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Viewpoint: Direct versus indirect: a veteran's view

17 October 2019 by
Viewpoint: Direct versus indirect: a veteran's view

Most operators take the view that online travel agents are the enemy, but, as David Collins explains, a marketing strategy that encompasses both direct and indirect hotel booking is the most likely to succeed

It's a simple fact that we now live in an ‘OTA-first' world, whereby your guests will likely have found your hotel on a third-party booking engine. Even if they do know your website address or they do have you bookmarked on their iPhone, again the likelihood is that they will still check your hotel's prices with a third party before making a reservation.

So whereas you think your brand or hotel is a worthy contender for their undivided attention, your guests think otherwise. Don't take offence – this is just the way it is. No matter how much you appeal to them to book direct.

"Direct versus indirect" has been debated widely, possibly overly so, to the extent that we have exacerbated a widely perceived gulf between the two channels.

Certainly, on the one hand, getting business through your own website (aka direct) is often cheaper than selling rooms through OTAs (aka indirect). Plus, you get to own the customer relationship sooner, which means that you've a better chance of retention and repeat. In principle, at least.

But on the other hand, these same travel agent sites – say, for example, Booking.com – enable significant market reach for independent hotels, generating in turn buckets of referred traffic. Again, in principle, at least.

So can these two channels – direct and indirect – co-exist?

I would suggest yes. In my view, the two are not separate, but are instead intimately connected, almost symbiotic. Indeed, it is my view and my experience that hotels that embrace this reality enjoy significantly greater visibility and traction in terms of market share.

Furthermore, the third-party booking platforms can actually teach us a thing or two about converting traffic: savvy hotels have taken more than just a leaf out of the OTA book in providing a rich, dynamic, intuitive user experience.

In fairness to the likes of Expedia, they're a very good place to start if you're concerned about your own digital performance: everything from the optimisation of photography for mobile, creating an urgency to book by showing competing ‘consumers', reinforcing choice to overcome post-purchase dissonance, etc. They are all very effective means of converting valuable traffic and the OTAs do this in spades.

The secret really is to avoid hysterics and take a mixed marriage view of your distribution strategy: optimise your rate and occupancy from both direct and indirect and you'll still enjoy a reducing cost of sale.

A bigger bunfight and a more immediate challenge is how do you stop OTAs bidding against your own hotel's PPC? Not to mention, of course, the proverbial land-grab that Google is embarking on to own the meta-search space.

Now that's something to be hysterical about.

David Collins is co-founder and chief operating officer at the Great National Group

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TagsHotels and OTAs
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