OTA's vs. Direct Bookings - What's the Difference?

Hoteliers are constantly looking for ways to maximize their visibility and increase their bookings. With the popularity of online travel agencies (OTAs), many hoteliers are left wondering whether they should invest in OTA services or focus on direct bookings. OTAs versus Direct Bookings is a complicated issue, one that requires careful consideration of the pros and cons of each option.

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With the advent of digital technology, booking a hotel is now easier than ever before. Travellers have the convenience of using OTAs or directly booking from the hotel's website or app. Both options offer different advantages and disadvantages, so it’s important to weigh these before choosing one that best suits your needs. OTA’s offer a wide range of options and discounts, but generally charge higher commissions than direct bookings. Direct bookings allow hotels to keep their profits for themselves and create stronger relationships with their customers by offering personalized services

What is Direct Booking?

Direct hotel booking is the process of making a reservation directly on the website or app of a specific hotel. This method eliminates the need for third-party intermediaries, allowing customers to get in direct contact with the hospitality provider and book their stay. Additionally, by booking direct, travellers often receive exclusive benefits such as special discounts, loyalty rewards points and access to a wider range of services only available through the hotel. 

Pros and Cons of Direct Bookings

Direct bookings from the hotel offer travelers more control and flexibility in their booking experience. Hotel booking engines like Roomstay allow users to customize their stay with discounts, packages, and other special offers. Additionally, customers can access loyalty programs that reward frequent guests with discounts.

Finally, when booking directly from the hotel, travellers can have a direct line of communication with the hotel and its staff who can provide personalized service and assistance. Hotel booking engines also offer tools that enable hotels to customize their offering in order maximize guest satisfaction.

5 Reasons to Focus on Direct Bookings

1. Hotel direct bookings are better for the hoteliers because it allows them to keep more of the money that is paid by the guests. This is because when someone books a room through a third-party site like Expedia, the hotel has to give a commission to that site.

2. Direct bookings allow hotels to build stronger relationships with their guests. When guests book through a third-party site, the hotelier doesn't get to know them as well and this can lead to less loyalty from the guests.

3. Hotel direct bookings allow hotels to track how many people are booking their rooms. This information can help the hoteliers to make better decisions about how many rooms to reserve for each night and what kind of promotions to offer.

4. Hotel direct bookings are better for hoteliers because it allows them to control the branding of their property. When guests book through a third-party site, they may end up seeing ads for other hotels on that site. This can cause confusion about which property the guest is actually booking.

5. Hotel direct bookings are better for hoteliers because it allows them to build a database of customers. When guests book through a third-party site, the hotelier doesn't get any information about them other than their name.

What is OTA Booking?

OTA booking is a type of online travel agency that allows customers to book airline tickets, car rental services, or hotel reservations from one website. These websites act as third-party intermediaries between hotels and other businesses, offering travellers the convenience of making all their travel arrangements in one place. Furthermore, they offer additional features such as reviews and photos and even discounts for booking multiple services at one time.

Pros and Cons of OTA’s

​​OTA’s, such as Expedia, Booking.com, and Trip.com are popular among travellers because they offer a wide range of hotels at varying prices, allowing users to compare prices quickly and fairly easily. Many OTAs have loyalty programs that reward frequent customers with discounts or free nights which may make them more attractive than direct hotel bookings. 

While OTAs are great for comparing prices, they often take a large commission from the hotel that can be up to 25 per cent of the total rate, and this cost is almost always passed on to the traveller in some way. OTA’s don't provide travellers with access to any special promotions or deals that may be offered directly by the hotel. 

Most popular OTA’s

  1. Booking.com
  2. Expedia
  3. Trip.com
  4. Tripadvisor
  5. Trivago

OTA's vs. Direct Bookings - Which one is Better?

OTA's and direct bookings are two channels hotels can use to reach their guests, but which one is better?

OTA's offers hotels a global presence, marketing opportunities, and access to other services. Direct bookings provide hotels with more control over the booking process and a chance to communicate directly with potential guests.

Although OTA's may offer travelers more options during the booking process, hotel direct bookings made through the hotel's own website or booking engine tend to have higher returns for the hotel since customers aren't sharing their revenue.

Do you need both?

Hotels need both OTA and direct booking to generate a maximum number of bookings. Direct bookings are important since they guarantee higher profit margins for hotels. Additionally, offering direct bookings enables hotels to build relationships with their customers and offer exclusive services, further increasing their appeal.  

In conclusion, OTA's and direct bookings are both essential for hotels to maximize the number of bookings they receive. Customers may benefit from the convenience offered by OTAs while hotels enjoy higher returns from direct booking and better customer loyalty.

Direct hotel bookings are on the rise

With the advancements in digital technology in the hotel industry, it is expected that by 2023, direct hotel bookings will surpass OTA bookings. This makes it even more important for hotels to understand the importance of a high-converting and efficient booking experience. By offering an easy-to-use booking engine on their website, hotels can ensure they capture the most guests and make the most out of their online presence.