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For accommodation businesses like hotels, B&Bs and self-catering units, there are pros and cons to using online travel agents (OTAs) to sell your facilities. OTAs include online accommodation booking sites like Hotels.com and Trivago. 

Advantages of online travel agents

OTAs give you instant access to a large number of potential customers. Possible advantages of using an online travel agent to sell your service include:

• It can be a more cost effective way to get exposure for your property.
• They can reduce your online marketing spend as OTAs will often heavily invest in marketing and advertising to attract potential international customers, which may be too excessive for an individual operator.
• A reduction in your website costs. OTAs are keen to provide a positive online experience for customers through good website design and functionality.
• Online travel websites are popular with customers who like to compare accommodation costs and the services offered by individual providers.
• Impartial reviews on online travel websites may give new customers the confidence to book. Consumers may initially feel more secure using an OTA they are familiar with than booking directly with an individual operator or website.

Disadvantages of online travel agents

There may also be some disadvantages to using online travel agents. These include:

• Online travel agents often charge commission on every sale. This can range between 10-25% of the gross cost.
• There may be restrictive terms and conditions imposed by OTAs such as guest cancellation and automatic room reselling policies.
• You may need to find a way of managing room availability across a range of OTAs, your own website, front desk and telephone sales. This can be time consuming and labour intensive. There are software options also known as channel manager websites to help you manage this. They can show your availability on a number of OTA platforms using one calendar to reduce the risk of overbooking.
• Using OTAs does not reduce the need to have your own website with a booking engine; having your own dedicated website with a booking engine can allow you to get bookings at low commission rates.
• You may still need to invest in a balanced multi-channel marketing strategy.

Although online travel agents can help you fill rooms, it is important to maximise your most profitable revenues through sales on your own website. You should continually work on your search engine optimisation tactics and other digital marketing techniques. Focus on customer retention tactics. Directly target your existing customers (including those gained through OTAs) through email and direct marketing.

Consider the differences between various online travel agents and accommodation booking websites and what they can offer your business. Here is a list of factors that may affect your decision in terms of who you choose:

• Is there a minimum contract length?
• What are the contract options (eg partnership, affiliate, reseller etc)?
• What are the commission rates, set-up costs and payment terms?
• How do you rate their website (eg design, layout and target audience)?
• What countries do they market to?
• What booking platforms do they use (eg website, phone, mobile site, mobile app, affiliates)?
• What customer payment options do they offer (eg payment terms, booking fee, multicurrency payments, cancellation policies and options)
• Types of rates and offers (eg room only, packages with meals, advance purchase)
• Will their booking systems integrate with your systems?
• What languages do they offer?
• Do they provide an online reporting system?
• Will they provide training on their systems? What marketing channels do they use (eg online, outdoor, radio, press, social media etc)?
• What are their customer communication channels (eg newsletter, social media, app, affiliates etc)?

Remember that you do not need to work with every online travel agent or booking website. Choose the providers that will work best with your business and marketing strategy.

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.