As the Internet sets to take over the world and online travel reservations soar, it becomes critical in this day and age for brand owners to protect their patch of the online marketplace.
It’s a turf war between Online Travel Agents (OTAs) and tourism businesses as we fight to maintain our direct bookings.
In 2017, the giants of Expedia and Booking.com dominated more than 80% of the OTA market and inbound travellers booking through these sites increased almost 30% year on year according to stats published in the Herald. Based on this it’s clear to see why OTA partnerships can be advantageous – helping boost our sales in the off-season and provide an avenue for flogging unsold inventory. However a balance between direct and commissioned sales needs to be sought in order to maintain our business competitiveness and longevity.
An argument against the OTA landscape
They hold excessive market share
The online market is dominated by a relatively small number of OTAs who are using their market share and bargaining power to charge an unfairly high rate of commission. Forecasts show that the Priceline Group (which owns Booking.com) and Expedia will control 94 per cent of all online hotel and attraction bookings by 2020.
There are many other players in the online distribution landscape, including Viator and TripAdvisor – which is becoming less of a review site, and more an integrated booking solution for everything related to travel experiences: hotels, restaurants, vacation rentals, attractions, etc. With some many aggregators, why wouldn’t consumers shop around?
Commissions can reach as high as 30%
OTA’s like Expedia, Travelocity, Viator, Kayak and Priceline charge commissions as high as 25% just for serving operators their bookings on a golden platter.
It is this high level of commission which has prompted the recent wars between brand name hotel chains and OTAs. They’re so sick of paying out that they’re investing in advertising campaigns to encourage direct bookings via their sites. Check out the “Stop clicking around” campaign by Hilton and the “It pays to book direct” by Marriott.
We lose control over the consumer journey
OTA platforms have a profound effect on the online experience. They act as gateways to our websites and apps, as intermediaries and as sellers of our tourism services. This places them at the heart of the huge numbers of transactions undertaken online.
When selling products over these platforms it is impossible to tell our full brand story. The confirmation emails, pre-travel updates and marketing material that we’d usually send are lost within the system and we rely on the intermediary to deliver this. Whereas if we have direct bookings we’re in direct contact with the consumer from the outset and can ensure their digital experience is managed.
They can muscle in on your brand name
Operators can often find OTAs are bidding on their brand name in online advertising. This concept is known as ‘brand hijacking’ and strikes a difficult balance as, whilst you would want the OTA to be successful so they can deliver you more business, you don’t want too much traffic to be diverted from your main service website.
You would assume that your website would be the first result in Google search if you typed in your full brand name and hit enter – provided your site is SEO friendly and has no reason to be penalised by Google. Why shouldn’t you appear at the top?
Yet this isn’t how it works.
Google places pay-per-click (PPC) ads first, and shows organic search results below these adverts. AdWords users are paying to receive premium placement, so Google rewards them with prime placement in search results. Even if your business’ website comes in as the first organic link in Google search results, there may be 3-4 PPC results above this. Some of these may have bidded directly on your brand name, which is a problem for many big-name tourism businesses.
So how can you protect your brand?
Bid on your own brand name with Google AdWords
Bidding on your own company name is considered a very effective form of brand protection, and generates the highest level of return on advertising investment. Doing this will allow you to appear in the PPC slot at the top of Google search results, and control the first messaging that a consumer sees about your company. Think about what your unique selling points are and communicate these in the advert text to clearly show the value you can offer by booking direct.
Improve your quality score
Quality Score is how Google rates the quality and relevance of your keywords and PPC ads. It is used to determine your cost per click, and multiplied by your maximum bid to determine your ad rank as part of the auction process.
It is developed by analysing your website landing pages and accessing how closely these match the key phrases you are bidding on. It can also be influenced by click-through rate (CTR) and the historic performance of your AdWords account.
Quality Score = Lower Cost per Conversion
By optimizing your Quality Scores you’ll be setting yourself up for a higher ROI – because these scores also correlate to a lower cost per conversion. Cost per conversion is different from cost per click. It’s not how much you pay for each click, but how much you pay when someone takes the action you want them to take, whether that’s signing up for a free trial or making a product purchase.
Try the following to help improve your quality score:
- Keyword Research– Discover new, highly relevant keywords to add to your campaigns, including long-tail opportunities that can contribute to the bulk of your overall traffic.
- Keyword Organization– Split your keywords into tight, organized groups that can be more effectively tied to individual ad campaigns. Use the right keyword groups for each product/service you are promoting.
- Refining Ad Text – Test out PPC ad copy that is more targeted to your individual ad groups. More effective ads get higher CTR, one of the best ways to improve Quality Score.
- Optimizing Landing Pages – Follow landing page best practices to create pages that connect directly with your ad groups and provide a cohesive experience for visitors, from keyword to conversion.
- Adding Negative Keywords– Continuously research, identify, and exclude irrelevant search terms that are wasting your budget.
Include local search ads in your marketing campaign
Local Search Ads show on Google search in the “local search results” section of the page, or on Google Maps when users are searching for nearby related businesses. An example of a search that may trigger this ad format would be ’Show Hotels Near Me’.
These are great because they allow you to take up ad space within the local search results section of the page, where OTAs won’t be able to compete for.
Grab consumers with a retargeting strategy
Retargeting ads help bring back and convert guests who abandoned a website or shopping cart.
For example: a couple may visit your website while doing research for their honeymoon. They browse through your image gallery and check out the services on offer, before getting distracted and leaving the website. You can then use re-targeting campaigns to display adverts for your business on other well-known websites that the couple visit. These ads help bring them back and eventually complete their reservation.
You can also employ social re-targeting strategies to target consumers who have interacted with your website or social media accounts. This is effective if your brand has a strong social media presence – however you don’t want to encourage users to check out your business on social media if your last posts were in 2012!
Tell a deeper brand story
The Internet has become invaluable to attracting customers within the tourism space – and sharing your story can help you to pique interest. How? Instead of focusing solely on information about your tourism products, give your customers the opportunity to dive into what’s behind your company and your offerings. A family tradition? A personal goal to build a business? Your own travel experiences? Provide them with content that’s actually emotive instead of the sea of marketing jargon they’re bombarded with daily.
There’s also a wide range of formats to tell your story online, including videos, photos, other visuals, music, and text. Choose the ones that your business is strongest at, that your staff enjoy, and which flatter your brand the best.
Remember the best stories seduce and trap us. Build up grand imagery of your destination that inspires tourists; grow their desire to travel to your region and experience your products naturally. Then include compelling calls to action that allow you to close the sale.
As the travel distribution landscape continues to change, what remains key is that technology is the machine driving it all. In order to maintain competitive, tourism operators must master the digital space and walk the fine line between direct bookings and intermediaries.
So – how will you choose to navigate it?