Online travel agencies: help or hindrance?
SHTM lecturer Brigitte Stangl explores how hoteliers stay competitive in an increasingly complex world of tourism marketing and distribution.
From Booking.com and Expedia to Travel Supermarket and eBookers, many online travel agencies (OTA) have cropped up over the years, increasing the complexity of how tourism providers get their product out there for potential customers to see.
Consequently, hotel owners face challenges marketing and selling their business in an increasingly multifaceted distribution environment. How can a hotelier stay competitive in an environment where customers can conveniently order the whole tourism experience in a ‘one-stop shop’ offered by OTAs, where the competitor is just one click away?
Along with fellow researchers, Brigitte set out to investigate the various distribution channels hoteliers opt for, the differences between their choices and their success rate. Who depends on a strong OTA presence? Who relies on more traditional direct bookings through walk-ins, telephone, email or webform?
The team conducted 1,014 questionnaires with hoteliers in Germany, Austria and Switzerland. The findings show that Germany and Switzerland have a higher dependency on securing bookings through OTAs than Austria, which has the greatest share of direct bookings, particularly via email. According to the researchers, this is perhaps because Austrian hotels use more ICT tools and are ahead of Germany and Switzerland when it comes to adopting technology.
The findings also suggest that while OTAs have wide market coverage, it can be an expensive channel, and hoteliers dependent on them have less control. Smaller hotels, who use the least amount of OTAs, acquire more direct bookings via webforms and email, which are less expensive channels.
In conclusion, the researchers suggest that hoteliers in Germany and Switzerland would benefit from observing how Austrian hoteliers are more successful in terms of direct bookings via webform and email. How are their websites designed, and how do they trigger selling products directly to the customer?
They also suggest that hoteliers more reliant on OTAs need to make sure OTAs aren’t taking control of their product and marketing strategy – they need to constantly monitor their relationships to maximise the value gained from being part of a distribution network. Perhaps, ultimately, they can learn to cut out the middle man and convince travellers to book directly by investing in attractive and well-positioned websites.