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Revenue “leaked” from the hotel industry to the OTAs in the form of abnormally high merchant commissions of 25% and higher will reach $5.4 billion in 2010 according to Hospitality eBusiness Strategies. Yet hoteliers do not have many options when considering non-OTA distribution channels.
This leakage must be stopped and reversed as it drains the hospitality industry`s bottom line and threatens the mere survival of the industry, the company says.
With GDS and voice channels in perpetual decline, hoteliers do not have many options when considering non-OTA distribution channels. The only viable option to drastically reduce reliance on the OTA channel is for the industry to embrace the Direct Online Channel.
Hoteliers need a robust Direct Online Channel Strategy, accompanied by adequate marketing funds, to be able to take advantage of the steady growth in the Internet channel and shift from offline to online bookings in hospitality due to declining GDS and voice channels. Hoteliers must carefully employ ROI-centric initiatives, including website redesign, website optimization and SEO, paid search, email marketing, online display advertising, and proven social media and mobile marketing initiatives.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
