Stop giving away your margins: The real cost of relying on OTAs for bookings

Online Travel Agencies (OTAs) such as MakeMyTrip, Booking, Expedia, and Agoda may appear to be crucial support for hotels, but depending on them can be quite costly. While they enhance visibility, the hidden fees associated with their services often overshadow the advantages. This article delves into the true costs of relying on OTAs and provides practical steps to pivot towards a direct booking approach, allowing you to regain control over your revenue.

Key issues with OTA dependency

1. Hidden commission costs that drain your revenue

2. Lack of access to valuable customer data

3. Missed opportunities for remarketing and loyalty-building

Building a direct booking strategy: Steps to Take

• Optimize your website for seamless bookings.

• Leverage meta-search engines for increased visibility.

• Use personalized offers to attract and retain customers.

The hidden commission costs of OTAs

Every booking made through an OTA incurs a substantial commission fee, typically 18-30%. This can quickly accumulate for mid-to-high-volume hotels, significantly impacting your profit margins. Although OTAs claim to provide better visibility, this comes at a steep cost to your earnings.

For example, if your room rate is ₹10,000 per night and the OTA takes a 20% commission, you lose ₹2,000 for each booking. When you consider hundreds of bookings, the financial consequences become painfully clear.

Solution: Shifting to direct bookings allows you to keep 100% of the revenue, which can be reinvested into enhancing customer experiences or marketing initiatives.

Limited customer data access

When guests book through OTAs, your access to their data is limited. This results in:

• Inability to personalize guest experiences.

• Missed chances to retarget them with future offers.

• Challenges in fostering long-term loyalty.

OTAs intentionally retain control of customer data to sustain their power in the booking landscape, leaving you reliant on them for repeat business.

Solution: By promoting direct bookings, you gain complete access to customer data.

Steps to build a direct booking strategy

1. Optimize your website for seamless bookings

Your website is your digital storefront. Ensure it is:

• Mobile-friendly and fast-loading.

• Equipped with an intuitive booking engine.

• Designed with compelling visuals and a clear value proposition.

2. Leverage meta-search engines

Platforms like Google Hotel Ads and TripAdvisor allow you to appear alongside OTAs while directing users to book directly on your site. Invest in these tools to stay competitive while reducing reliance on OTAs.

3. Offer personalized incentives

• Encourage direct bookings by offering:

• Discounts or perks (e.g., complimentary breakfast or late check-out).

• Exclusive offers for loyalty members.

• Custom packages tailored to guest preferences.

How Groivy can help

At Groivy, we specialize in helping hotels reduce OTA dependency and grow their direct bookings. Here's how we can assist:

• Website Optimization: We create fast, user-friendly websites designed to convert visitors into direct bookings.

• Meta Search Management: Our experts help you leverage meta-search platforms to increase visibility and drive traffic.

• Targeted Campaigns: We design personalized ad campaigns that attract the right audience to your website.

With Groivy, you can reclaim your margins, own your customer relationships, and increase your revenue. Let us show you how to build a sustainable direct booking strategy that puts you back in control.