OTA’s revenue management suggestions may be a pitfall for hotels，The following is the translation:

I read some news articles this month about online distribution in the hospitality industry，Some of the comments make me a little overwhelmed。One of the industry experts I respect suggested that hotel owners should listen more to OTAs when it comes to revenue management。Of course，I also tried hard to understand his true intention of saying this，Because I know very well that this kind of expression will lead hotel owners into a pit。

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I like OTA，They provide a great distribution platform and service，They help you run your business better。Each hotel needs to decide whether to use OTA for distribution based on its own strategic requirements。

Okay，Now let me talk about OTA’s provision of revenue management advice，Some of my own thoughts。

Qualification requirements for an OTA marketing manager (or customer representative)

When I mentioned this, my mind was full of questions, such as:

● What experience or qualifications does an OTA marketing manager need to have to provide you with revenue management advice？

● Does he/she have solid hotel industry revenue management experience？

188bet app ● How long have they been in the industry?

● Do they objectively understand “your” hotel’s needs？

● Do they know how their “suggestions” will impact your hotel，Impact on market and customer segmentation，Impact on distribution costs，etc.？

(Disclaimer: Of course，There must be exceptions to my general description)

You can obtain past market demand information from the marketing manager according to your own needs，Or information about market demand forecast in the next few months。Go further，If your business situation is not so ideal，Or want to get a better ranking，They can also help you make some adjustments，Let your ranking rise slightly。

OTA’s business goals

First，We must clearly understand what the business goals of OTA are，And consider and filter their suggestions in this scenario。

This is simple: OTAs are chasing growth rate and market share。They are targeting growth in bookings，And growth in room nights sold and commissions in each market。They just want your hotel to be booked more with them than with other competitors。This is my opinion，Might make them look a little annoying，But they are not qualified to give me advice on how to run my own business。

In my experience，Many OTA marketing managers have not thought carefully about how to do a good job in their hotel distribution business，They also seldom listen to the advice given by OTA’s management team to achieve their business goals。

An example from my point of view

A long time ago，I have a hotel here，Not very good。So we launched a revenue management system, Xotels, to change this situation。

We analyzed the booking patterns of hotel users，Made user segmentation，Analyze market performance、Competitive pricing strategy，Ranking position in OTA search results and its overall performance。At that time，The biggest 188bet online sports betting market challenge facing hotels is the sharp drop in demand，Hotel room supply exceeds demand，Construction of the new hotel continues。This is certainly not an ideal business environment......

So we developed a more competitive strategy，Only a little smarter than the opponents。Always，We noticed that everyone was just looking very carefully at everyone else's BAR indicator。Competitors will notice our price adjustments immediately，And make corresponding adjustments immediately。This way，Everyone will gradually fall into a vicious cycle of price war，This is definitely not the result expected by hotel owners who want to run a good business。

So，We decided to try something a little smarter than the competition，Market strategy similar to guerrilla warfare，Then I am very looking forward to the good results of these strategies。

We discovered through observation，All hotel’s lowest room rates come with a “no refund” restriction。And，I guess all hotel owners are exhausted after launching their products on OTA，I didn’t even think about checking the usage restrictions of competitors。So we decided to put products with flexible usage conditions at the same price level (cancellation and refund more than 24 hours before check-in) and competitors' "cancellation without refund" products on OTA for an experiment。

For us，Increase occupancy rate through this method，And it is reasonable to gain a competitive advantage over opponents，And it’s simple and feasible。We basically make changes at night，No one will notice。

As expected，The call from the OTA marketing manager came the next day after the modification，He told us this strategy would backfire，Our ranking will drop，Demand will be diverted。He explained，Because we announced flexible usage conditions，As a result, we will receive more 188bet online sports betting cancellation requests，Then their ranking algorithm will automatically penalize and adjust the ranking downward。

But I insisted on my idea，Ignore him (thanks to my mom for passing on the “stubborn gene” to me)。Then the OTA customer representative reported this situation to the hotel’s general manager，Of course the general manager is very nervous，Concerned about the risks described by the customer representative。We withstood the pressure，Persist in completing this experiment，Although there were some unpleasant arguments，We still held on......

Not bad，We saw results within a week。Restrictions relative to "cancellation without refund"，Our flexible usage conditions are certainly more attractive to consumers。OTA’s algorithm discovered this situation，And start improving our ranking。Within a week or two，Our ranking in OTA search results rose from the third page to the middle of the first page (without increasing the commission to the OTA)。And more importantly，The hotel’s occupancy rate also increased。

Within one year，This hotel’s RGI (Competitive Revenue Score) rose from 13th to 2nd，And if according to REVPAR (revenue per available room)，Similar airline seat-kilometer revenue RSK) ranking，We are the first in the market。

Other risks

There are other risks to consider when working with OTAs，For example, the repeated use of multiple promotion rules。

For example，You designed a "stay 4 nights, pay 3 nights" campaign to attract tourists to stay longer，At the same time, in order to boost cash flow, we designed an early payment discount promotion。There is also an “early booking discount” activity to attract travelers to book in advance。All of these promotions are part of your hotel’s business strategy，Cannot be used simultaneously。But be very, very careful when putting these discount 188bet app download strategies on OTA，Because it will help you combine。An early reservation for a 4 night stay，And the final price for travelers who paid at that time may be much lower than you expected。

We can write this scenario down for a clearer analysis: assuming the lowest house price is 100，Long stay discount = stay 4 nights, pay 3 nights，Early booking discount = 10%，Pay now discount = 10%；

Then OTA stacks these offers，After using all these offers, travelers only pay 60.75。Some OTAs also have discounts (such as 10% off)，The final price is 54.66，This is much lower than the minimum price of 100 you set。So make sure your preferential policies are set correctly，And check often。I also suggest，Don’t do too many at the same time、Too complicated preferential policy，And make sure they cannot be used together。Doing this can effectively ensure that the room price is discounted according to your rules。

To summarize

All those provided by OTA come out in one mold，One-size-fits-all revenue management methods are not my cup of tea，You know。You need to carefully analyze the market you are facing，Then treat OTA as a tool，Achieve your business goals。Not only make your products and services different，Also make your marketing strategy different，Only in this way can we be competitive。

Hotel owners should set and stick to their own marketing strategies!

Note: The views in this article do not represent those of the translator.

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