November 8, 2017

OTAs: Your Best Friend or a Must Have Adversary?

Have you heard the buzz? If so, are you confused about the big changes in the bed and breakfast industry? As a brief update: If you’re not sure what I’m talking about BedandBreakfast(dot)com has changed their business model from a directory to an OTA. I didn’t have inside information; however, in my post last month I predicted this inevitable direction our industry was taking. Now, more than ever, it’s imperative to understand the important differences between directories and OTAs (online travel agencies). 
A Look Back at Bed & Breakfast Advertising. 

In the late 1990s (long before Google and Trip Advisor) bed & breakfast innkeepers were able to promote their properties on a level playing field with large hotels by listing in over 150 online directories including the three most popular: bedandbreakfast (dot) com, bbonline, and Bed & Breakfast directories were, and still are, a combination of a guidebook and search engine for guests to directly find properties. Today, the trend in travel is for local experiences, emphasizing the connection that B&B directories provide between travelers and properties is very important.
The Comparison

Commissions. Directories typically do not charge a commission, meaning innkeepers don’t pay a percentage of their revenue for EVERY reservation. Rather directories charge a small annual fee for properties to be listed and then connect guests directly with the bed & breakfast inn. 
Whose Brand Is It? Whose Customer Is It? Who Controls the Money? When guests book on OTAs the OTAs determine what guest information is shared with the property as well as when payment is passed through to the innkeeper. In contrast, directories link guests directly to the property’s website and are not involved in the reservation process. All communication is between the guest and the property enabling innkeepers to control their brand as well as the ability to enrich the guest experience and upsell activities and amenities. This provides a greater opportunity to enhance guest satisfaction and increase inn revenue. As a side note, links that directories provide to the property’s website help the property’s own SEO (Search Engine Optimization).
Who Makes the Rules? OTAs typically set deposit and cancellation policies that often vary greatly from the inns’ own policies. Directories normally do not involve themselves in these business decisions.

Which Costs More? That depends and innkeepers need to have Universal Analytics with E-Commerce Tracking reports in order to evaluate the full benefits of directories and OTAs.

A Look into the Future of Bed & Breakfast Advertising.

OTAs are big business with large advertising budgets, demanding a premium for performance in a sea of sameness. Without support from the innkeepers for the directory model, it may cease to exist and then OTAs will be the only advertising option. Let’s not let this happen!

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