OTAS falling short of hotel expectations
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.)