OTA Vs Direct Bookings: How To Find The Right Balance

The debate around focusing on OTA vs direct booking channels is not a new one. There are advantages and intricacies related to each revenue model.

Until recently, many tour operators have relied on OTAs as a source of bookings for their business. While this has ground to a halt due to the pandemic, travel businesses are using the time to re-evaluate their processes and work out the best route to recovery when travel resumes and demand picks up.

Expanding Revenue Streams In A Post COVID-19 Market

Given the loss in revenue over the last few months, it’s understandable that tour operators would look to maximize revenue and profitability to get their business back on track.

However, maintaining the quality of your tours, protecting your clients, and enforcing the necessary safety measures may mean having to figure out ways to generate more revenue from fewer travelers for the time being.

It's going to be a case of hanging onto a bigger portion of the income that you bring in.

One way to do this would be to increase your prices. Obviously, this has to be within the range of what your new market is willing to pay.

It could also mean expanding your sales channel mix to widen your reach. If you’ve decided to adapt and start offering new local experiences, then forming a new local partner network would have been on your agenda. This network is designed to support and promote each other’s products.

Then, if you have been relying on Online Travel Agency platforms to deliver a large portion of your bookings, now is a good time to find a balance and encourage direct reservations instead.

Here’s why.

The Relationship Between Tour Operators and OTAs

By all means, using OTAs in your channel mix for bookings can generate much-needed revenue for your business.

They Are Known Globally

Travelers know the sites by name and know that they can search and find tours and activities on them.

On the other hand, travelers may not know your business by name. So, unless you’re on top of the SEO game, or are paying for adverts, it’s difficult to come out ahead of these platforms organically in Google search results.

They Have The Budget For Advertising

Even if you are using paid adverts to increase your visibility, your budget is likely not as large as theirs for the more general keywords.

By listing on the sites, you can get your product in front of travelers without spending a fortune.

They Offer Seamless Booking And Secure Online Payments

Travelers love them for their ease of use. They're mobile-friendly and offer fast and secure payment processing.

Travelers Can Read Reviews About The Tours

Reviews play an important part in the purchase decision. Because these sites often double up as review platforms, it’s a convenient way for travelers to see what other people have said about a particular tour or activity they are interested in.

The Downfalls Of Relying On OTA vs Direct Booking Channels In The Current Market

Despite the advantages of Online Travel Agencies, there are some downfalls of relying on them too heavily, especially in the current market brought on by the pandemic.

Commission Fees Is Income That Your Business Could Be Banking

Commissions vary from platform to platform, but you’re generally looking at anything between 15-40%.

Coming out of the pandemic, that’s money that matters. It’s money that you could be putting into your own bank account to support your business.

They’re Not Actively Promoting Your Business

OTAs have their own listing ranking algorithms. You have no control over where your listing appears within results, and the platforms don't do anything to promote your business. Listing on them won't elevate your brand; this task remains in your hands.

Putting Up Your Prices Could Result In Less Interest In Your Product

Many travelers are conscious of how much they’re spending at the moment. Raising your prices to take enough home may result in you over-pricing for your market on the platforms.

Finding The Right Balance With Direct Bookings

It may seem like a tall order to direct bookings away from Online Travel Agencies, especially if you’ve been reliant on them in the past. However, there are steps you can take find a better balance and encourage clients to seek you out directly.

There are two main areas to focus on to get a direct booking, namely to:

• Drive traffic to your website or booking page
• Offer a seamless booking experience

Here are some ideas to optimize these.

Brand Your OTA Listing

While some platforms will list you as the organizer for your tour or activity, it’s often not very prominently displayed on your listing.

Others forgo it altogether and only provide the operator name once a booking has been made.

You can get around this though in several ways. You could:

• Display photos on your listing that show your branded vehicle in the picture
• Display photos where your tour guides are wearing branded clothes
• Ask your clients to leave reviews and mention your company name

Doing this will help people who are browsing to identify who’s leading the experience. From there, you can bet that they will visit your website to see how the pricing compares.

Offer The Best Prices On Your Website/Direct Booking Page

You can attract price-sensitive travelers from the OTA platforms by displaying your most competitive pricing on your website. If you can reward clients by offering them the best price here they’re more likely to go direct.

Target Near Me Searches and Local SEO On Your Website

Think with Google insights mentions the rise of ‘Near me’ searches and how they signal strong purchase intent.

To tap your activity or tour into this potential, do local keyword research, and then optimize your website and booking pages to target travelers accordingly.

Note that you will need to set up and optimize a Google My Business listing (GMB) for your tour operator business in order to feature.

Collect Google Reviews

With a GMB listing in place, you will appear on Maps, the right sidebar Knowledge Graph, and across Google’s suite of services.

Reviews are an important part of featuring on this suite too. Collecting reviews helps you rank your business higher on the SERPS, as well as to reassure travelers of your ability to lead a great tour.

Get Granular With Advertising

Depending on what the current situation is in your area, it may be too early to start advertising. But, when the time is right, it is possible to get your results above the fold.

Even though the OTAs have a massive advertising budget, they’re not doing a deep dive into every market. This leaves the opportunity open for you to do bid on the long-tail/more specific keywords related to your tours that travelers are searching for.

Invest In An Online Booking System

If you’re to compete with OTAs, you need to offer an equally seamless payment and booking process. Sign up with WeTravel, and you can offer optimized booking pages and easy online payments that put travelers at ease.

Final Thoughts

While a move to get more direct bookings than from the OTAs isn’t likely to produce instant results, putting these practices into place can help you get the best of both worlds in the long run.