Hotelintel.co recently had the pleasure of a chat with the new Chief Operating Officer of Centara Hotels and Resorts, Markland Blaiklock, who told us all about Centara’s latest initiatives. However, that wasn’t all that Markland had to say…
One statistic set the ball rolling – the observation that in Hong Kong, around 70% of room sales are at the rack rate, whereas in Thailand the figure is far lower. Markland was quick to concede that for Thailand, “the perception is first that it’s cheap, and that has to change. The rates we’re selling are very much market driven, but the gap here is bigger than in Hong Kong.”
One reason for this gap is the increasing number of rooms that hotels make available through OTAs. “It’s easy to just turn it on and leave it alone,” Markland commented, “and before you know it, it’s all of your hotel.” Markland took the view that while some owners might push occupancy at all costs, it was more important to “drive that business through your branded website because then the costs are way lower.” He added that one way to persuade owners of this is to show them the net rate paid to the hotel after the OTAs have taken their cut. This is all perfectly logical of course, but it’s easier said than done to drive traffic directly to the hotel website and cut out the middleman.
Customers often believe they can find better deals via an OTA than via the hotel’s own website, but Markland insisted that for Centara this is definitely not the case. The problem was that “these third parties throw so much money at it – they are so in your face that people don’t necessarily think to contact the hotel. They just see the rate there advertised as a huge discount and they grab it.” This represents quite a challenge for hotels, despite the fact that in terms of prices, Markland was adamant that “we have parity; very few times you’d find a lower rate through an OTA than on the hotel website.”
We decided to check out that statement with a random selection of Centara properties in Hua Hin, Sri Lanka and the Maldives for a two-night stay in mid-March. The results left Markland entirely vindicated. In Hua Hin and Sri Lanka, Agoda, Booking.com and the hotel’s own site offered identical rates. In the Maldives, the prices were identical, but the mandatory seaplane transfer was substantially cheaper through the hotel’s own site.
However, there is no room for complacency. A regular Google search for the Centara Grand Beach Resort in Hua Hin generates a list of results which opens with ads for Agoda and Expedia before presenting a link to the hotel site. A picture of the hotel appears at the side of the page, where you can compare rates and make a booking – but all the options are via the OTAs. Using Google Hotel Finder to search for the hotel by name reveals a price comparison and the option to book via Booking.com, Travelocity or Expedia. A link to the hotel site appears eventually, a long way down the page, but doesn’t link to the reservation page.
Google Hotel Finder derives much of its data through the OTAs, so if you’re not listed with them you won’t appear, and if you are listed you’ll be paying their commissions. As the overall trend for hotel searches shifts towards this kind of meta-search, the best option for hotels will be to sign up with Google on a pay-per-click basis so that the hotel site itself will appear alongside the OTAs as one of the booking options. This is an opportunity to drive traffic to the branded website and cut out the OTA – but only if you’re offering the best deal.
If hotels are not proactive in entering partnerships with Google, the OTAs therefore stand to gain as the most easily accessible booking option. In the long run, however, Google Hotel Finder might just be the best way for hotels to connect directly with customers..