- What is OTA?
The abbreviation OTA comes from the term “online travel agency” and behind it “hide” online travel agencies such as Booking.com, Orbitz, Expedia and Travelocity. They are popular for selling or reselling plane tickets, hotel rooms and car rentals. In recent years, however, for years, tourists have paid MORE attention to the EXPERIENCES they would like to experience than to the places and hotels where they would like to spend the night. Experiences often turn out to be the first reason for a tourist to want to visit a specific place.
That is why online travel agents are gaining more and more popularity, offering offers for the second main part of the wishes of tourists – the opportunity to book tours, entertainment and attractions easily and conveniently. World-renowned OTAs that develop and offer such services are TripAdvisor Experiences (including Viator), Expedia Local Expert, GetYourGuide, Musement, Klook and Tiqets. Airbnb also works with major tour operators, offering many experiences in the Airbnb Experience.
However, some of the OTAs specialize in specific markets such as Ctrip in China, Veltra and Voyagin in Japan, Civitatis in Spain. The advantage of local OTAs is that they know the traditions and culture of a place in detail and can offer you truly authentic experiences that you will not find elsewhere.
- Why should you care?
Online travel agencies (OTAs) are the fastest growing channel for selling tours, entertainment and attractions, according to a Phocuswright study. For better or worse, they will determine the future of the market, as they will make up a huge part of it. And it’s good to be prepared. Why? Because they meet (almost completely) consumer desires.
In 2018, 67% of frequent travelers prefer to spend more on activities in the chosen destination (tours, attractions, experiences) than on hotels and accommodation. 75% of the surveyed tourists have taken part in organized tours and activities at least once during their trip, and 54% have participated in at least one extreme experience. According to a Facebook IQ survey, 51% of American travelers who decide to travel to a place are adamant that they will spend less than a week searching for detailed information and organizing their trip. Google data shows that within 3 months before the departure date, the demand for experiences increases dramatically – 3 times more than the demand for hotels and 8 times more than the demand for offers for airline tickets. And this is where OTAs come in – to provide a huge range of breathtaking experiences that can be purchased quickly and seamlessly ONLINE.
- How do these OTAs work?
All OTAs have an official registration process, and for some it is entirely online. In others, it is a multi-stage process in which you initially ‘submit’ an application and wait for approval. This leads to a kind of contract-agreement between you and the specific online travel agency, which regulates commissions, payments and additional conditions for cooperation.
OTAs can charge heavy commissions (20% * and above your retail price), but they can also bring you loads of benefits. Finding a balance in business relationships is something that you and they should strive for.
* The average commission for the world-famous OTA varies between 20-25% of the retail price. If your tour or ticket price is $ 100 / BGN, expect $ 80 / BGN. net income.
Fortunately, local OTAs are more likely to renegotiate initial terms, offer lower commissions, and are more positive about changing plans (both yours and their own). Local OTAs are a good and loyal ally, as they are aware that your success is their success. They value the opinion of all tour operators (whether small or large), know the ‘cost’ of a strong partnership and are willing to make concessions when they are sure they will get the same in return.
- What to expect?
More and more providers / providers of tours, activities and shared experiences are turning their attention to the functionalities and innovative tools of OTAs. 3 out of 10 companies believe that the change is positive and would benefit from the trend. The course of change envisages a ‘restructuring’ of the traditional model, as active consumers increasingly want to find EVERYTHING in one or two places in the ONLINE space from which to make quick and secure purchases.
Плюсове | Минуси | Неизбежното |
OTA-та могат да ви донесат доста резервации, тъй като маркетинг стратегиите им достигат до огромен брой туристи и пътешественици Могат да ви помогнат да привлечете туристи от различни краища на света, до които бихте достигнали трудно Плащате единствено за резервациите, които се осъществяват Някои OTA предоставят цялостно управление или частична поддръжка (+/- превод) на вашето съдържание Повечето OTA действат като MOR (merchant of record), което означава, че тяхната комисиона включва обработка на плащанията и обмяна на валута (ако резервацията е международна)
| Комисионите започват от около 15% и могат да нараснат значително. Колкото повече нараства влиянието на конкретната онлайн туристическа агенция, толкова повече нарастват и комисионите OTA-та до известна степен ограничават бранд идентичността. Те популяризират ВАШИЯ ПРОДУКТ, но не и вашата марка
| Пазарният дял на ОТА-та и влиянието им оттук нататък ще вървят единствено и само нагоре (при някои те ще покачат стремглаво за максимално кратко време) Всяка OTА представлява конкурентен пазар, така че ще трябва да се постараете да създадете възможно най-впечатляващите послания по същия начин, по който се опитвате да заемете първите места в Google и разни други платформи Всичко ще става все по-автоматизирано, което означава, че ще ви коства все по-малко усилия |
- What you need to know before becoming a partner of an online travel agency (OTA)?
OTA will usually offer you a large arsenal of services – marketing, support, customer service, payment processing and more. You do NOT have to pay extra for this ‘package of extras’. However, there are also OTAs that offer additional marketing opportunities (more prominent placements of your offers) for higher commissions.
Although not all terms can be negotiated, this does not mean that you cannot try or look for an OTA option that offers more flexibility in negotiating terms. If you state your demands openly and agree clearly enough, compromises are not ruled out. Local OTAs are extremely supportive of their partners’ business strategies and will be interested to hear your requests.
- What to do - Do’s and Don’ts
More products – more chance to stand out
The more services / products you offer through OTA, the greater the chance to ‘move’ in the field of view of active users. Modern tourists are looking for EVERYTHING more and are looking for it and want it at the moment. When you add 10 instead of 2 of your services, your chances of being ‘noticed’ increase fivefold.
Let your offers stand out
Your tours are certainly unique. Make sure consumers think so too. Carefully research similar offers offered by online travel agency to make sure you are familiar with the key elements of sales and that you know how to differentiate your product from that of the competition. Submit your offers to OTA with an attractive description, attractive messages and ‘exciting’ photo or video material that would grab the attention of any user. “The devil is in the details,” and consumers are used to noticing the smallest ones.
When you decide to launch promotional discounts or some kind of discount, always notify OTA so that your offers can be updated in time. Offers with old information, inadequate description and inaccurate prices will not be taken seriously by anyone!
Be as flexible as possible at the last minute reservations
More and more users are making online reservations through their phones at the last minute. Why? Because they don’t have time for preliminary plans, they change their preferences at the speed of light and they don’t want to think in the long run. According to a study by Arival, 3 out of 4 tourists plan to book a tour or activity only when they reach the cherished destination. Operators that can support the so-called. ‘Same-day’ or ‘day-before’ bookings are more attractive to any OTA and can afford to be more independent of them.
If your chosen OTA offers a real-time reservation management system, use it at all costs. This way you will not only have a real idea of the reservations made, the number of paid ones and the number of views of your offers, but you will have the opportunity to offer something extremely valuable for the end customer – reservation and purchase in real time.
If OTAs offer mobile POS, which allows ticket sales on the spot, take advantage of it as well. This will give you another opportunity to manage your reservations in real time.
Let OTA help you
If they want to rewrite your offers, let them do so. There is usually a reason to do so. Each online travel agency works with a large number of copywriters and marketing experts who will try to present your offer in the best possible light. In 9 out of 10 cases, these people are real magicians! But remember – as you rely on them, so they rely on you! When asked for suitable photos, videos or additional information, give them everything they need. Both your performance and the quality of your offers depend on this.
Take advantage of as many sales channels as possible
Offering a product in more than one place is certainly a winning strategy. In today’s sea of information, it is important to do everything necessary for your brand and your products to be as visible as possible. Look for a partner in the face of OTA, which allows the incorporation of the so-called. iframe of your online channel – namely the ability to run an online store on your own site. Using such a solution, owned by the partner OTA, will allow you to manage your offers from one place and at the same time position them on several online platforms. If OTAs also offer the so-called channel manager, do not hesitate to take advantage of this functionality.
- And last but not least…. IS IT WORTH BECOMING A PARTNER WITH OTA?
The growth of online travel agency over the last decade hides both real opportunities and real risks for the tourism industry and the hotel industry. Studies show that the positives and challenges posed by OTAs will, willingly or unwillingly, stand in the way of more and more traditional tour operators around the world. The main advantage that every OTA stands out with is the digital marketing skills and tools it uses to build a strong online presence. The strongest trump card in the hands of any online travel agency is the growing desire of consumers to buy and book everything they need FAST, EASY and CONVENIENT, with just a few clicks on their phones. And once you meet the biggest desires of consumers, then your success is tied in a towel.
Collaborating with OTA can bring a lot of benefits to your business, and if you are resourceful and focused enough – you can minimize the negatives. Partnering with an OTA is like walking on ice – if you know where to step, and even more – how to skate, your winnings are GUARANTEED. If you want to keep up with global trends and most of all – if you want to not “fall” in the eyes of end users living at a fast pace, then the partnership with OTA is a good and NECESSARY move.
At the moment…
The size of the market for additional tourist services is between $ 160- $ 180 billion, and the annual growth is expected to reach at least 9% in each of the next 3 years. The main problem with this type of service, however, is the lack of any online presence of operators – 80% of additional travel services can only be booked offline, and the share of real-time reservations in this segment is only 13%.
Currently, the global landscape in the field of OTA for additional travel services is dominated by companies such as Expedia, TripAdvisor, Viator, Get Your Guide, Musement. Despite lower traffic and more limited supply, local OTAs are also not to be underestimated, mostly because of their more targeted supply and marketing. First of all, we must recognize that all these OTAs are an important marketing partner and a valuable source of reservations, especially in attracting more inaccessible tourists such as international visitors (who, for example, do not speak the language of the exotic country to go to).
OTAs are also true INNOVATORS: pioneers in the ever-complicating and personalized digital marketing, in building global brands and in promoting online travel reservations around the world. They have established a dominant position in many markets and travelers (and always in a hurry) prefer to make a reservation through OTA rather than directly through the system of their chosen hotel. And this trend is beginning to ‘overlap’ in almost every country and on almost every continent.
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