By Doug Kennedy
June 6, 2012

In preparing to be a guest speaker at three different hotel conferences recently, I had our KTN team conduct some anonymous mystery shopping calls to see what would happen when we called directly to hotels to double-check online rates posted on OTA websites. 

I have to say the results were shocking, especially when I hear hoteliers complain so often about the commissions and other related costs of these third party channels.
 
To conduct the test we first had our KTN mystery shopper look online at some of the most popular OTA websites.  One piece of good news for the industry is that most of the time we found rate parity; the rate quoted on the phone was the same as what we saw online.  Out of the 8 times there was a discrepancy though, only 1 of the agents said they could match the lower rate at the OTA site; the rest suggested we book online. 
 
What was even more interesting was how the agents handled the situation when the rate was the same.  In these cases our KTN mystery shopper said something like “I see that same rate online at (OTA name); should I book it online there or with you?” 
 
The vast majority of agents responded with some version of “whichever you prefer…”   In fact of 22 mystery shopping calls when the rate was the same, not one agent encouraged our callers to book directly.  
 
Several even gave some resounding endorsements of the OTA’s.  Here are direct quotes from our mystery shopping calls:

• “When you’re checking (names of several OTA’s) they usually carry better rates…”

• “We are only showing BAR rate for those dates.  If you see that rate, you’re  better off making it online and saving a couple of bucks, you know, rather than calling us directly.”

• “Well, I mean, the Internet usually offers all those travel websites, they usually do offer a little bit of a discount rate, ‘cause they charge your card ahead of time.”

• “No, we can’t price match because we’re not affiliated with them at all, really, that’s just how those Internet websites work for any hotel.”

Most revenue and distribution managers agree that the OTA’s can be a helpful tool for reaching out to new guests and that it is a good idea to have a presence there, even if only for the “billboard” effect.  However when the guest calls directly, the hotel team needs to secure the reservation directly in order to:

Here are some training tips for your next front desk or reservations meeting:
 
Make Sure Everyone Understands The Importance of Channel Conversion.  Most frontline staff I meet in my training workshops these days are shocked to find out the commissions and fees which their hotel pays for reservations booked through OTA’s and other online channels.
 
Update The Team on Any Exclusive Offers That Should Not Be Matched  Some  hotels, especially those in highly competitive markets, have successfully worked out exclusive rate offers with certain OTA partnerships; in some of these agreements the hotel representatives are not supposed to match the exclusive online rate offer.  So this article is not to suggest that hotels should by any means try to work around special agreements for exclusive offerings.  OTA’s can be excellent marketing alliance partners when the relationship is managed correctly. 
 
Keep Frontline Staff Updated On What’s Available Online  Make sure that your frontline team has access to the rates the callers are seeing online, so that they can verify the rate the caller claims to be seeing is an actual rate being offered.  Provide them with web access if possible or otherwise provide another means of updating them on the rates being offered.  
 
Help The Team Understand Why Some Guests Prefer To Book Directly  Myself being a business traveler, it has been interesting to hear comments from other travelers I meet on planes and in airports about their utilization of OTA’s.  More than once I’ve been told by seatmates about how they first check for the best deals on their favorite OTA, but then they routinely place a call directly to the hotel’s local number to see if they will match the rate.  It is important to remind the team of the many reasons someone might call directly:


One complaint I also here from other travelers I have also experienced myself is that more often than not when I book through an OTA, I end up with a less desirable room option, such as restricted views, noisy locations, and generally a lower-tier accommodation. 

Understand Why We Should Not Let The Caller Go Back Online, Period!   Aside from the distribution costs of OTA’s, once the call ends and they go back online, we cannot control which website they will visit next or which hotel option they will click on.  Instead we should train our staff to say something to the effect of:   “If you’d like Mr. Perez I can take care of this personally for you right now…”
 
As a member of the management team at your lodging operation, you can help your frontline associates recognize the opportunities and to use these channel conversion techniques.  When you stop to add-up the potential cost savings by reducing OTA commissions and fees when the guests call directly, plus the additional revenue lost from callers who went back online but clicked on a competitor, the potential ROI on some investment in training in this area is significant.

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Doug Kennedy is President of the Kennedy Training Network, Inc. a leading provider of customized training programs and telephone mystery shopping services for the lodging and hospitality industry.  Doug continues to be a fixture on the industry’s conference circuit for hotel companies, brands and associations, as he been for over two decades.  Visit KTN at: www.kennedytrainingnetwork.com   Read his travel blog at ontheroad.kennedytrainingnetwork or email him directly:  [email protected]

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