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How hotels' marketing spend fuels the growth of OTAs

How hotels' marketing spend fuels the growth of OTAs

Today's hotel booking journey spans multiple touchpoints, with travelers engaging with hotel content over ten times on average before making their final decision. From social media interactions to website visits, email communications, and advertising touchpoints, hotels invest heavily in building awareness and interest in their properties. Yet at the crucial moment of booking, a significant portion of these engaged prospects turn to Online Travel Agencies (OTAs).

This pattern creates a costly scenario for hotels, who essentially pay twice for the same guest – first through marketing expenses to generate interest, then through substantial OTA commissions on the actual booking. But why does this happen, and more importantly, how can hotels break this cycle?

Understanding the Guest Journey

The answer lies in understanding how OTAs have positioned themselves in the guest journey. While hotels must spread their resources across the entire customer experience – from inspiration through booking to post-stay engagement – OTAs have mastered the art of dominating a single, crucial moment: the conversion phase. They can concentrate their substantial marketing budgets and technical resources solely on optimizing this critical step.

This focused approach gives OTAs a significant advantage over hotels, who must stretch their marketing budgets and attention across numerous touchpoints. This OTA advantage also comes with a hidden cost to hotels that extends beyond commission fees.

When guests book through OTAs, hotels lose access to valuable data about their customers' preferences, interests, and expectations. This gap severely limits a hotel's ability to deliver personalized experiences that build lasting loyalty. Every website interaction, content engagement, and pre-booking communication contains valuable insights that could enhance the guest stay – insights that are lost when bookings flow through third-party channels.

This data loss creates a significant barrier to delivering the kind of exceptional, personalized service that drives guest satisfaction and repeat bookings. Without understanding the full context of a guest's interests and preferences, hotels start each stay with incomplete information, missing countless opportunities for meaningful personalization.

Breaking the Cycle

The solution isn't about competing with OTAs on their terms or trying to match their booking interface sophistication. Instead, hotels need to leverage their unique ability to deliver personalized experiences that OTAs simply cannot match. This is where the Interaction Manager becomes transformative.

By capturing and centralizing guest interactions throughout their decision journey, the Interaction Manager enables hotels to build comprehensive guest profiles before arrival. This rich data empowers staff to deliver thoughtfully personalized service, from room assignments that reflect actual preferences to proactive amenity recommendations based on demonstrated interests.

The key is communicating this value proposition to potential guests before they make their booking decision. When travelers understand they'll receive a more personalized, attentive experience by booking directly – and hotels consistently deliver on this promise through the use of the Interaction Manager – the choice becomes clearer.

Moving Forward

As hotels begin capturing more direct bookings, they create a virtuous cycle: more direct bookings lead to better guest data, enabling superior personalization, which in turn drives guest satisfaction and loyalty. This not only reduces OTA dependency but also improves marketing effectiveness and creates new opportunities for revenue growth through targeted upselling.

The future of hotel bookings isn't about competing on price or platform functionality – it's about delivering and clearly communicating value that OTAs cannot match. When hotels effectively communicate and deliver on this promise, they can begin reclaiming their guest relationships and building a more sustainable distribution model for the future.