In the digital era, Online Travel Agents (OTAs) have become a key marketing channel for the hotel industry. From small hotels to large resorts, almost all properties rely on OTAs for visibility and bookings. However, many hotel owners still wonder: how exactly do OTA algorithms work to determine hotel rankings?
What Is an OTA?
OTAs, or Online Travel Agents, are digital platforms that sell hotel rooms to travelers. Examples include Booking.com, Agoda, Expedia, and Traveloka. OTAs make it easy for guests to compare prices, view reviews, and make reservations with just a few clicks. For hotels, OTAs are "online storefronts" that help them reach a global audience. However, the biggest challenge is how hotels can appear at the top of search results.
How Do OTA Algorithms Determine Hotel Rankings?
Each OTA has a different algorithm, but generally, hotel rankings are determined by a combination of the following factors:
Room Availability
OTAs prioritize hotels that consistently update their availability. If room availability is frequently empty or slow to update, rankings can drop.
Price & Parity Rate
OTAs are very price-sensitive. If the rates on OTAs are higher than those on the hotel's official website, the algorithm can lower your ranking.
Guest Reviews & Ratings
The higher the rating and the more positive reviews, the greater the hotel's chance of ranking higher. OTAs want to ensure guests have the best possible experience.
OTA Commissions
Although rarely discussed, the commission rates hotels pay to OTAs also impact visibility. The higher the commission, the more likely the hotel is to be promoted.
Sales Performance
OTAs assess a hotel's conversion history. Hotels that consistently receive bookings are usually given better rankings.
The Importance of Hotel Marketing Strategy
Relying on OTAs alone isn't enough. To stay competitive, you need a balanced hotel marketing strategy that combines OTAs and direct channels. OTAs can certainly generate significant traffic, but their commission fees are quite high. With the right hotel marketing strategy, you can:
Increase your hotel's brand awareness in the online marketplace.
Direct guests to book directly through your official website.
Reduce reliance on OTAs, resulting in higher profit margins.
Direct Booking vs. OTAs: Which is Better?
OTAs provide tremendous exposure, especially for new hotels. However, direct bookings offer greater financial benefits and build direct relationships with guests. Ideally, hotels combine the two: use OTAs to attract new guests, then find ways to encourage guests to book directly for their next visit.
Hotel Marketing Solutions with ecommerceloka
Managing OTA rankings while increasing direct bookings is complex. This is where ecommerceloka comes in. With experience in hotel marketing and hotel sales, ecommerceloka supports your property with:
Optimizing listings on various OTAs to increase your hotel's visibility.
Digital marketing strategies that encourage direct bookings.
Analyzing marketing performance to increase revenue.
OTAs are a crucial channel in modern hotel marketing. Understanding how their algorithms work can help you optimize your strategy and improve your ranking. However, don't forget the importance of direct bookings for business sustainability. With the support of partners like ecommerceloka, you can balance the two for maximum results.