Anecdotal evidence suggests that a lot of people are now finding out the hard way that when you book flights and hotels through an OTA, handing over your money is a whole lot smoother than getting it back again – but will these same customers put two and two together and book direct next time? A lot will depend on how hotels handle the current situation, so asked a number of leading industry figures what they are doing to help their guests while cancellations outnumber bookings, and whether they see an opportunity to alter the distribution channel balance in their favor when the recovery comes.

Torsten Richter, General Manager at The Jaffa, Tel Aviv, gave an excellent overview.

First of all, most international hotel companies are available for their guests, while OTAs are nearly impossible to reach, or you are dealing with a chat robot which is insufficiently programmed, causing clients to stress about their vacations and leaving them with no response. I’m going through the same with a vacation I booked via Expedia for May – truly a disaster. But hotels can allow you to cancel, or postpone to the same conditions if the new dates aren’t in a peak period, which is a massive advantage over the OTAs. That is where we will strengthen loyalty with our guests. At my hotel we have returned deposits to all guests who asked, and I believe this will leave a much more positive impression than sticking by some corporate policy the OTAs refer to, which will backfire eventually.”

This view was generally endorsed from an Australian perspective by Justin Jones, Director of Sales & Marketing at Accor, who added that many customers are only just now waking up to the lesson that dealing with the OTAs often isn’t as convenient as they imagined.

The current market condition for tourism in general is consumer panic. This panic is about cancellation, amendments, wait times, and general worries about booking terms and conditions, which ultimately leads to… ‘How much money will I lose?’”

In my opinion we do need to be careful how we demonstrate our stronger position, if there is one at hotel level, when referring to direct vs OTA bookings as we don’t want to come across to consumers with a negative tone, or sounding like we have another sales pitch at a time of crisis and uncertainty. Quite simply though, the consumer will dictate who holds the stronger position in the long term as many don’t realize that when booking via an OTA, they cannot simply contact the hotel for cancellations or booking amendments. When booking via an external party, the consumer is required to reach out to the booking agency which can in turn take time and cause more frustration and uncertainty, while those who booked via direct channels can call, email, or simply modify bookings via their loyalty or online portals.”

With suggestions how hotels might make the most of any opportunities placed before them, Chetan Patel, Vice President, Digital & CRM at ONYX Hospitality, commented that hotels haven’t always had the best track record in turning circumstances to their advantage. What hotels ought to be doing is as follows:

Empathy is important. We’ve had guests who communicate to us for refunds of prepaid bookings where an OTA partner refused even though we waived those charges to the OTA,” he said. “This is the time to show empathy to guests that are struggling to get home, change their travel plans or get refunds. No-one intended for this pandemic to happen. When the situation turns around, guests will think of you first before considering other options. We will not be offering any non-refundable rates for some time to come.”

Engage guests on all channels including the hotel’s own websites, social media, email communication and advertising. The strategy should be to make them aware of all the advantages and perks of booking direct and staying in touch. Hotels should also do their utmost to market the assurance, flexibility, hygiene, and safe-distancing related messages for some time to come. OTAs may struggle to adapt this message due to inconsistencies in responses by the listed properties. Hotels have great control and can get ahead with their messaging here.”

Of course, it is also important to remember that the OTAs are also struggling, and they are, partners in distribution, as Sunny Yu, Head of Commercial Performance & Brand Activation at JA Resorts & Hotels, explained.

It’s not really a question of going against OTAs, but rather how we can work together with them, and then internally in the hotel get our percentage and mix balanced correctly. I see OTAs and hotels are strategic partners in this industry. Frankly speaking, OTAs are a permanent part of the global tourism ecosystem, and they have their unique specializations, such as wider coverage than an individual hotel or a small/medium sized hotel group. What hotels should focus on is our strengths in working efficiently to maximize revenue across the channels.”

What we do need to make sure is that there is no rate parity in the market – there is no lower rate than your own website – and of course that your wholesalers will not sell wholesale price on OTA channels. There are a lot of those situations we need to monitor all the time,” she said.

Your own website is always the lowest rate with the Loyalty Program. We work together with the Loyalty Team to make sure we have the best suited program, tactical campaigns and localized content to drive direct bookings. All our digital and marketing investment should feed back to our own channels, and likewise we need to make sure those channels are well established in feeder markets with in-language content, SEO, and SEM to ensure a smooth booking journey. Hotels who don’t have their own in-language and integrated booking channels need to assess if now is a good time to focus and build this area.”

Eugene Oelofse, Marketing & Communications Director, Hilton (Malaysia, Philippines, Vietnam) agreed that cooperation is necessary.

OTAs provide a very powerful distribution link to customers to which otherwise some hotel groups would not have access. The OTAs are synonymous with large acquisition budgets which hotels can simply not compete with, therefore the hotels should not be treating the OTAs as the enemy but embracing the business being delivered to our doors. The opportunity exists in the hotels converting those guests into direct customers through the experience delivered and relationships fostered throughout the stay. Every moment is an opportunity to impress with some level of personalization, sharing what we know as the light and warmth of hospitality.”

When it comes to helping out guests right now, it is usually the case that the best outcomes for those guests usually arise when they are loyalty members, or at least have booked direct through the hotel website.

As Chetan explains, “If the hotel websites are easily accessible and booking and payment options are widely available, there is hardly any situation where it is more beneficial for guests to book via OTAs.”

We are communicating with guests proactively, enabling flexible cancellations and refunds even on prepaid rates. We have value added options that are available to direct bookers only. We give higher value/credits to those willing to amend instead of cancel their bookings. This is on the top of member rates and perks that are always available to those who sign up (for free) to our loyalty program.”

Most of these options are not available to OTA guests.”

This course of action was supported by Eugene, who listed similar measures which were taken to support guests who had joined loyalty programs, adding that “The benefits are only applicable to our Hilton Honors members.”

Justin concurred, noting that, “As always, our direct bookers, many being members, receive entitlements and benefits that those booking via an OTA do not. That being said, no matter what channel a booking arrives from in these times of crisis and uncertainty – simply the warmth of a smile or the indication of arrival to a safe and comfortable environment is all a guest needs and we provide that day by day, hour by hour, no matter how they have booked.”

Without mentioning potential benefits to which members may have exclusive entitlement, Sunny explained that, “We want to ensure all our guests are well protected during these uncertain times, regardless of the channel they may have used to book with our hotels. So, in short, cancellation and change policies are the same across all our channels.”

With the best will in the world on the part of hotels, however, the crisis does underline the one major drawback of the OTA business from the customer perspective, as Thorsten pointed out, and therein lies the opportunity.

We are flexible, and offer guests the chance to re-book, and if the booking is pre-paid then we can change the booking, but the OTA needs to be involved, which is slow and frustrating for both hotel and guest.”

I would say we can encourage direct booking, and when guests have gone through this painful experience dealing with OTAs which just don’t reply or do not answer phones, that’s an opportunity to build the bridge. I believe you will see a natural move from OTA to direct in the future.”

Or as Chetan succinctly put it, “Once guests start seeing consistent upsides to booking direct, they will continue to do so.”