How Your Own Data Resets the Hotel-OTA Relationship on Better Terms

by Mark Brandau, Director of Content | March 13, 2018

If hotel distribution is the love-hate relationship that hoteliers described in a recent HEDNA survey, it’s time for friends and partners of the hotel industry to stage an intervention and break properties out of this codependent setup.

The survey of more than 1,050 properties, conducted by the Hotel Analytics Work Group of the Hotel Electronic Distribution Network Association and recapped in February by Phocuswire, compiled responses from chain and independent hotels and management companies. HEDNA co-authored a report with SnapShot and Triometric.

Much of the study focuses on hotels’ relationship with online travel agencies. The numbers from the report paint a picture of heavy reliance — perhaps over-reliance — on OTAs for securing bookings:

  • According to HEDNA’s study, chain hotels rely on OTAs for distribution in a particularly big way, with three in five chain properties listing between 10% and 50% of their rooms on an OTA. Nearly one in three chain properties used this channel for more than half of their rooms.
  • Management companies showed a similar dependency: 59% of those firms listed 10% to 50% of their rooms on an OTA, and 29% of them moved more than half their inventory via OTAs.
  • Only 39% of independent hotels listed between 10% and 50% of their rooms with OTAs. However, a greater portion of independents relied on OTAs for more than half their distribution, at 37% of such properties.
Learn best practices for taking back control of hotel distribution and balancing direct bookings with OTA partnerships in Duetto’s newest whitepaper

Hotels Seek Better Data from Distribution Channels

Hotelier respondents also gave HEDNA a sense of how much these different channels shared data and analytics to help hotels make pricing and distribution decisions. It would appear that many third-party distributors take more than they give when it comes to data:

  • Wholesalers, metasearch engines, and late-booking or last-minute channels were most likely to give no access to any data.
  • OTAs were characterized in the study as providing the best data. Three in 10 properties reported getting real-time information or daily analytics from OTAs.
  • Overall, respondents identified data quality and data “cleanliness” as the biggest challenge in getting information from online distribution partners.
  • One in 10 respondents said both internal integrations and staff training were concerns. In addition, 15% of properties cited integration among source systems and external systems as a key concern.

Hotels — not OTAs — Have the Best Data

Remember how I started this blog post by calling the hotel-OTA relationship a codependent one? That’s because there’s more to it than hotels listing their rates and availability with Expedia or Booking.com. Those two companies have become massive over the past two decades, but for all their gargantuan size, they still need hotels’ inventory to make money and grow.

Properties own that inventory, but there’s another crucial asset they hold that OTAs can’t match: customer spending data, including and especially folio data. Distribution partners can’t access what hotels hold in their systems for property management, revenue management or CRM.

Of course, the OTAs are sitting on millions of data points of their own, thanks to the millions of room listings, transactions and bookings that occur across all their platforms every day. But that is surface-level information — how many bookings came to your hotel through that OTA, and the price those guests paid to make the reservation.

As Duetto CEO Patrick Bosworth put it recently in Lodging Magazine, “hoteliers make better decisions with depth, not just breadth.”

“OTA-sourced reservations and rate shops produce very basic recommendations,” Bosworth wrote. “They can scrape thousands of competitor rates, yet if that’s a hotel’s sole basis for yielding its own prices, it is still largely just following the market.”

His point was responding to news of Expedia and Booking.com offering basic revenue management tools (Rev+ and BookingSuite, respectively) based on the OTAs’ data. The point to remember is that you don’t need their data; everything you need to elevate your pricing and distribution to a better hotel Revenue Strategy you already have within your PMS, CRM and RMS.

With a firm grasp on your hotel’s historical performance, the customer preference data from your CRM and, most importantly, actual on-property spending from folio data, you can start setting your room rates for the highest level of revenue that still convert into direct bookings. The basis of Open Pricing is setting those rates independently by room type, customer segment, booking channel and stay date, then seeing how changes in pricing affect demand, and adjusting accordingly for maximum profit.

With so much hotel data accessible to hotels, they don’t need to depend on OTAs for anything more than what those distribution channels were originally conceived to do: driving bookings during need periods with their outsized marketing reach.

HEDNA, Triometric and SnapShot will present their findings from the report in a webinar on March 20. You can register for that event here.

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Mark Brandau, Director of Content

Mark joined Duetto in January 2016 from market research firm Technomic, where he began his content marketing career after nearly a decade as a business-to-business journalist covering the restaurant industry. As assistant director of content, he helps steer the creation and promotion of all Duetto's content across its blog, video and social-media platforms, as well as sales collateral and internal communications.

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