Navigating Online Travel Agencies (OTAs) for B&B Owners: Strategies and Considerations

In today’s digital age, Bed & Breakfast owners face a critical decision: to partner with Online Travel Agencies (OTAs) or not. These platforms, such as Booking.com and Expedia, offer increased visibility but come with their own set of challenges. Let’s explore the nuances of this decision and strategies for success in the B&B market.

The OTA Dilemma

OTAs can be a double-edged sword for B&B owners. On one hand, they provide a vast audience and can help fill rooms, especially for new establishments. On the other, they often charge high commissions and can lead to a loss of control over your business.

Pros:

• Increased visibility to a global audience
• Potential to fill rooms during off-peak seasons
• Access to OTAs’ marketing budgets

Cons:

• High commissions (often 15-25%)
• Loss of direct relationship with guests
• Potential for overbooking and other logistical issues

Strategies for Using OTAs Effectively

If you decide to use OTAs, consider these strategies to maximise benefits while minimising drawbacks:

1. Use OTAs as a Marketing Tool: Treat OTA bookings as a way to introduce new guests to your B&B.
2. Convert OTA Guests to Direct Bookers: During their stay, show guests the benefits of booking directly next time.
3. Offer Direct Booking Benefits: Provide perks like complimentary afternoon tea or a local welcome hamper for direct bookings.
4. Strategic Pricing: Consider increasing OTA prices to cover commission costs.
5. Manage Availability: Block high-demand dates on OTAs to encourage direct bookings.
6. Limit OTA Dependency: Aim to keep OTA bookings below 10% of your total reservations.

Alternatives to OTAs

Many B&B owners have found success without heavy reliance on OTAs:

• Strong Website and Booking System: Invest in a user-friendly website with an efficient booking system.
• Direct Marketing: Utilise Google and Facebook advertising to reach potential guests.
• Google Hotels: Take advantage of this free tool to increase visibility.
• Build Relationships: Foster a loyal customer base through excellent service and communication.

Considerations When Reducing OTA Usage

If you’re considering reducing or eliminating OTA partnerships, keep these points in mind:

• Gradual Reduction: Consider slowly decreasing your OTA inventory rather than abruptly cutting ties.
• Existing Reservations: Have a plan for handling bookings already made through OTAs.
• Occupancy Impact: Be prepared for a potential initial dip in bookings as you transition.

Data and Analytics

Leveraging data is crucial for making informed decisions about OTA partnerships:

• Tracking Performance: Monitor key performance indicators (KPIs) such as occupancy rates, average daily rate (ADR), and revenue per available room (RevPAR) for both direct bookings and OTA bookings.
• Guest Insights: Use data from OTAs to gain valuable insights into guest preferences and booking patterns, which can inform marketing strategies and property improvements.
• ROI Analysis: Regularly analyse the return on investment from OTA partnerships versus direct marketing efforts.

Legal and Contractual Obligations

Understanding the legal aspects of working with OTAs is essential:

• Contract Terms: Carefully review OTA contracts, paying particular attention to rate parity clauses and cancellation policies.
• Compliance: Ensure you understand and comply with UK regulations regarding short-term lets and OTA partnerships.
• Exit Strategies: If you decide to terminate OTA partnerships, know how to do so properly, including handling existing bookings.

Technology Integration

In today’s digital landscape, technology plays a crucial role:

• Channel Managers: Use channel management software to efficiently manage listings across multiple OTAs and your own website.
• Property Management Systems (PMS): A good PMS can integrate with OTAs to streamline operations and reduce the risk of overbookings.
• Automated Messaging: Implement automation tools to manage guest communications, even for OTA bookings, to encourage direct bookings for future stays.

Seasonal Strategies

Different seasons may call for different approaches:

• Peak Season: Limit OTA availability during high-demand periods to maximise direct bookings.
• Off-Peak: Leverage OTAs more during slower periods to maintain occupancy rates.
• Special Events: Develop unique strategies for major local events or bank holidays.

Guest Education

Educating guests about the benefits of booking directly is crucial:

• Transparency: Be open with guests about the costs associated with OTA bookings.
• Loyalty Programmes: Consider implementing a simple loyalty programme for repeat, direct-booking guests.
• Personal Touch: Emphasise how direct communication can lead to a better guest experience, with the ability to cater to special requests more easily.

Case Studies

The Strategic OTA User

Jane, a B&B owner in the Lake District, uses OTAs strategically. She limits OTA availability during peak seasons and uses them to fill rooms during quieter periods. By offering exclusive perks for direct bookings, she’s managed to convert 60% of her OTA guests into direct bookers for their next stay.

The OTA-Free Success

Tom, who runs a boutique B&B in Cornwall, operates successfully without any OTA partnerships. He invested heavily in his website and local partnerships, and focuses on providing an exceptional guest experience. His occupancy rate has steadily increased over the years, with 80% of his bookings coming from repeat guests and their referrals.

The Gradual Transition

Sarah, a B&B owner in the Cotswolds, successfully reduced her OTA dependence over two years. She started by limiting OTA inventory and investing in digital marketing. She now maintains a 15% OTA booking rate, down from 70%, and has seen her profits increase due to reduced commission costs.

Finding the Right Balance

Ultimately, the decision to use OTAs should align with your business goals and lifestyle preferences. Some B&B owners thrive on full occupancy and are willing to pay OTA commissions to achieve it. Others prefer more control and are content with lower occupancy rates if it means more direct bookings and less stress.

As one B&B owner put it, “What it boils down to is this – do you want to be full EVERY night (which I call work myself to death) and make LOTS of money because you’re too busy to spend it? Or do you want to have a life and a business?”

Conclusion

There’s no one-size-fits-all answer to the OTA question. Evaluate your unique situation, consider your goals, and don’t be afraid to experiment with different strategies. Remember, you can always adjust your approach as you learn what works best for your property and your lifestyle.

Whether you choose to embrace OTAs, use them sparingly, or forego them entirely, the key is to make an informed decision that aligns with your vision for your B&B. After all, it’s not just a business—it’s your home and your life.