OTAs hit the headlines in the UK today as authorities unveiled a major investigation into their practices. The British competition watchdog is examining booking sites’ “clarity, accuracy and presentation of information” and even questioning whether they break consumer law.
It’s great news for consumers, but hoteliers should welcome it with open arms too. After all, it’s a very public acknowledgement that OTAs may not always offer travellers the best possible deal — a myth that has been around for far too long and one that we've been aiming to bust since we first launched the Direct Booking Movement.
Here's our Chief Operating Officer James Osmond on the probe: "We are delighted to see the CMA investigating pressure sales and misinformation by the OTAs. For a decade the OTAs have spent billions creating a false impression that the best place to book is always with them. It isn't any more. When you take into account the opportunity for upgrades, extra benefits and the best rates, direct is best."
The Competition and Markets Authority’s probe is examining four areas: whether search results could be skewed by commercial factors like how much commission hotels pay, the basis of various discount claims, potential hidden fees like taxes or booking charges and so-called “pressure selling”.
The latter, known as urgency messaging, has caught a lot of media attention this morning and is something we have thought long and hard about. Those highly visible notifications, for example telling you “six people are looking at this room right now”, are highly effective, hence why OTAs tend to use them so widely, but we’ve never been fully convinced that all urgency messaging enhances the consumer experience. We will watch the CMA’s assessment on that issue with great interest.
It will be a while before we get that — the CMA will be gathering feedback from across the sector until December 15 — so what should hoteliers do in the meantime?
Participate in the investigation
The Competition and Markets Authority wants to hear from accommodation providers who might have information or evidence relevant to their investigation. You simply have to fill out a questionnaire, which can be found on the case page for the probe, to make your voice heard.
Check your contracts
You have a duty to your customers to ensure that they are getting a fair deal no matter how they book. OTAs can be valuable partners, but given today’s news it’s definitely worth triple checking that third parties you work with are selling your rooms they way they ought to be. At last week’s Direct Booking Summit in Barcelona, Hyatt’s Geneviève Materne reminded us that all too often OTAs and wholesalers benefit from loose or lacking terms and conditions in contracts with hotels and a reluctance to police their compliance. That can’t continue; hotels must take responsibility for their distribution.
Spread the word that direct is best
The notion that OTAs always provide the best price is under pressure and the hospitality industry should grab the opportunity to lay it to rest. During New York’s Direct Booking Summit, delegates described how they would give postcards to OTA bookers on arrival that listed the benefits of booking direct, while others talked about using targeted email to explain what the hotel could offer versus an OTA. Whatever tactic you choose, make sure all your staff are ready to reinforce the direct is best message.
To read more about what hoteliers are doing to increase direct bookings, take a look at our round-ups from this year’s Direct Booking Summits. This recap from last week’s event in Barcelona has more from Hyatt’s Materne and the latest on email marketing, while this summary of New York’s conference has hotelier insight on loyalty, live chat and more.