Giving OTAs the Boot

[thunder3]

When we purchased our inn, we inherited the OTA contracts (boo king and Exped) as we didn't want to change anything off the bat. We are now realizing that we really don't need them and they are costing us revenue and causing us (and our guests) too many headaches. X is now taking 18% plus another 10% for member discounts! We're done with them. We have a great website, use ResNexus for reservations, and will start doing our own marketing campaigns on Google/Facebook.

Has anyone dumped their OTAs and what were the repercussions? I'm a little hesitant as we have quite a few bookings with them through next fall.

 

[JimBoone]

Has anyone dumped their OTAs and what were the repercussions? I'm a little hesitant as we have quite a few bookings with them through next fall.

Can't exactly answer, just my two cents worth. I never used OTA's, started business before they were popular and later didn't want the headaches. I find it better to pass on some of that savings to our guests and build a group of friends that return.

Have a business listing on TA, have not advertised on Google or Facebook although post and spend time [too much?] on Facebook. I enjoy Facebook and keep up with many of our guests both on business page and as friends on my personal page.

Forum member Generic lists some but not all rooms using the idea of using the OTA rather than being used by the OTA. I'm sure others will have better comments than mine.

 

[TheBeachHouse]

When we started, we were 75% ota bookings. We are now, 75% direct (10 year). We got the place from a woman who did most of her business from overflow from other inns. We upgraded and raised prices so we lost what regulars she did have, so we build from nearly nothing. The otas filled our beds! Now we do it ourselves.

We don’t pay for any premium service. Just the commission. We bump the room rate by the commission price. No loss to us.

 

[GoodScout]

We've been using OTAs since purchasing 10 years ago. Many here will tell you to dump them, but I'm different. Our philosophy has been very simple, and when I speak at seminars I encourage every innkeeper adopt them:

• OTAs can be a marketing tool. Clearly, there are prospects who missed your website but fell for all the ads that Bo and X put out there. Use those companies' marketing dollars to get you new direct customers.
• Use OTAs only to attract new customers. Once you get them, convert them during their stay to become direct bookers by showing them the savings, extras, and benefits of booking direct.
• Give benefits to direct bookers and charge extra for OTA guests. Our direct customers get a free day pass to our spa during their stay. OTAs must pay $29 a day. Turn price shoppers into shoppers who understand value. Some give direct-bookers a bottle of wine or other little things.
• By contract, you're supposed to charge OTAs the same as your lowest available rate. I would NEVER EVER ;-) encourage you to adjust your settings in Think, Res, ResKey or other programs to add an extra 18% to cover your costs.
• Block dates that are high-demand to your OTAs. There is no reason to pay 18% commission for rooms you're going to sell out anyway.
• Put your cheaper and less desirable rooms on the OTAs. Save your best rooms for your best guests.
• Always get your customer's email, phone and other contact information at check-in. You're going to want to be able to market directly to them through e-newsletters to keep them booking direct. There's a reason the OTAs are loathe to share that info with you - it's the most valuable thing! Also, make sure to get a valid CC if its an Expedia direct customer. If they damage something or have additional charges, you won't be able to charge Expedia's virtual card for it.
• Never let OTAs account for more than 10% of your bookings. Ouyr target is 5%. If you're giving more than 10% of your business away with commissions, you need to work very hard to convert everyone to direct bookings.
• Don't sign up for discount programs for Genius members, etc. It just continues to erode your rate. And ignore recommendations from Boo & X on how you can "increase your bookings from" their site. You don't want that, and their way is always giving away money by lowering your rates again.
• Require 100% deposit from Bo and 50% (their max) deposits from X guests. Credit card scammers use the sites to check to see if the numbers they've stolen work. If you don't ask for deposits upfront, you'll end up with a no-show and a bad CC number you can't charge for the stay. When the deposit charge is declined, delete the reservation as quickly as you can (unfortunately, you usually have to wait 24 hours).
• Do the math on what it costs to get a new customer. Think about what you're spending for Google ads, TripAdvisor, listing sites, etc. Then think in terms of what you'd pay to get a new, loyal customer. My average rate is $200. Would I pay $36 to get a new customer I can thrill, impress, and then convert to being a loyal visitor who might stay here every year or even more often? Heck yes!

 

[CSMaine]

When we purchased our in, we inherited the OTA contracts (boo king and Exped) as we didn't want to change anything off the bat. We are now realizing that we really don't need them and they are costing us revenue and causing us (and our guests) too many headaches. X is now taking 18% plus another 10% for member discounts! We're done with them. We have a great website, use ResNexus for reservations, and will start doing our own marketing campaigns on Google/Facebook.

Has anyone dumped their OTAs and what were the repercussions? I'm a little hesitant as we have quite a few bookings with them through next fall.

All the best on your new endeavor! My wordy two cents or so, which I hope helps. - If you decide to stay with an OTA (you probably don't need both) be sure to change the settings on their admin site to not be part of any discounts (member or promotions). - Regularly check the rates on their site. Even without being part of promotion, etc. we found they were way under our rates in their words "to be competitive in our market". It has happened a half dozen times and we contact them to get it corrected, after much effort BTW. - We look at the OTA as a "marketing expense" per se, but needs to be managed. Even with this, we too at times think we should drop the OTA as it does cause more issues than anyone booking directly. - Take advantage of setting up Google Hotels in ResNexus. It's free via Google and ResNexus does not charge a commission on these bookings. I was surprised how many res. came through this in the first year. - Non OTA related, set up Google Analytics to gain some insight on who is coming to your website, referrals, and location. It's free too. We found a few local businesses and events linking to us that we didn't know were out there. Plus it helps tell us if our marketing / donations, etc. are getting attention.

 

[HmBrdIn]

When we started, we were 75% ota bookings. We are now, 75% direct (10 year). We got the place from a woman who did most of her business from overflow from other inns. We upgraded and raised prices so we lost what regulars she did have, so we build from nearly nothing. The otas filled our beds! Now we do it ourselves.

We don’t pay for any premium service. Just the commission. We bump the room rate by the commission price. No loss to us.

Same here. The customer ends up paying for the commission or any other OTA fees by posting increased rates on those sites. If they call us directly or go to our website, they get the lower rate.

 

[Arks]

I used VRBO and Booking for a while, but didn't care for how they wanted total control of everything. With Booking you couldn't even edit your room descriptions. You had to email them and they made the changes they wanted to make. So I dropped them and am glad I did. (But maybe I'm too independent for my own good!)

I do use Air, and about 10% of my bookings come via Air. It's a nice small side-source of bookings with very few drawbacks. Guests who book via Air pay more than they'd pay if they booked through my website, but some folks only search Air and if they want to pay more, that's not my business.

The other 90% of my bookings come from my website, the way I like it!

 

[gillumhouse]

I have never used the OTAs. I opened before Internet became popular (but I had a website before I even had a computer), FB, OTAs - the days of guide Books. I am still in business. I am not in a tourist mecca so I not a revolving door of guests. I do not use the OTAs because no one is going to tell me how to operate MY business. I have to live somewhere so I live in this neat old house that brings enough guests to pay the expenses of the house and a bit extra. I live for free.

What it boils down to is this - do you want to be full EVERY night (which I call work myself to death) and make LOTS of money because you are too busy to spend it? Or do you want to have a life and a business. If the former - use the OTAs. And BTW - no one said you had to kick them to the curb cold turkey - give them fewer rooms gradually and see if you REALLY need them.
I am happy muddling along (just back tonight from a Municipal League Conference with my City - blocked all reservations Sunday thru tonight) and being involved in my City. I do NOT have a pension big enough to do more than pay the light bill - actually get more from the City in a year than my pension - but I AM enjoying life.

 

[GoodScout]

I should have mentioned, we used VRBO for a while, but found the 3-4 bookings a year (always queries during busy holiday weekends when we didn't need them) weren't worth the headache of keeping prices and availability up to date.
As for Air, we're on it, but I have derived not a small amount of glee from the fact that as my Air bookings have plummeted, so have those for all the amateur innkeepers in my area. The #AirBnBust is for real.

 

[Generic]

I use OTAs to fill rooms, but it's strictly on my terms. I love when they send me a message saying... we don't have enough rooms. Of course you don't, I've filled them without you!

I pay the parity game the way they play the parity game. My terms with the OTAs are 100% non-refundable. I offer guests much more liberal cancellation policies. I also don't give the OTAs anything except spots to fill in the high season. I have a spot of 3 days... Well, it's a 3 day minimum on the OTA. It's fill or die. In fact, I think past April 15th at the moment, it's just holes. Someone booked and I'm left with a Thursday, Friday and Saturday... open it up for the OTAs. 2 days after a weekend... open it up for the OTAs. Less then 3 weeks and still have an opening... OTA. Cancellation for a big weekend, put the price sky high and put it on the OTAs.

They also serve as advertising. Many people have found me there and then come back and book direct. This is mainly during the off season. I still get most of my business direct. But I let them fill in spots because they have a giant audience. But if your dream is to stay here, you better book direct, because finding that hole is going to be difficult via the OTAs.

BTW, you can turn off the extra discount thing. I have. And during the doldrums of winter, I have put in specials that only work if you are here during the week... don't even THINK of getting a discount on a weekend.

 

[JimBoone]

What it boils down to is this - do you want to be full EVERY night (which I call work myself to death) and make LOTS of money because you are too busy to spend it? Or do you want to have a life and a business.

Agree 100%, perhaps is someone is looking to sell the high occupancy numbers help impress but don't always increase the bottom line. After a point, more guests mean more work, mine or hired and more expense including the long-term expense from wear and tear. Mindset maybe, I'm happy at what I do and have no desire to retire to something else, don't seem to feel the burnout that others seem to feel at times.

 

[thunder3]

I use OTAs to fill rooms, but it's strictly on my terms. I love when they send me a message saying... we don't have enough rooms. Of course you don't, I've filled them without you!

I pay the parity game the way they play the parity game. My terms with the OTAs are 100% non-refundable. I offer guests much more liberal cancellation policies. I also don't give the OTAs anything except spots to fill in the high season. I have a spot of 3 days... Well, it's a 3 day minimum on the OTA. It's fill or die. In fact, I think past April 15th at the moment, it's just holes. Someone booked and I'm left with a Thursday, Friday and Saturday... open it up for the OTAs. 2 days after a weekend... open it up for the OTAs. Less then 3 weeks and still have an opening... OTA. Cancellation for a big weekend, put the price sky high and put it on the OTAs.

They also serve as advertising. Many people have found me there and then come back and book direct. This is mainly during the off season. I still get most of my business direct. But I let them fill in spots because they have a giant audience. But if your dream is to stay here, you better book direct, because finding that hole is going to be difficult via the OTAs.

BTW, you can turn off the extra discount thing. I have. And during the doldrums of winter, I have put in specials that only work if you are here during the week... don't even THINK of getting a discount on a weekend.

On X, you cannot remove the extra member discount. I called them on it and they said "oh, that is part of the contract you signed". They offered to add a 3 day minimum but their partner sites still have 2.

 

[GoodScout]

On X, you cannot remove the extra member discount. I called them on it and they said "oh, that is part of the contract you signed". They offered to add a 3 day minimum but their partner sites still have 2.

Generic, can you walk us through how you turned it off?

 

[Generic]

Generic, can you walk us through how you turned it off?

It's in the rate plans, called Package, you can deactivate.

You can also make it very difficult to use.... like you have to book 14 days in advance and no more than 30 days in advance and have to book for at least 3/4 days. Even if it's offered, it doesn't have to be easy to use

 

[thunder3]

I used VRBO and Booking for a while, but didn't care for how they wanted total control of everything. With Booking you couldn't even edit your room descriptions. You had to email them and they made the changes they wanted to make. So I dropped them and am glad I did. (But maybe I'm too independent for my own good!)

I do use Air, and about 10% of my bookings come via Air. It's a nice small side-source of bookings with very few drawbacks. Guests who book via Air pay more than they'd pay if they booked through my website, but some folks only search Air and if they want to pay more, that's not my business.

The other 90% of my bookings come from my website, the way I like it!

What happened when you dropped Booking? Did you have any future reservations through them?

 

[CSMaine]

What happened when you dropped Booking? Did you have any future reservations through them?

Just wondering as the new owners if you have to honor the OTA reservations if you decide not to use them. The agreement would have been with the previous owner(s).

 

[thunder3]

I have never used the OTAs. I opened before Internet became popular (but I had a website before I even had a computer), FB, OTAs - the days of guide Books. I am still in business. I am not in a tourist mecca so I not a revolving door of guests. I do not use the OTAs because no one is going to tell me how to operate MY business. I have to live somewhere so I live in this neat old house that brings enough guests to pay the expenses of the house and a bit extra. I live for free.

What it boils down to is this - do you want to be full EVERY night (which I call work myself to death) and make LOTS of money because you are too busy to spend it? Or do you want to have a life and a business. If the former - use the OTAs. And BTW - no one said you had to kick them to the curb cold turkey - give them fewer rooms gradually and see if you REALLY need them.
I am happy muddling along (just back tonight from a Municipal League Conference with my City - blocked all reservations Sunday thru tonight) and being involved in my City. I do NOT have a pension big enough to do more than pay the light bill - actually get more from the City in a year than my pension - but I AM enjoying life.

Just wondering as the new owners if you have to honor the OTA reservations if you decide not to use them. The agreement would have been with the previous owner(s).

We wanted to keep things running as they were for a smooth transition. Getting the contracts converted to new ownership was a royal PITA. In hindsight, wish we hadn’t.

 

[Arks]

What happened when you dropped Booking? Did you have any future reservations through them?

No, nothing was on the books for the future from them. I got VERY few bookings through them, and when I got one it was about more trouble than it was worth. I didn't enjoy working with them.