A new survey has revealed that independent accommodation businesses want stricter rules on OTA commission levels as they struggle to increase their own online bookings.
(TRAVPR.COM) UK - February 20th, 2014 - This comes in the wake of the Office of Fair Trading investigation rulings on new membership schemes that will make it even harder for independent hotels, b&bs and guest houses to win the price war. The OFT felt that the strict rate parity contracts imposed by OTA’s were not an issue in regards to competitiveness within the sector.
The majority of the 288 survey respondents are spending between 1-5% of their annual turnover on marketing activity but 87% said that the marketing budgets of large hospitality brands and OTA’s are making it increasingly harder for independents to compete for online sales. Surveyed by umi Digital, 61% of those that took part said that using online travel agencies is a necessity and 87% also stated that they believed OTA and third party commission levels should be capped.
Independent accommodation businesses have been hit hard recently with Google algorithm updates, increasing OTA commission levels and ever increasing utility and staffing costs. Just last week online travel agency Laterooms announced a price increase from 15% to 17%; a real terms increase of almost 12%. In the survey respondents also named them as the worst OTA for the generation of bookings. It does question how Laterooms can justify their price rise but with nothing in place to stop them, accommodation owners are simply expected to pay it or take their business elsewhere. The survey results showed Expedia as the agency with the highest commission level and Booking.com as the agency with the lowest.
Steve Lowy, owner of umi Digital, said “Looking at the statistics from our survey, hoteliers realise that OTA’s are a necessary evil, but it is essential that the independents empower themselves to increase their direct bookings. I think the OFT judgement leaves a bitter taste in the mouth as it has been done without in-depth knowledge of the hotel industry and the issues that are affecting the majority of owners. I guess what is needed now, is for all independents to pick up the tools available and fight back. By offering amazing service within their product package and trying hard to capture guests who ultimately want to book direct in the future, the OTA’s can be bypassed and independent accommodation providers will save on those crazy commissions.”
Notes to editors:
• The Online Travel Agencies - Friend or Foe? online survey was conducted by umi Digital between 24th January and 5th February 2014. 288 invited independent accommodation owners participated.
• Umi Digital offers digital products and services to the hospitality and travel industry. Whether it be branding or web design services, or our own proven software products, umi Digital makes it simple to operate effectively in the online space for independent business in these sectors. www.umidigital.co.uk
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