OTAS fall­ing short of ho­tel ex­pec­ta­tions

TravTalk - India - - HOTEL TALK -

On­line Travel Agents (OTAs) were once touted as the way of the fu­ture with the ease of reach­ing a wide au­di­ence and pro­vid­ing a way for ho­tels to sell rooms through a sim­ple sys­tem. Aligned with this, talk has abounded in the hos­pi­tal­ity in­dus­try about the threat to tra­di­tional store-front travel agents who face ‘un­healthy’ com­pe­ti­tion from the OTAs. But not enough is be­ing said about the dif­fi­cul­ties that hote­liers face while deal­ing with OTAs. OTAs have deeper pock­ets than stand-alone ho­tels and travel agents be­cause of in­vestor funds. OTAs are cut­ting into their com­mis­sions and un­der sell­ing, over which the ho­tel has no con­trol. Hav­ing forced ho­tels to move from a re­tail model to a mer­chant model, OTAs dic­tate the price at which a ho­tel is sold on­line. OTAs also have the abil­ity to drive a hard bar­gain with ho­tels for higher com­mis­sion. A ho­tel's on­line busi­ness is also af­fected by OTAs' abil­ity to po­si­tion them­selves higher in search en­gine re­sults, usu­ally higher than the ho­tel's own web­site, hence di­vert­ing po­ten­tial busi­ness away from ho­tels. Be­yond these, OTAs de­sign new schemes to sup­pos­edly max­imise vis­i­bil­ity for ho­tels in their list­ings and to in­crease book­ings. Schemes such as pay-at-ho­tel and no­pre­pay­ment nec­es­sary, are tools to make the op­tion of book­ing on­line more at­trac­tive to po­ten­tial guests. OTAs do not as­sure ho­tels of pay­ment for a pay-atho­tel or sim­i­lar book­ing. A credit card may have been pro­vided to se­cure the book­ing. Of­ten guests en­ter in­valid de­tails to hold a non-com­mit­ted book­ing. The safe­guard for the ho­tel when they don't re­ceive pay­ment be­fore check-in is the abil­ity to charge a ‘no-show fees’ or a ‘re­ten­tion charge’. How­ever, these are not with­out prob­lems. The dif­fi­culty arises when the guest does not check in and the ho­tel charges the credit card for the ‘no-show fees’. OTAs main­tain that ho­tels can with­draw from them at any time. But, there comes in the re­al­ity check. With more net savvy cus­tomers, the sim­ple re­al­ity is that a ho­tel can­not with­draw from an OTA and lose the pos­si­bil­ity of vis­i­bil­ity. Maybe it is time that OTA model be an­a­lysed and sub­jected to more leg­is­la­tion such that the ben­e­fit it of­fers to cus­tomers con­tin­ues and the prob­lems to ho­tels is elim­i­nated.

Maybe it's time that the OTA model be an­a­lysed and sub­jected to more leg­is­la­tion (Theau­tho­ris La­vanyaRa­machan­dran, Direc­to­rofMar­ketingof AnantyaRe­sorts.Alawyer turned­hote­lier,sh­elovesto trav­e­landoc­ca­sion­al­ly­write.)

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