This article is adapted from our latest ebook, Marketing 102: Build Your Distribution Network to Get More Bookings. You can download your free copy here.
Online travel agents are growing, spurred by the DIY nature of today’s consumers. These platforms, such as Viator, Expedia, Musement, Get Your Guide and so many more allow customers to research and plan their ideal getaways according to their interests and their budgets. Customers can also do this on-the-go on their mobile phones, laptops or tablets, which makes it an ideal channel to reach digital travellers.
So, why should tour and activity operators sign up with online travel agents?
1. You are able to cast a wider net
Unless your business is well-established online or if you have a lot of resources to invest in your marketing efforts, an online travel agent is likely to have a wider reach than you ever would.
OTAs rank higher on search engines and have the knowledge and resources to market travel products to the right people. By advertising your products on such distribution channels, you are able to promote your tours and activities on a larger scale, to a wider audience and access different niche markets.
2. OTAs have fantastic mobile apps and responsive designs
This allows customers to research, book and pay for their next tour on any screen.
From 2011 to 2015, mobile bookings have grown by a whopping 1700% and 45% of travellers use their mobile phones to book activities for their trips. Mobile booking facilities are becoming a norm and OTAs offer an inexpensive and convenient way for smaller tour and activity businesses to enable mobile booking.
However, relying solely on online travel agents leaves your company vulnerable as you can become dependant on them for bookings and sales.
Here are some scenarios to consider before signing up for every OTA:
1. Change in commission
OTAs can easily change their commission rates whenever they choose to, and they are more likely to do so if they have market dominance. This would drive up your marketing costs, which in turn would either increase your prices or lower your revenue. This is why it is important to diversify your distribution channels.
2. Growth in metasearch engines
A metasearch engine is a tool that allows users to pull information from all corners of the internet. Good examples of these include well known flight search engines like Kayak or Skyscanner. More and more travellers believe that they can find better deals and more value through meta searches compared to OTAs, effectively cutting out the middleman (the OTA in this case) from this supply chain.
3. Diluting your brand
Many OTAs do not display the name or information about the tour or activity supplier on their listing pages, which can be a downer for companies who are looking to build their brand online. Customers end up remembering the OTA instead of the company that actually provided the experience.
So, will OTAs dilute your brand too much? I posed this question to Viator’s VP of Business Development, Ken Frohling, and here’s what he had to say:
What we have found is that our customers aren’t typically searching for 'Joe’s San Francisco Segway Tour'; they’re searching for 'San Francisco Segway Tour'. They rely on the fact that we’ve identified reputable operators so their focus can be on identifying the individual elements of each tour, and activities that are just right for them. In some cases we do include the name of the supplier where we think it will help aid travelers further in their decision-making.
4. Competition from other online marketplaces
There are also quite a few OTAs out there and it can be difficult to figure out which one to use. Although it is useful to note that you can always switch from one OTA to another, the cost of switching can be rather high, both in terms of money and time.
5. Cancellation policies
What are the cancellation policies of the OTA? Do a little research before signing up because some OTAs have incredibly strict policies that do not allow you to cancel a tour or activity even when the weather is not cooperating with you. Some go as far as to penalise the supplier for last-minute cancellations.
Consider these questions when picking an OTA to market your tours:
- Who do I want to target? What kind of customers are likely to find me through this OTA?
- Do I want to reach the masses or target a specific niche?
- How much am I willing to spend on commission? Does the added cost on this OTA benefit me in the long run?
- Will I receive support if I encounter a problem with the platform? What are other suppliers saying about this OTA?
- Does the booking and payment system I currently use integrate seamlessly with the OTA of my choice? Is the additional administrative work worth it if there’s no integration?
Here at TrekkSoft we integrate with the major OTAs and distribution channels out there, allowing you to manage all of your channels and bookings in one place and in real-time.
Here's how to get started with an OTA
- Do some research online and come up with a list of 3 - 5 OTAs that you might want to work with. Have a mix of niche and mass targetting OTAs.
- Find out what other suppliers in your region and/or niche are saying about OTAs. Are they making valid points that also apply to your business?
- Join Facebook or LinkedIn groups and ask other members about their experiences to find out if signing up with an OTA is for you.
- Get started! Marketing your products through an OTA will give you a head start over competitors by being available and bookable online and on mobile devices too.
Do you have any other advice for tour and activity operators interested in selling their services on OTAs? Let us know in the comments below.
To give you more tips on building a five-star distribution strategy, we've published an ebook series with everything you need to know: