In the tourism industry, an OTA (online travel agency(opens in a new tab)) can be a small-scale tour operator’s worst nightmare. Some of the most well-known OTAs that come to mind are the Priceline Group (including companies like Booking.com and Kayak), Expedia Inc., and the well-known TripAdvisor. OTAs are used primarily to book travel accommodations, like flights, car rentals, and hotels. But OTAs are currently extending their reach (like how TripAdvisor has expanded from just reviews(opens in a new tab)), and many are adding the option to list your tours there. They are, in some ways, a one-stop shop, which is rather convenient for the consumer. So what’s so bad about an OTA, you may ask?
To be fair, there isn’t anything inherently wrong with them. To some degree, they can encourage people to learn about your business, book a tour with you, and even leave a review when all is said and done. In fact, according to Brian Dean of Pebble Design(opens in a new tab), 76% of online bookings take place via OTAs. While these companies can play a vital role in increasing your bookings, the fees that are charged with each transaction(opens in a new tab) can wipe out the profit margins of small-time tour operators. (GoGroupBooking reports(opens in a new tab) that some hoteliers can pay up to 25% per online booking! Yikes.)
Using OTAs to your advantage while maintaining (and even increasing) your direct bookings is a fine line that businesses in the tourism industry have been trying to walk for some time now. While much of the information available online regards hoteliers specifically, there are lessons to be learned here too as a tour operator.
GETTING A LEG UP ON THE OTA BOOKING COMPETITION
There are several ways to deal with competition. The first option that may come to your mind is imitation, but be wary of trying to imitate your large-scale competitors. While it’s a good idea to be aware of website features that your competitors (OTAs, in this case) feature on their sites, keep in mind that these huge companies have a much larger budget than you. They likely spend thousands of dollars at a time to get all of the whistles and bangs on their site, so imitation is probably not the best avenue if you want to step up your game.
The way to go is innovation. You may be used to this already in a sense — what makes your company special when compared to your competitors? Once you’ve answered that question for yourself, think about how you could diversify your service even more. What’s included in the booking on your OTA listing? What is that listing like? Think about how you could make your own website better to encourage guests to book with you directly instead.
O’Rourke Hospitality(opens in a new tab) lists a few great ideas to encourage direct bookings:
- Have a great mobile site. As you know quite well by now, mobile is king. Accommodate for that! Make sure your site is at least mobile-friendly(opens in a new tab); even better is having a site with a responsive design! (Hint: Tourism Tiger can give you a hand with a responsive design. Just shoot us an email.(opens in a new tab))
- Incentivize booking directly. Maybe you could add on a cool souvenir or an extra site to the itinerary as a reward for those that book directly. Get creative (while not throwing your profits out of whack, of course)!
- Give your repeat customers a break. O’Rourke suggests offering a loyalty rewards program for hotels, so think of how you can adapt this to your business. Maybe you could give repeat customers a discount or something special on their next tour. This can build on your benefits from booking directly or be entirely separate. It’s totally up to you!
Remember that you know your customers better than any OTA! With the help of focused marketing campaigns, incentives, and of course, a speedy and great-looking website(opens in a new tab), you’ll have a better shot at staying on top of your OTA competition. Go get ‘em, tiger!
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