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Battling OTA’s for Direct Business

For over 20 years, hotels have been competing with OTA’s for direct bookings.  

The OTA’s are winning, and frankly, it’s not a close fight.

As hospitality digital marketing has progressed, so have the strategies and tactics used by hotels and OTA’s to win customers. The newest battlefield is hotel metasearch, and OTA’s have committed an outsized portion of their attention and budget to ensure they dominate the field. The response from hotels has been tragically tepid.  


The case for metasearch

Metasearch exists at the bottom of the demand funnel; travelers on metasearch channels like Google Hotel Ads are often one click from booking. That alone makes the channel more valuable than most.  However, it's the targeting and management capabilities on metasearch channels that make them priority #1 for hotels and resorts. Metasearch channels provide advanced tools like bid modifiers, behavioral targeting, custom audience targeting, and much more. Not only are properties able to target bottom-of-funnel demand, they can do it in a way that best meets the needs of their property. No other single distribution channel offers that combination.

The result - hotel metasearch channels are the most productive, most profitable distribution channels available to hoteliers.  


OTA’s on metasearch

There are world-class media managers out there, and many of them work for OTA’s. Why? OTA’s deploy massive budgets through omnichannel campaigns that result in billions of dollars of transactions. It's the Superbowl of media management, and, as such, it attracts the best people. Those uber-talented professionals know that they compete against hotel/resort websites for direct bookings. Like any great marketing professional, they study our strategies, they position against our tactics, and, when all else fails, they use the brute force of their budgets to win bookings.  

Over the last several years, OTA’s have shifted the budget away from more legacy channels like paid search and focused more on metasearch. That pace has accelerated in the last six months. Amongst our clients, we’ve seen a consistent drop in the price-per-click (PPC) for brand terms on paid search, while metasearch PPC has nearly doubled.  

Hotels and resorts are in an existential battle for customers against well-funded, data-driven adversaries. 

How has the industry responded? With a race to the bottom.


Common hotel metasearch pitfalls

Too often, operators fall into a strategy of inertia. Instead of recognizing that Google Hotel Ads is a dynamic and evolving battlefield, they consider metasearch a box to be checked. As hospitality metasearch has grown, technology providers and mega-agencies have emerged to become the recipients of that checked box. They compete over the price of their offering, not the capability.  Instead of empowering hoteliers to fight a winning battle against OTA’s, they strip down their offering to a basic connection absent any of the management techniques that could actually result in success. Common pitfalls to this approach include:

  • Limited budgets that are exhausted early in a month, leaving OTA’s to capture 100% of demand for the remainder of the month
  • Lack of bid modifiers, which results in  wasted budget and lackluster results
  • Lack of reporting to provide insights and transparency to hoteliers
  • Lack of responsiveness, robbing properties of the opportunity to respond to dynamic market demand 

Make no mistake, OTA’s are watching the hotel industry’s management of metasearch with glee. They’re recording record profits as they play chess against an absent and outmatched opponent. 


Level the playing field 

This all may seem overwhelming like individual properties are fighting a helpless battle against a goliath that can’t be defeated. However, the silver bullet that terrifies those superstar OTA media managers - all things being equal, travelers would much prefer to book directly with the property.  

According to Phocuswhright, 72% of travelers prefer to book their accommodations directly on a hotel’s website.  

If properties can simply compete for the direct customer, they are going to win more than their fair share. It makes sense - customers don’t want to deal with an intermediary when they can work directly with the property. When they book direct, they expect they’ll get better treatment, more personalized service, and a better overall experience.

Yet, according to the same survey, direct providers only capture 48% of bookings. The difference of 24% represents the opportunity and arbitrage available to hoteliers. If a hotel-direct channel is so advantageous in the consumer's mind, then it stands to reason that better management will lead to incremental revenue.


Winning metasearch strategies

Understanding that metasearch channels are the most pivotal point of conflict with OTA’s, hotels and resorts must arm themselves accordingly. First, that means ditching the strategy of inertia. Change your perspective on metasearch to recognize that it's a dynamic channel in need of near-constant optimization and management. If that level of management isn’t available, change providers. Once you have the right partners in place, align your property goals and needs with your metasearch strategies. Then you’ll be ready to deploy some winning metasearch techniques:

  • Utilize bid modifiers to steer production where you need it the most
  • Use targeting capabilities to maximize your budget
  • Deploy smart merchandising to advantage your listing over that of an OTA
  • Stop limiting your demand capture with arbitrary budget restraints 


Why Metadesk

Metadesk was created by GCommerce, the premier independent hospitality marketing agency with over 20 years of experience working with world-class clients. The media professionals at GCommerce are responsible for one thing - results. Like OTA media managers, they are channel-agnostic and revenue-focused. They watched in real-time as traveler behavior shifted to metasearch channels, and they were dismayed to find the tools available to independent hoteliers didn’t provide the capabilities to compete.  And so, Metadesk was born.

Metadesk offers hoteliers the same advanced tools and tactics used by the OTA’s. As important, Metadesk employs hospitality media professionals who provide constant management and optimization of campaigns - thereby leveling the playing field with OTA’s. Those management and optimization techniques include:

  • Property Alignment - all Metadesk engagements revolve around the goals and needs of the property
  • Media Management by real hospitality marketing professionals who know how to win
  • Utilization of bid modifiers that include the length of stay, day of week, booking window, device type, and more
  • Custom 1st party audience targeting to maximize performance
  • Real-time reporting for real-time insights
  • Variable pricing to fit any property’s financial constraints

Hoteliers are waging a war for direct bookings against a well-funded, hyper-focused opponent. Metadesk is the great equalizer, returning control of direct bookings to the property where the travelers and hoteliers want it to be. To tilt the playing field in your favor, inquire here.