Question for Our Revenue Management Expert Panel:
When reviewing the number of direct website bookings Vs OTA bookings, have you seen any difference in this breakdown post-Covid? Has there been a shift in B2B and B2C? (Question by Ricardo Sereno)
Industry Expert Panel
Our Industry Expert Panel exists out of professionals within the hospitality & travel Industry. They have comprehensive and detailed knowledge, experience in practice or management and are forward-thinking. They are answering questions about the state of the industry. They share their insights on topics like revenue management, marketing, operations, technology and discuss the latest trends.
Our Revenue Management Expert Panel
- Sandra Gannon – Commercial Consultant, Revenue Puzzle
- Krunal Shah – Director of Revenue Management, The Biltmore Mayfair, LXR Hotels & Resorts
- Silvia Cantarella – Revenue Management Consultant, Revenue Acrobats
- Tanya Hadwick – Group Revenue & Yield Leader, SunSwept Resorts
- Diego Fernández Pérez De Ponga – Director of Revenue Management, Palladium Hotel Group
- Heiko Rieder – Vice President Business Development, Hirmer Hospitality and Travel Charme Hotels
- Massimiliano Terzulli – Revenue Management Consultant, Franco Grasso Revenue Team
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“There was a shift from OTA business to Direct Business immediately after hotels reopened after the COVID restrictions were lifted. I believe that was partially due to customers getting more tech-savvy during COVID as well as needing more reassurance as to safety and flexibility. Customers felt they got that through direct booking with the hotel.
However, I also believe that this shift was due to domestic travel reopening and international travel only returning slowly. Since travel has resumed, I believe we have seen a shift back to OTAs. OTAs have the marketing reach in international destinations, which a hotel may not have access to. I believe the shift was short-lived; however, hotels should still foster the ground they made up over the last couple of years with direct booking customers and build on it.”
“While experiencing a recovery in the hospitality industry, travel has changed post Covid. This means that relationships between Hotels and 3rd parties have also changed, facing more challenges in getting a fair market share. Hotels are at times desperate for new business in this challenging environment which leads to higher dependency on OTAs giving more commission percentages to attract different GOB markets.
Yes, there is a shift in bookings, more towards direct bookings mostly for branded hotels but individual properties still rely on 3rd Party OTAs where they require to spend more on marketing, branding and positioning of their property. The shift is because more and more guests are now looking at flexibility, ease of booking and sustainable properties. Direct websites are now digitally equipped to cater for this flexibility where properties have spent more money in the development of brand websites during Covid upgrading their technology.”
“Everybody has seen a growth in direct bookings post-pandemic for many reasons, the main ones being the customers looking for direct contact with the property they will be staying in at times of uncertainty, and OTAs dramatically cutting their marketing investments and bids. In 2022, OTAs started investing and ramping up again in their bookings, so the share between direct and OTA is slowly going back to the pre-pandemic levels for some properties.
When it comes to B2B and B2C, nothing has really changed as B2B still love to redistribute B2C and play the margin-cut game. But thanks to the confidence brought by the strong travel demand last summer, many hotels stopped compromising with B2B partners and finally started working towards a profitable channel mix. Will it last? I hope so.”
“As we don’t really work heavily with OTAs, looking at overall B2B (including Tour Operators) vs B2C we have seen an influx in those looking to deal directly or deal with a Travel Advisor. In discussions, a lot of this seems to stem from challenges receiving cancellation money through the COVID period whereby TO’s could be processing huge volumes and therefore taking much longer than an individual resort or hotel could action.”
“Yes, there is a comeback to the basics in terms of OTA and direct sales share. OTAS have woken up during 2021 and in 2022 they have spent tons of money to gain their lost share. In my opinion, where there is a big shift is between OTAS and TTOO. Due to changes in buying patterns, clients are booking less in advance and more at the last minute. This change benefits the OTAS and the B2C.”
“During the pandemic, the financially struggling OTAs reduced their performance marketing budgets which put the hotel websites into better positions on search engines and consequently increased direct shares. For some regions, it also educated travellers to continue to book direct. Increasing shares in voice over online indicate that since COVID there is a stronger demand in asking detailed questions about the desired property which oftentimes cannot be answered by OTAs or other 3rd parties, i.e. its hygiene practices or general service levels.”
“There are several studies showing that OTA bookings have returned to pre-covid levels, so the direct booking/OTA ratio also seems to have returned to normal. If after two years of low demand and ups and downs, this recovery in OTA bookings has meant a return, if not an improvement, of pre-covid profits, then I wouldn’t worry.
However, you should always carefully monitor your booking volumes and find the right balance between OTA bookings and direct bookings. Having 100% direct bookings doesn’t make any sense. It is also true, however, that OTAs have become very aggressive in their approaches to acquiring more and more market share.
So, it is essential to monitor consistency with the rate parity and put in place all those strategies to increase conversions on the website, disintermediate over the phone and via email, increase regular customers and above all transform customers who arrive the first time via OTAs into direct customers the next times. In short, as in all things, the right balance must be found.”
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