In the past, booking a hotel room meant direct contact with the hotel, whether by phone, walk-in, or through a travel agent. Today, OTAs like Booking.com and hotels.com dominate the scene, offering convenience and visibility. Initially, this seemed like a win-win situation. hotels enjoyed modest commissions, effective advertising, and minimal costs to maintain an online presence.

As OTAs have grown, so have their commissions, transforming what once was a mutually beneficial partnership into a significant profit drain. According to a study from MasterCard, OTAs can slash up to 30% off your revenue with each booking. Even more concerning is how they stand between you and your guests, eroding the direct relationships that are crucial for cultivating repeat business. In 2022, OTAs accounted for 63% of hotel bookings. That’s a huge chunk of your revenue left on the table.

Let’s be clear, this isn’t about saying OTA bookings are worse than direct bookings. Both have their place in your hotel’s revenue strategy. OTAs are great for getting guests in the door for the first time, but the real power lies in turning those first-time visitors into loyal, repeat customers who book directly with you. Here’s how the benefits stack up:

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Advantages of OTAs

• Visibility: The 'Billboard Effect', being listed on an OTA often leads potential guests to seek out your hotel directly.

• Marketing Reach: OTAs invest heavily in global marketing, giving your hotel exposure to a broader audience.

Advantages of Direct Bookings

• Revenue Savings: Avoiding OTA commissions (up to 30%) significantly boosts revenue.

• Guest Relationship: Direct bookings mean you control the guest data, allowing you to foster deeper, more personalised relationships, often enhanced through loyalty programs.

• Loyalty Building: Direct interaction builds trust and encourages repeat visits, something OTAs can’t offer.

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The key is to use OTAs to attract new guests, then leverage a well-crafted loyalty program to turn them into long-term, direct-booking customers. This isn’t just about increasing direct bookings—it’s about transforming the way you connect with your guests and securing your hotel’s future. With over 8 years of experience helping hotels master this balance, we’ve seen firsthand how a strategic approach can make all the difference.

Lets take Classic Norway Hotels for example. By partnering with Loyco and integrating our loyalty program through VisBook, they turned the tide in their favor. In just six months, they converted 19% of OTA bookings into loyal members and saw a remarkable 50% increase in visit frequency compared to the industry average. This wasn’t just about reducing OTA dependence, it was about reclaiming guest relationships and significantly boosting direct bookings.

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Here’s how you can start converting OTA bookings into loyal, direct-booking guests:

• Exclusive Benefits: Offer irresistible perks, bonuses, room upgrades, premium amenities, or special event invitations, available only through direct bookings.

• Personalised Experiences: Use the data you collect from direct bookings to create tailored experiences that resonate with your guests, driving emotional connections and repeat visits.

• Reward System: Implement a points system where guests can redeem rewards for discounts or free services, turning occasional visitors into regulars.

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The secret is to harness the power of OTAs to boost your direct bookings. Start by optimising your OTA listings with compelling descriptions and high-quality images to attract new guests. Then, unleash your robust loyalty program to convert these first-time guests into loyal, repeat guests who book directly through you.

This isn’t just a strategy, it’s your blueprint for sustainable growth for your hotel. By focusing on a loyalty program that incentivises direct bookings, personalises guest experiences, and leverages OTA visibility, you’ll not only boost your revenue but also forge lasting guest relationships that ensure long-term success.

If you’re tired of seeing OTAs take up to 30% of your revenue and want to reclaim control over your profits, now is the time to act. At Loyco, we’ve developed a specialised program strategy specifically for hotels, designed to tackle this exact problem. And for a limited time, we’re offering the first steps of this strategy absolutely for free, no strings attached.

Click here to access the first steps of our strategy for free.