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The Rising Price of Selling a Hotel Room

02 November 2012


I recently attended a show where TRI Hospitality was presenting some of their latest stats. One statistic jumped out of the page, and although it was shocking, I was not surprised in the slightest. What they had discovered was that in the last nine years, London hotels had seen a 49% increase in their ARR (Average Room Rate) but in the same period, OTA (Online Travel Agency) commission had increased 151%. The gasps in the room were not from the hoteliers, who have in recent years noticed how some of the big OTA’s have just been taking over the market.


So what can the independent hotelier do to combat this and increase the likelihood of selling a hotel room directly?

I believe a combination of excellent service and product, whilst concentrating on getting that return customer, will benefit hotels in many ways. By doing what hoteliers are good at, it means that immediately the hotels name, i.e. brand, becomes more powerful online. This is perfect for things like social media, and in turn creates a natural buzz for the hotel’s website. To harness this further, hotels can make sure that they capture data of the happy guests, and create newsletters to encourage customers to book direct the next time, which would have a positive impact on dragging people away from the OTA’s and directly to your website. This combined, with internal advertising showing that it is the best rate available will definitely support your push.

It is also really important that your website be ‘mobile-friendly’, as well as making it easy for the client to book either online or by phone (some people don’t like using their credit cards on computers, even more so with mobiles).

Finally, I would recommend using Google Adwords on your hotel brand name. When you sign up to an OTA you sign the right for them to do PPC (Pay-per-click) campaigns. Your own website will always get a quality score of 10/10 for your brand search terms, and if you have done the above you will generate the buzz for people to search your keyword terms. Not only will this be far cheaper than more generic terms like ‘hotels in London’, but will protect your own website traffic from going to the OTA’s. N.B. it is important to track your conversions through Adwords, which can be done using a simple tracking code that can be installed into your booking engine. For more on Google Adwords, click right here.

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