If you only watched a few hours of TV in 2014, it was almost impossible to miss the endless supply of commercials from online travel agents (OTAs). Their popularity turned fictional pitchmen, like “Captain Obvious” and “The Trivago Guy,” into overnight celebrities. This was the result of eighteen top OTAs, including Expedia, Hotwire, Hotels.com and Booking.com, collectively spending almost $625 million on TV advertising in the United States.
OTAs will always have critics who believe their fees aren’t equal to the value of delivered bookings. While ROI may be debatable, the $625 million investment OTAs made in attracting travelers for their hospitality partners is undeniable. Here’s why we believe independent hoteliers should continue to lean on OTAs to help drive their business:
Introducing independent hotels to global audiences
The internet is the top source for travel planning for both leisure and business travelers, with 74% and 77% of each segment turning to the web, respectively. These numbers showcase just how important it is for independent hotels to have a strong presence on the web. Simply having a website is not enough if operators want to achieve long-term, sustainable success. To complete globally, hotels need to grab travelers’ attention and drive them to booking engines, direct or 3rd party, which capture reservations and revenue. Having relationships with multiple OTAs supplies hoteliers with these booking channels and allows them to compete in the global marketplace.
Enhancing recognition and reputation for independent hotels
Generating name recognition and establishing a reputation is an ongoing challenge for independent hoteliers. However, with OTAs doing some of the heavy lifting, operators can better position their hotels faster and with much less effort. Travelers may not know the name of your hotel yet, but they’re already familiar with OTAs like Expedia and Hotwire, especially since Expedia spent $105.8 million to air over 41,000 TV commercials and Hotwire ran 39,600 ads after spending $92 million last year. By ensuring their brands remain “front of mind” with travelers, OTAs create more opportunities for travelers to find hotels and book revenue-driving reservations – a critical step toward solidifying brand recognition and reputation for independent operators.
Varying independent hotels’ marketing strategies
Independent hoteliers shouldn’t rely on OTAs as their sole marketing tactic, but they should incorporate them into their overall marketing strategy. As mentioned above, they extend a property’s online reach and help enhance brand recognition. But most importantly, they invest the dollars needed to effectively position themselves in the marketplace on the behalf of their hospitality partners. With a $625 million marketing spend in 2014 and a record number of tourists expected to visit to the U.S. over the coming years, independent hoteliers can expect OTAs to continue putting forth the dollars needed to drive reservations and revenue for their partners.