One of the most common discussions in the Travel industry revolves around the role played by OTAs. I’ve been a party to many of these discussions, and I’m always surprised by the fact that OTA executives do such a poor job of defending themselves against all the criticism. Of course I understand why: as a company becomes bigger – and especially if it’s a public company – executives need to be more diplomatic and careful in their statements. But the effect of that is that many Operators are left with a negative impression of the OTAs, and choose to minimize their participation in the OTA channel, which is I think a big mistake.
Here’s what I’d say in response to the Top 10 most avoided questions asked to OTAs (if I was running an OTA, and my PR department was on vacation). This is using the example of the experiences vertical, but the same arguments are almost identical for other sectors.
Complaint 1: You take too much commission – I can’t afford to lose 25% of my revenue
Complaint 2: This OTA model is out of control. It’s not a sustainable model.
Complaint 3: Why won’t you display my brand on my listing?
We do now. Ok fine, the EU forced us to. But previously:
Complaint 4: You don’t add any value – you are just re-listing other peoples products, and competing against me on things like Google Ads
Complaint 5: It’s my customer, not yours, and you don’t give me customer data.
Complaint 6: My marketing agency told me to focus on direct business, to keep the commission.
That’s nice of them. It’s what they do, so you’d expect them to say that. It’s not wrong, but you need to be diversified and do both. Again, it’s ONLY about yield.
Complaint 7: Your customers always create the most customer service problems
If your product information is up to date, I don’t think there is any merit to this argument. Some sites with deep discounts might attract a different type of customer. For 90% of OTAs, that’s not the case.
Complaint 8: You don’t understand or care about the industry – its only about making money
Complaint 9: Why would I work with you, when you might take my competitor, call it your own ‘branded’ tour – and feature it in preference to my products
This one is tricky. Let’s move on
Complaint 10: We are your customer, not the other way around. You should treat us with more respect.
Part 2 (coming soon), is of course how AI is going to affect this whole ecosystem.
Spoiler alert: It’s going to get shaken violently and thrown upside down.
