The War Between Hotels and OTAs: We Win, Who Loses?

The New York Times has made it official: war is on between the big hotel groups and the online travel agencies (OTAs).  Let me tell you: there will be losers. But it won’t be us.

At least no time soon.

I cannot remember the last time I booked a flight at an OTA, mainly because United and American (nee USAir), the two carriers I generally fly, have well oiled websites that do pretty much everything I need to comfortably fly, on my terms. I track my frequent flyer miles, pick my seat, if I want, I may buy an upgrade with miles, and – sometimes – I have even bought bundled hotel nights at jaw dropping prices (because that hotel rate is “opaque,” meaning it evades the rate parity demands of the OTAs).  

Other than Las Vegas hotels, I also cannot remember the last time I booked directly with a hotel.  I am much more likely to use Expedia or HotelTonight, even Amazon Local, and, honestly, I’ve come to see hotel websites as garish eyesores populated with really bad images, worse copy, and balky booking engines that just weren’t worth the bother.

(I only go to Las Vegas for big meetings which have special rates and – usually – special booking sites.)

But now the big players – Marriott, Hyatt, Hilton, Starwood – want to change my mind about the wisdom of booking directly with them and they just may be succeeding.

It’s about money of course. The OTAs nick the big chains maybe 15% on every booking and that is money they hate to part with. (The OTA rate has never been confirmed and it also varies from case to case. But multiple sources have whispered the 15% rate to me as a good average for the industry giants.)

Say it’s a $200 hotel room. That means $30 is in play – the hotel can afford to give me up to $30, just to get the direct booking and to spite the OTA. And that is exactly what they now are doing. Reported the New York Times: “major hotel chains are offering a host of benefits to lure travelers to book with them directly: digital check-in, free meals, Wi-Fi and even the ability to choose a specific room.”

You want free breakfast? Done. Upgraded WiFi, no charge? At your command.  Maybe bonus rewards points? Done.  

Some chains even are withholding loyalty points on rooms booked through OTAs and that is a direct shot in this bow.

Give this a few years and my bet is that most frequent traveler hotel bookings will have migrated to the big chains’ own websites and away from the OTAs. Besides saving OTA commissions they also will gain better – more direct – communication with guests and that makes them salivate. They definitely have skin in the game and will play accordingly.

We also will be winners because frankly we are being bribed. The hotel chains can see the prize- our direct loyalty – and they are grasping it. With free WiFi, drink coupons, whatever it takes.

Who stands to lose? Obviously the OTAs will see sales reduction but, to me, the blood on this track is likely to be that of independent hotels and very small hotel groups. For one thing: they are paying OTAs as much as 30% on every booking.  On a $200 room, perhaps $60 goes to the OTA. Ouch.

That number is unlikely to go down.

Independents lack negotiating clout and as the chains squeeze the OTAs the logical place for OTAs to squeeze is the independents. They are unlikely to lower that 30% rate.

For two: at the independent hotel websites I have looked at, the booking engines are creaking antiques, just bad code, and there is no clear path to tweaking them to offer me the amenities and upgrades that the chains are using as bribes. Independents also lack loyalty programs in most cases, too, so no bribes possible there.

For three – and probably case closed – independent hotel websites that I have looked at are plain wretched, many are much worse than the sites of big chains.  I have no idea who designs these sites but, probably, neither do the hotels that put them up. They are just Internet train wrecks, flecked with hyperbole, false claims, and lots of creepy shots of models.

A lot of independents also are addicted to their profits from resort fees – a personal hatred – and they are not eager to surrender those dollars.

Independents, too, at least many of them, just are slow to move.

But if they reading this, they just got their wake up call and let’s hope they are listening.


Hoteliers: Stop Torturing Us on TripAdvisor

Memo to hoteliers: stop polluting Tripadvisor with self-serving, self-centered hollow comments. Please.

I know reputation management firms advise hoteliers to respond to x% of TripAdvisor posts, both positive and negative. They point to data that allegedly draws a clear connection between hotel management posts and guests finding that engagement to be positive.

Not me. Not usually.

It’s hard to see anybody connecting with what management usually posts.

The other day I was reading reviews of a resort where many guests angrily complained about the slow, balky WiFi. In just about every case, a hotel functionary posted a comment to the effect that “our WiFi is excellent.” Except – quite obviously – it is not.

What happened there? After reading the management response, probably the initial posters are mad because their quite legitimate concerns are dismissed as wrong. They are depicted as somehow the cause of their own bad WiFi.

But even more to the point: how many prospective guests such as myself read the hotel response, have come to believe it false, and conclude that this hotel just is out of touch with the reality of its operational failings and also has no clue how irritating their comments are to many, many readers. Guests are not to blame for operational failures.

Another TripAdvisor plague: hotels that copy and paste the same boilerplate after just about every guest review and, inevitably, it is mindless swill. “Greetings from the shady side of the island where the surf is gentle and so are the breezes. Thank you for your comment. I have referred it to our operational team.”

One time that comment is ignorable. When it is on every page, many times, it’s logorrhea, just verbal diarrhea smearing the page.

Another favorite (not) line from hoteliers, typically in response to blisteringly negative reviews: “We hope you will give us another chance with a return visit so we will have the opportunity to make a better impression.”

In this case, that is in response to a long review that complained – loudly – about inadequate housekeeping, worn room finishings, mediocre food and more. That guest is not coming back and neither will TripAdvisor readers if the best the hotel can do is sigh and beg for another chance.

Mind you, I am all for a hotel using TripAdvisor as an adjunct to its customer service channels. Personally I am a lot more likely to post on Twitter, even TripAdvisor, than I am to air a complaint with hotel management. So, maybe, if the hotelier is swift and committed he/she can turn around a moment of my unhappiness that had been ventilated on a social channel.

But when the hotel clutters TripAdvisor with repetitious, pointless points – well, just stop it unless your underhanded goal is to drive readers off the site because you have concluded that those who read the many negative reviews just wouldn’t book. So better for you to have no readers at all.

Could a hotel do TripAdvisor right? Absolutely and a very few do. These are hoteliers who see the complaints as an opportunity to win back that irate customer – and also to show other guests and prospects that this is a hotel that genuinely cares. Be authentic, be real, be honest.

If many guests complain about the WiFi, guess what, the WiFi is a problem. Fix it. Don’t litter TripAdvisor with non-sequiturs. Just get the problem fixed.

I see some hotels really doing that. In reading a Phoenix hotel’s TripAdvisor page I noticed a couple reviewers complained that the well known restaurant was no longer as great as it had been. Then I noticed a comment from the GM where he acknowledged that and added that a new team was coming on board imminently, precisely to address those issues.

That’s impressive.

It’s also rare to see such honesty and energy.

Words of advice to hoteliers: Stop lying on TripAdvisor. Stop ignoring your hotel’s obvious failings. And really, please, stop polluting the pages with word after word of nonsensical posturing. That is no way to boost engagement, in fact it accomplishes the exact opposite: It drives guests and prospects away.