Know your bottom line
No matter the size of your property, you will need to work with Online Travel Agents (OTAs). Online travel agents can increase your bookings and your revenue. They can also increase your expenses. It is important to know the pros and cons of each channel and decide what is best for your business plan. You also need to know that you can not put OTA’s on autopilot. With each OTA you need to manage and adjust frequently. There are daily opportunities to sell last-minute rooms. By monitoring the options and adjusting rates and packages you can capitalize on your waisting assets. Every day you do not sell a room is revenue you lost. Understanding your bottom line is important in the OTA game. If it costs you approximately $60.00 to host a guest (all amenities and staff costs per room) then you need to adjust pricing to make sure you receive a profit from each guest. The OTA’s are great at bringing guests but the fees associated with the OTA’s could eat at your profit. But, if you have a clear understanding of the expenses, you can definitely leverage the marketing power of the OTA’s.
In addition to knowing the fees associated with OTA’s you need to understand the market that each OTA caters to. Booking.com caters to the International market, Expedia caters to business and leisure package customers and Airbnb’s market is expanding to try to capture everyone. In addition to those channels, there is C-trip and eLong that cater to the Chinese market. I only mention a few here to help you understand that not all OTA’s are the same. Decide your market and your OTA decision will be easier to make.
The Property Management System you choose will also be important in this decision. There is a false idea that if you have a small property, you should only be associated with a limited number of OTA’s. Your property management system should have a channel manager associated with it. The channel manager portion of your PMS is so important. Even if you have a limited number of rooms, you want to be on many channels. The channel manager will control your inventory and prevent overbookings. The pricing of decent PMS systems have come down and there are good options out there. The decision for a PMS system should be reviewed each year in your slow season.
Ok, so I did not give a concrete list of the OTA’s I recommend for small lodgings. I definitely favor some and get frustrated by others. Each property is different. Your work and revenue goals need to be assessed before committing to online marketing. If you would like, give me call, we can discuss.