Since 2008, more than 60 million travellers have booked accommodations through Airbnb. With online trave agents (OTAs) on the rise, selling through these middlemen can seem like the best way to increase visibility for your rental. However, there are downsides to using OTAs too. In today’s marketplace, tourism providers should seek to differentiate – not integrate – their businesses.
OTAs sell your products – on their terms.
OTAs often charge a high commission fee, some as much as 30%. This means that you lose €30 out of every €100 the customer pays – and the demands continue to increase.
Second, OTAs acquire customers for the agency, not for your business. The people who book through Airbnb aren’t “your” customers. Next time they plan a trip, they’ll go to Airbnb, not to you.
What should accommodation providers do?
So OTAs drain profits and brand loyalty from accommodation providers. The solution is simple – take out the intermediary. Accommodation providers should encourage customers to book directly with your company, instead of through the OTA. Use OTAs to complement your business and not as your core strategy.
How can we achieve this goal?
First and foremost, make sure that your business has a booking engine. You don’t need to invest time and technical knowledge into creating your own – there are third-party booking solutions that don’t charge a commission. By using such a booking engine instead of an OTA, you get to keep all the profits.
Having a website helps by increasing your brand visibility. It allows customers to browse your rentals without the distraction of every other alternative in the city. A website also lends legitimacy to your business, making customers more comfortable with using your booking engine.
Finally, share products among local networks. For example, if a traveller is coming to your city for a wine tour and needs a place to stay, the wine tour company could suggest your apartment rentals to the traveller. In exchange, you can advertise their tours on your website. This increases visibility for both companies, without involving an OTA or intermediary.
If you want to encourage direct bookings, there are tools available online. Localler, for example, allows you to build your own website, receive direct payments, and connect to other companies for product sharing. Remember: you don’t have to drown in the OTA market. These options build up your own business, instead of the OTA’s.
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