In today’s business landscape, the digital transformation of hospitality has become essential. Traditionally, businesses operated with a website, customized email addresses, and PABX systems. Over time, this evolved to include social media pages, and the latest evolution is e-commerce, an essential and rapidly developing business tool.
E-commerce can contribute up to 25% of total revenue for city hotels, though this varies depending on the destination. Despite its significance, e-commerce is not typically covered in formal education, unlike specialized fields such as sales and marketing, pastry arts or mechanical engineering. As a result, well-established brands have invested in in-house training programs, often training reservations managers to take on e-commerce responsibilities, or hiring dedicated e-commerce specialists to manage this important function.
E-commerce for hotels means all business generated through online channels including your website, Global Distribution Systems (GDS), Online Travel Agencies (OTAs), and other third-party platforms. Understanding key principles and strategies is crucial for leveraging this segment effectively.
One of the first steps is ensuring your hotel’s online profile stands out. Highlight the unique features of your property, including its proximity to key locations such as the airport, hospitals, convention centers, and business hubs, to make it easier for potential guests to discover your property, even if they haven’t visited before.
While a hotel’s own website is a critical part of this strategy, many overlook the importance of a strong presence on third-party platforms. These platforms have huge marketing budgets, global reach, and a user-friendly booking process that attracts travelers. While we may not like paying commission fees to OTAs, these portals are essential for driving visibility and revenue. It’s a necessary investment to achieve new bookings, often without much effort. It’s rewarding to log off at the end of the day and wake up to several new bookings.
To optimize your e-commerce strategy and manage commission costs, here are a few key rules:
- Maintain Rate Parity: OTAs like Booking.com and Expedia constantly monitor the rates offered across various platforms. If they find discrepancies, they may reduce your visibility on their site. Ensure that the rate on your website matches the rates on all other platforms. Be careful not to offer very low rates on OTAs or run too many offers it can result in undervaluing your product and paying commissions on top of a discounted price. Instead, direct guests to book through your website by offering added value without violating rate parity.
- Pay Commissions on Time: If you’re a smaller hotel without a dedicated e-commerce team, opt for automatic commission deductions from OTA bookings if the platform has that option. This will help streamline payments and avoid any late fees or complications.
- Manage No-Shows: Always check arrivals and cancel no-shows within 8 hours to ensure OTAs don’t consider them as confirmed bookings. This is critical for maintaining good relationships with third-party platforms and keeping your profile up-to-date.
- Use a Channel Manager: Managing multiple platforms and rate adjustments can be cumbersome. A channel manager allows you to handle your hotel’s profile, images, rates, and inventory from one central platform. It will then distribute this information to all subscribed OTAs and GDS, helping to cast a wider net and avoid errors.
- Encourage Reviews: After guests book through OTAs, encourage them to leave reviews about their experience. Actively engage with these reviews by responding thoughtfully. Positive reviews boost your visibility and improve your online reputation, leading to better rankings on OTAs.
At Hospitality K Consult, we have a dedicated team to manage hotels e-commerce platforms and apply best practices to grow your revenue generation through OTAs and other e-commerce platforms. We also train your team to be able to apply E-commerce strategies to grow your business.
For more information or to schedule a consultation, contact us at info@thehospitalityconsult.com.