The Rise of the OTAs
Published
on
May 11, 2021
May 11, 2021
The United States shares the title of being one of the most Covid-affected countries in the world by number of cases reported and deaths. Now the United States is pulling it’s weight by leading the way out of it.
As countries around the globe work towards securing enough vaccine supply for their population, many are still living amid lockdowns, restrictions, and a continuation of where 2020 ended. The United States is in a separate reality. With the U.S. government securing a large volume of vaccines and rolling them out through phases to select groups, the United States is now the leader in not only the amount of vaccines given (India #2) but far and away the leader in fully vaccinated citizens. For many Americans, the light at the end of the tunnel is in view.
With this comes optimism. With optimism comes travel.
Online searches online for hotels remain on the rise as 2021 rolls on in the U.S. March numbers surpassed 2019’s highs during that same period. With vaccinations continuing across the country there should be no reason this slows down as we head into the peak Summer travel season only a few weeks away.
The OTAs see what’s happening like many of us at ground level do. U.S. occupancy is rising. Restrictions are lifting. Booking windows are slowly looking further out. As the OTAs operate on a global scale they look at the world and determine where their best opportunity is coming from. Nearly every region outside of the U.S. remains suppressed to pre-COVID levels of online hotel interest. The OTAs have a machine to keep going no matter the environment they’re in:
Because of this, the OTAs have shifted their focus and marketing dollars on the U.S. market. Since bookings are predominately happening here, their marketing dollars are best used in this market.
Metasearch, specifically Google Hotel Ads, is a key battleground for them to be in. This area of a Google search result page tends to attract online users with a higher chance of converting than many other digital marketing tactics. It’s nearly at the point of purchase so the OTAs want to capture that user at the last possible moment before completing their vacation plans. With the increase in marketing dollars from the OTAs, costs for each click in the metasearch area has begun to rise as the year progresses:
Many hoteliers who participate in the metasearch area will worry that the rising CPCs will make this battleground uninhabitable for worthy returns. Thankfully, CPCs have still not reached pre-COVID levels yet but even back then, Sabre-managed campaigns still captured enough bookings and revenue to justify the cost to participate. That’s one of the reasons metasearch has grown in its importance in nearly every hoteliers marketing plan. Currently, that type of return, on average, is still better than they were pre-COVID.
Should I stay away from metasearch due to the costs?
No. If you’re connected to the OTAs, they will always find a way to be in nearly every search for your hotel. Without the official site listed as an option you’re allowing them to capture your bookings. Make sure you are represented in this space while at the same time make sure you’re being smart about how to operate. You can’t have hope as your business plan. Employ experts like Sabre’s DX team to use real data to make sure you’re being efficient with your marketing dollars and justifying that expense with actual returns to show for it.
When’s the best time to try meta?
Now! Many hoteliers’ audiences online grew significantly in March due to vaccination rates increasing, Spring Break, and short booking windows. If the people looking for your hotel are growing…go get them! If you ever watch the stock market and you wish you got in on a stock months ago when it was on the rise – the time to buy is NOW. Many US hotels have that hot stock and they need to jump in now before the Summer travel season takes hold.
As countries around the globe work towards securing enough vaccine supply for their population, many are still living amid lockdowns, restrictions, and a continuation of where 2020 ended. The United States is in a separate reality. With the U.S. government securing a large volume of vaccines and rolling them out through phases to select groups, the United States is now the leader in not only the amount of vaccines given (India #2) but far and away the leader in fully vaccinated citizens. For many Americans, the light at the end of the tunnel is in view.
With this comes optimism. With optimism comes travel.
Online searches online for hotels remain on the rise as 2021 rolls on in the U.S. March numbers surpassed 2019’s highs during that same period. With vaccinations continuing across the country there should be no reason this slows down as we head into the peak Summer travel season only a few weeks away.
The OTAs see what’s happening like many of us at ground level do. U.S. occupancy is rising. Restrictions are lifting. Booking windows are slowly looking further out. As the OTAs operate on a global scale they look at the world and determine where their best opportunity is coming from. Nearly every region outside of the U.S. remains suppressed to pre-COVID levels of online hotel interest. The OTAs have a machine to keep going no matter the environment they’re in:
- Secure a booking
- Collect the commission
- Turn around and spend a good % of that commission on their marketing (e.g., meta) to find more bookings
- Rinse. Repeat.
Because of this, the OTAs have shifted their focus and marketing dollars on the U.S. market. Since bookings are predominately happening here, their marketing dollars are best used in this market.
Metasearch, specifically Google Hotel Ads, is a key battleground for them to be in. This area of a Google search result page tends to attract online users with a higher chance of converting than many other digital marketing tactics. It’s nearly at the point of purchase so the OTAs want to capture that user at the last possible moment before completing their vacation plans. With the increase in marketing dollars from the OTAs, costs for each click in the metasearch area has begun to rise as the year progresses:
Many hoteliers who participate in the metasearch area will worry that the rising CPCs will make this battleground uninhabitable for worthy returns. Thankfully, CPCs have still not reached pre-COVID levels yet but even back then, Sabre-managed campaigns still captured enough bookings and revenue to justify the cost to participate. That’s one of the reasons metasearch has grown in its importance in nearly every hoteliers marketing plan. Currently, that type of return, on average, is still better than they were pre-COVID.
Should I stay away from metasearch due to the costs?
No. If you’re connected to the OTAs, they will always find a way to be in nearly every search for your hotel. Without the official site listed as an option you’re allowing them to capture your bookings. Make sure you are represented in this space while at the same time make sure you’re being smart about how to operate. You can’t have hope as your business plan. Employ experts like Sabre’s DX team to use real data to make sure you’re being efficient with your marketing dollars and justifying that expense with actual returns to show for it.
When’s the best time to try meta?
Now! Many hoteliers’ audiences online grew significantly in March due to vaccination rates increasing, Spring Break, and short booking windows. If the people looking for your hotel are growing…go get them! If you ever watch the stock market and you wish you got in on a stock months ago when it was on the rise – the time to buy is NOW. Many US hotels have that hot stock and they need to jump in now before the Summer travel season takes hold.