What is OTA in The Hotel Industry?

OTA stands for Online Travel Agent, which is an online platform that connects travelers with hotel businesses and other accommodations through websites and applications. OTA acts as an intermediary, helping travelers to search, compare, and book accommodations quickly and conveniently without having to contact the hotels directly.

Examples of Popular OTAs

• Agoda
• Booking.com
• Traveloka
• Expedia
• Trip.com

Benefits of OTAs for Hotel Businesses

Wider Customer Reach

OTAs have a large number of users worldwide, helping hotels to expand their customer base to new groups more easily.

Increased Bookings

OTAs attract travelers who are looking for accommodations through their search, price comparison, and promotional systems.

Reduced Marketing Costs

Instead of investing in multiple marketing channels, hotels can rely on OTAs to effectively promote their accommodations.

Convenient Booking Management

OTAs help manage the booking system, update room availability, handle payments, and automatically send booking information to the hotels.

However, OTAs also have disadvantages for hotel businesses

Commission Fees

Hotels have to pay commissions to OTAs, which are about 15-30% of the room rate per booking.

Loss of Price Control

Hotels may lose control over room prices on OTAs as some OTAs might offer lower prices than the actual rates on the hotel’s website.

High Competition

OTAs host many hotels on the same platform, making it competitive for hotels to attract travelers' attention.

Strategies for Hotels to Use OTAs Effectively

Compare Commissions from Multiple OTAs

Choose OTAs that offer commission rates suitable for the business.

Maintain Accurate Room Availability Information

Update room availability on OTAs regularly to avoid overbooking issues.

Offer Special Promotions on OTAs

Attract travelers with special promotions that are not available on the hotel’s website.

Maintain Customer Relationships

Collect customer data from OTAs to use in direct marketing.

Analyze Booking Data

Analyze booking data from OTAs to adjust marketing strategies accordingly.

In addition to the aforementioned strategies, reducing dependency on OTAs is also a top priority that hotels should consider to increase long-term profitability.

In summary, OTAs are useful tools for hotel businesses, but hotels need to use them wisely to maximize benefits and minimize potential drawbacks.