TRENDS & 'TALES

Revealed: How hotels can combat the skyrocketing ad budgets (and cost) of Online Travel Agents

Booking comparison websites have been accused of "brandjacking" independent hotels -- but, with the right digital strategy, it IS still possible for brands to drive direct, at a significantly lower cost per room.

There has been a backlash against Online Travel Agents (OTA’s) and third party booking sites from the national press, in support for the independent hotels and B&B’s who are struggling to compete with the travel giants. The Times recently revealed that when booking through an online platform such as these, approximately £1 in every £5 spent is going to the booking site rather than the hotel itself. The Sun even called for the UK competition regulator to ban "brandjacking" - where the comparison sites pay Google to appear high in the rankings.


We recently published a case study of our work with Strand Palace hotel, detailing the various digital strategies hotels can adopt today to drive direct revenue and lower their cost per room. (N.B. In case you missed it, read how we delivered a cost per room of 6.4% for Strand Palace Hotel).

Over recent years, we have have seen the cost per room soar between 16-22% for affiliate and third-party bookings.



Whether booking a family holiday or a romantic getaway, leisure travellers have a variety of resources at their fingertips to help them discover destinations, evaluate travel options and book their trip. However they navigate the path to purchase, one constant factor is the importance of social media.


With the increasing competition from OTA's on Google, the influence of hotels on Social Media help to ensure the brand stays front of mind for consumers (not the third party). Although converting every guest doesn’t happen overnight, with the right digital strategy in place, the monetary benefits will be seen in no time.


Kantar Media reveals booking.com as the biggest spender on paid search advertising, splashing out almost £20 million in the first quarter of 2018.

New research by Kantar Media identified the biggest investors in the travel sector, listing a small group of online travel agents, including Booking.com, OnTheBeach.com and Trivago, who dominated paid search in the first quarter of 2018, each spending over £7 million on search through Google.


The battleground is for hotels competing for 'top of the fold' ad placements on Google. The study reveals the keyword ‘Hotels’ had the highest spend in the sector, with businesses spending an estimated total of £8,504,262 in three months (over seven times more than on the next most invested-in keyword, ‘air bnb’.)

Richard Poustie, CEO, Kantar Media UK, commented: "Both search and display advertising are incredibly competitive in the travel sector. It’s important, therefore, to remember that spend in itself is only one part of the campaign – if brands want to get a good return on their advertising investment, it is vital that there is consistency across their online search and display, and that their chosen search terms complement their display advertising."


Booking through third parties does not build brand loyalty, nor does it increase the customer lifetime value. At Entroxy, we continually work with hotels to create new and innovative campaigns to set the hotels apart from their competitors and drastically reduce the cost of sale.


Until next time,

- C




CASE STUDY: STRAND PALACE HOTEL

The only way to stay ahead of the competition is to keep up with the latest in digital. This case study takes a deep dive into the various strategies and creative tactics we undertook to drive direct room bookings for Strand Palace and deliver an impressive 15:1 ROI at a 6.4% cost of sale (based on total media costs and our monthly retainer). Read the case study >>

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