Selling through online travel agents

Online travel agents and accommodation booking websites can help you attract new customers but could also reduce your profit margins. Here are some tips on how you can get the most from using online travel agents (OTAs) and take opportunities to increase revenue through other channels. 

1. Set clear goals

Decide what you want to achieve before you start working with OTAs and aim to build a good relationship with them. Be clear about what your goals and objectives are and communicate these to the OTA to get the best service.

2. Choose the right OTAs

Evaluate OTAs to ensure they will deliver the right type of customer, within your target market. OTAs should primarily be used to attract business that you would not have got through other (more cost-effective) means. Ideally, using an OTA will lead to return direct business with customers who originally found you through an OTA. You do not need to work with every single OTA, so choose the ones that work best for your business.

3. Manage commission rates

Be careful about the commission you are being charged. Ensure that you only agree to a profitable commission. Commission is typically 10-25%, but you may have the opportunity to negotiate. High commissions will only be worth it if the travel agent is delivering a high number of sales. Some OTAs will offer you "preferred" status for higher commission, giving you extra promotion above other clients.  This may be worth considering if you have a lot of competition but ensure that the OTA can prove the value of this partnership.

4. Don't over allocate

Avoid allocating too many rooms to OTAs. Ensure that you have enough vacancies to sell through other more profitable channels.

5. Offer discounts to specific groups

Check for any rate parity agreements, which may restrict you from offering cheaper rates on your website than those you offer through the OTAs. You should however take advantage of being able to offer special rates to your "closed group" customers. These include; returning customers, social media followers and those who have registered to receive email newsletters. Another option is to offer special package rates that include add-ons such as concert tickets, spa treatments or restaurant vouchers and are only available on your website.

6. Black-out dates

If you are confident that you will be fully booked on a certain date without much marketing investment, for example, if you are located near a major event that attracts many visitors, you could prevent OTAs from selling on those dates to maximise revenues from direct bookings.