Metasearch vs OTAs vs Direct Bookings
Distribution?
〰️
Distribution? 〰️
Metasearch vs OTAs vs Direct Bookings
There are several different ways to get bookings for your property online. Some owners prefer the book direct approach where they create their own brand, others like to list their property with online travel agencies and now owners are even starting to explore the use of metasearch sites.
In today's article, we will be discussing the advantages and disadvantages of them all, to help you decide what will best suit you and your business.
Have you currently got a distribution strategy for your property?
Direct Bookings
Let's start with our favourite, the direct booking strategy. This movement has become increasingly popular for property owners as it allows them to regain their power, have full creative control and not be a slave to big corporations that can charge whatever commission they want. The idea is that as a property owner, you create your own brand in which your customers book through. Creating that direct relationship between you and your customer, rather than a business like Airbnb being the middleman.
The advantages
- Creative control on how you market your property
- Direct bookings give you a one on one relationship with guests
- No commissions paid to online travel agencies
- Increased life time value of each customer
- Lower customer acquisition costs
- Builds your own brand rather than someone else's
- Attract more guests with competitive prices (No need to add an extra 15% to cover fees)
- Tailor your offer to reflect your guests personal needs
- Access to important data
- Easily maintain communication with guests during the pre stay phase
- Have the ability to cross and upsell
The disadvantages
- Upfront cost of website design
- Ongoing expenses for hosting, domains, booking systems etc
- Driving your own traffic to the site
- No pre existing pool of warm customers
Online travel agencies (OTA’s)
Next up we have the popular use of online travel agencies like Airbnb and Booking.com. These are widely used by property owners that want to list their properties on established platforms, leveraging the users that are going to their sites to actively book a stay. It removes the need to create your own brand as OTA’s essentially do the marketing for you.
The advantages
- Access to active bookers worldwide
- Region specific filtering system
- Brand awareness
- Trusted platforms
- Warm traffic
- Marketing promotion
- Booking process dealt with
- Reduces your online marketing spend
- Impartial reviews may give new customers the confidence to book
The disadvantages
- Commission fees for some channels can be as high as 15% per booking
- You get very little access to information about your guests
- Less control, over a guests experience
- Not the first point of contact for a guest which creates a disconnect
- Restrictive terms and conditions
Metasearch
A metasearch site compiles travel data for potential bookers to help them make a decision on where to stay. They allow people to compare prices across multiple websites and then property owners bid on advertising placements. It’s a non commission model that is rising in popularity as it is fairly similar to Google's PPC advertising. A property owner will set a budget for how much they are willing to bid for a click and the goal is to convert those clicks into bookings. Kayak and TripAdvisor are popular examples of metasearch engines, which you may have used before.
The advantages
- Visibility of your hotel during traveler research
- Drives traffic to your site rather than to an OTA
- Allows you to control the guest experience
- Pay for performance
- Non commission model
- Removes the dependence on OTA’s
The disadvantages
- Can’t book directly on a metasearch engine, so there’s more chance of them losing interest before they finalize their booking
- Metasearch engines can increase the competition at the local level, as travelers are often searching for hotels in a particular city or destination
- Lower conversion rates
- Can often cause confusion for the user, which increases your bounce rate
- Competing in an open auction for clicks (pay to win)
Conclusion
Each booking source has its ups and downs but the overall goal remains the same. You need to create a winning distribution strategy that maximizes your properties booking potential. Hopefully, we have given you enough insight to make a well informed decision about which direction you want to take your business. If you do want to have a chat with us at Hostimize, drop us an email or a message on Instagram and we can book in a time to have a call. For now though, we wish you good luck and all the best on your property businesses journey.