Independent hotels still unhappy with OTAs

A survey of 288 independent hotels, b&bs and guest houses, in the wake of the recent OFT ruling on hotel room discounts, revealed that 61 per cent believe using OTAs is now a necessity, but 87 per cent would like to see third party commission levels capped.

Furthermore, the majority (75 per cent) believe the high search engine positions of OTAs are hindering their own marketing efforts, while 87 per cent said that the marketing budgets of larger hotel brands and OTAs have struggling to compete.

Laterooms.com, which recently increased its commission from 15 per cent to 17 per cent, was voted the worst of the OTAs for booking generation, while Expedia was rated the most expensive. Booking.com was rated as having the best customer service and the cheapest commission.

Rate parity​

Steve Lowy, owner of umi Digital, told BigHospitality that many independent hoteliers were unhappy with the OFT ruling because it did not find any problems with rate parity.

“I think the OFT judgement leaves a bitter taste in the mouth as it has been done without in-depth knowledge of the hotel industry and the issues that are affecting the majority of owners,” he explained.

“Rate parity is the biggest issue for most independent hotels because in theory it means they are not allowed to have the best deals on their own website.

“Even some of the bigger brands are struggling in some locations because people aren’t even going on the branded websites now and the OTAs have so much power.”

Lowy said that it could be another ten years before the OFT investigated the issue again, by which time independent hotels could be facing real problems.

“I think that at some point we need to challenge the OTAs as a group of independent hoteliers and explain the issues from the smaller operators’ point of view," he said.

Fighting back​

Lowy said that in the meantime, independent hotels should turn to traditional marketing methods to encourage customers to book directly, as well as making the most of social media and their own websites to offer special deals and encourage direct bookings.

“Hotels have got to really start concentrating on the old school stuff that they used to do, like handing out brochures encouraging people to book directly for the best value, or offering packages – which the OTAs don’t generally do – and discount vouchers," he said.

“By offering amazing service within their product package and trying hard to capture guests who ultimately want to book direct in the future, the OTA’s can be bypassed and independent accommodation providers will save on those crazy commissions.”