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Welcome to the weekly AST Briefing.

Choosing between Online Travel Agents (OTAs) and direct bookings isn’t about picking sides. It’s about maximizing every opportunity. 

Chris Legaspi, Chief Commercial Officer of Archipelago International, suggests, “There aren’t bad OTAs, just different perspectives,” emphasizing the importance of a multi-channel marketing and sales approach to reach the widest audience and boost revenue. 

So, should hotels embrace OTAs or go their own way? The answer may not be as clear-cut as you think.

For this week’s Feature Story, we highlight the possible advantages and risks of working with OTAs and what factors sustainability-led businesses should consider related to prioritizing direct booking or third-party OTAs. 

Should Hotels Collaborate with OTAs or Move Away from Them?

As digital intermediaries, Online Travel Agencies (OTAs) have revolutionized how travelers book accommodations and other travel services, providing convenience and a wide range of choices.

The global market size for OTAs in 2023 was substantial, with various sources providing slightly different figures. However, the overall trend shows significant growth and a strong market presence.

• Booking Holdings led with $21.4 billion in revenue in 2023, as Statista reported online sales channels driving 70% of total travel revenue. The global revenue for this market surpassed 850 billion U.S. dollars, covering hotels, package holidays, vacation rentals, and cruises.

• IMARC pegged the market at $512.5 billion in 2023, with projections to hit $1.27 trillion by 2032.

• GlobalData valued it at $764.69 million in 2023.

Asia mirrors this trend, with platforms like HappyEasyGo rapidly expanding, according to Skift.

Despite boosting hotel bookings, OTAs challenge businesses with high commissions and limited pricing control, pushing the need for sustainable travel solutions.

Benefits of Partnering with OTAs

OTAs can supercharge your hotel’s market presence. Legaspi outlines the key benefits as follows:

1. Boosted Visibility: OTAs connect your hotel with their vast, global audience, especially targeting international travelers unfamiliar with your brand.

2. Cost-Effective Tech & Marketing: Access cutting-edge tech and data-driven insights without the hefty price tag, enabling smarter, more strategic decisions.

3. Increased Trust: OTA reviews and ratings build consumer confidence, fostering transparency and trust in your brand.

The Downsides of OTAs

Partnering with OTAs comes with challenges for hotels:

1. Steep Commissions: OTA fees can eat into profits, with added costs for upsells, cancellations, and premium placements.

2. Limited Customer Data Access: OTAs often withhold customer data, making it hard for hotels to build direct relationships.

3. Brand Dilution: Hotels risk their unique brand getting lost among countless listings on OTA sites.

4. Risky Reviews: Booking through OTAs can lead to negative reviews for issues beyond the hotel’s control.

5. Environmental Concerns: OTAs get blamed for contributing to overtourism and environmental harm.

How Can Hotels Address These Issues?

Boost Direct Booking

Many hotels prioritize enhancing direct bookings through their websites, offering loyalty programs and incentives to motivate customers to book directly. 

Strategies to attract more guests to book directly:

• Optimize the hotel's website for search engines.

• Leverage social media marketing and content marketing.

• Use email marketing.

• Develop loyalty programs.

• Create personalized offers.

• Utilize metasearch engines.

• Implement advanced technology solutions.

• Promote sustainable practices.

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Collaborate with sustainability-led OTAs:

Some OTA platforms are emerging with a focus on sustainability, providing an alternative for both hotels and eco-conscious travelers who are committed to minimizing their environmental impact.

Partnering with sustainability-led OTAs boosts your branding by attracting eco-conscious travelers willing to pay more for green options—74% sought sustainable travel choices in 2023 according to Booking.com.

It also connects you with a niche market of environmentally aware guests who prioritize eco-friendly stays. Embracing sustainability fosters long-term profitability through repeat business, positive reviews, and lasting customer loyalty.

Examples of Sustainability-led OTAs

Green Pearls curates a selection of environmentally responsible accommodations and travel experiences. It emphasizes transparency in sustainability practices, providing detailed information about each property's eco-friendly initiatives.

Ecobnb connects travelers with eco-friendly accommodations that adhere to strict environmental criteria, such as renewable energy use and organic food offerings.

If you happen to be in Phuket on September 2nd, you’re invited to join us at AST Forum Phuket at Angsana Laguna Phuket. Or if you know anyone, who will be in the area, please pass the info forward.

Everyone is welcome to join, whether you are a food supplier, hotel manager, climate scientist, or travel advisor.

Registration is free. But spaces are limited, so reserve your spot now!

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