How Hotels Can use a Cloud PMS as a Toolkit to Compete with OTAs
Speaking about or even mentioning the dreaded “OTA” word is a bone of contention for many hoteliers. OTAs have and continue to become stronger, larger and more agile – doing everything in their power to muscle their way into a hoteliers back office and gain more control over inventory. And as everyone knows, a hotel’s inventory, and the guest who purchases, is its lifeblood.
It is estimated that the U.S. hotel industry is paying between $4 and 8 billion annually in transaction fees and commissions resulting from OTAs. Forecasts also show that by 2020 the two main players, the Priceline Group and its competitor Expedia will control 94% of all online hotel bookings. With OTAs actively wheeling and dealing to control more of the supply chain and with their ever-expanding networks and their powerful web presence means that they have greater power and leverage to command high commission rates, strict rate parity clauses and leave little room for hotels to negotiate. In short, OTAs are effectively “creating a perverse situation where the business of providing a good or service is significantly less profitable than the business intermediating its sale,” Skift 2016.
While fighting back against the OTAs mean seem like a formidable task, steps can be taken to gain some degree of control – after all hotels still ultimately “own” the guest experience.
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So, what can be done? A hotel’s PMS can play a crucial role in helping to create operational efficiencies and improve the overall guest experience. With a cloud based PMS, its self-service automation capabilities provides a secure channel for direct communication between the hotel and its guests, which offers services and controls like self check-in, change of booking, room service orders bill preview and secure payment, as well as keyless entry and check-out (to name but a few!). Similarly a cloud PMS platform allows hoteliers to collect data from all guests efficiently such as email addresses, even the ones who booked via OTA, meaning hoteliers can market to and communicate with the guest, not only throughout their stay, but after they are long gone. It provides them with an effective method to build on their direct relationship with their guests, encourage them to return and convert them into loyal customers. Madigan Pratt argues (and supports) that hotels that communicate relevant quality marketing martial with their guests see an impressive increase in their direct bookings.
With a cloud PMS hoteliers can also easily identify guest preferences and enhance and personalise their stay experience accordingly; hotels can also leverage “big data” to cater to their loyalty members who book direct by offering them exclusives they could not otherwise purchase via OTAs.
There is no doubt that OTAs can and do form a wedge between you and your guest – and it’s becoming clear that technology that will be a key feature and differentiator in how hotels compete with OTAs. A cloud PMS could become an indispensable tool in an hoteliers armoury, enabling them to better attract, serve and satisfy evolving customer needs – the clear and major advantage is it allows you to re-establish the link between hotelier and guest and provide a more efficient and personalised service.