How to save on OTA Commission
Actual Hotel Campaign
Online Travel Agencies (OTA), such as expedia.com, booking.com and hotels.com can be vital to your hotel, especially if you are an independent hotel, but at what cost? Typically, it’s 15–30% commission per room booked, but can go even higher depending on your agreement with the OTA. In order to minimize these costs, the ultimate goal is to have guests book direct with your hotel. This not only alleviates commission fees, but allows you to market directly to your guests in the future.
DAE & Company works hard to develop strong digital campaigns which would allow you to book more customers direct on your website and establish a database for low-cost future marketing.
Securing reservations through your own advertising builds brand loyalty, increases your database, and saves you money. It also helps to further develop the relationship with your best customers – returning guests – allowing for future revenue that costs you zero in additional advertising dollars. We know this because we’ve done it.
Create campaigns that maximize your return on investment and create opportunities for future marketing campaigns, loyalty programs and future revenue.
Typically, the marketing plans we develop for our resort properties are fully-integrated campaigns that utilize both digital and traditional mediums, although most traditional mediums have some aspect of digital included. A well-rounded plan ensures that you will be seen no matter where your customer is in the booking process… whether they are simply researching and dreaming, or ready to book.
For the purpose of this case study, however, we will be analyzing and comparing digital ad spend only, as digital is easily tracked and we are able to attribute revenue to each ad.
Our digital campaigns are carefully researched and designed to invest in terms and key phrases that are actually driving bookings, not just click-thrus. We develop copy and creative that maintain brand integrity utilizing a strong call-to-action. We carefully monitor results and shift our spends to maximize revenue throughout the campaign, reporting stats to our clients each month.
Based on a 10-month campaign, our average Return On Ad Spend (ROAS) is 8:1, which means for every $1 spent in advertising, you receive $8 in revenue.
Cost for media per reservation is approximately 12-14% of revenue. This is a savings of 7-16% over OTA commission.
Real Number Results
DAE & Company just saved you $64,000 to $128,000
Note: Above results are annual results for a resort hotel.