great acquisition channel if you can turn those guests into repeat customers,” he said. “With the OTAs, you’re only getting so far.”

Michael Goldrich, VP of marketing, e-commerce and distribution for Denihan Hospitality Group, noted the conundrum of OTAs being simultaneously partners and competitors, but said overcoming that is a matter of perspective.

“We look at it the same way as paid search, which you use to solve problems with (search-engine optimization),” he said. “It’s the same thing with OTAs. You have to look at how well property.com is performing, and it’s not performing well or you’re seeing challenges, that’s when you open to OTAs. It’s a counter balance.”

Ryan Walker, VP of e-commerce and digital strategy for Dream Hotel Group, agreed.

“You just need to balance that relationship,” he said. “They can be great partners that bring a lot of great traffic.”

Bob Gilbert, HSMAI president and CEO, said working with OTAs has gotten easier because people are more critical about when and how they use them.

“The hotel industry is managing the OTA relationship more smartly than five years ago,” he said. “Now (companies) are laser focused on optimizing channels and are creating positions and doing data science around the convergence of revenue management and digital marketing.”

Direct push still important, ongoing
Sources said hotel brands are still pushing for direct business, which will continue to be essential, but there’s much work to be done in terms of guest perceptions.

Aimee Cheek, director of e-commerce for OTO Development, said younger travelers have been conditioned to see OTAs as their go-to channels at the beginning of the booking journey.

“It’s great to see the brands trying to combat the perception of OTAs” of being cheaper, she said.

That will be an ongoing issue, she said, because OTAs have lots of money to play with.

“OTAs have so much more money to invest in” technology and marketing, she said.

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