Do you actually know what’s in your contract with the OTAs? Hospitality owners often complain about high commission rates, brand hijacking in Google AdWords, and lack of control in marketing. However, when looking at the contract between OTAs and hotels, OTAs have many more rights than you would believe.
I have put in the research time and gone through several OTA contracts from Booking.com, Expedia, and other online travel agents.
Here are a few snippets explaining just how little control you have when working with an OTA.
1. “[OTA] shall be entitled to give a discount on the room price at its own costs to its closed user group members.”
OTAs define closed user group members as consumers who choose to become a member, have set up a password, have completed a profile, and are given special rates only when having booked before. These membership programs are on such a large scale that independent hotels don’t stand a chance to compete. The OTA, therefore, has power over you.
A member of the hospitality community recently complained that Expedia was undercutting their website by 10%. After investigating, it turned out that she had signed up for her property to be part of the Expedia Partner Centre. This meant that Expedia members would instantly get a 10% discount on all room bookings.
2. “Direct Marketing to Guests. The Accommodation agrees not to specifically target Guests that have been obtained via [OTA] in either online or offline marketing promotions or solicited or unsolicited mail.”
This is one that so many hospitality owners do, (even though we will never admit it). How many times have you seen a booking come in from an OTA only for the customer to call and ask a question, and during the conversation, it comes up that they “might” save a bit of money if there were to cancel the OTA booking and book with you directly? ?
Just be aware that you do it at your own risk, and if caught, you could have your listing removed from your OTA.
3. “In no event shall [OTA] be liable to the Accommodation for any acts or omissions on the part of any Third Party platforms.”
This means that a third party platform may set your accommodation price higher so that they can make more money. You don’t have any control over this and don’t have any ability to say that you don’t want to work with the third party.
4. “[OTA] is entitled to promote the Accommodation using the Accommodation’s name(s) in online marketing, including email marketing and/or pay-per-click (PPC) advertising. [OTA] runs online marketing campaigns at its own costs and discretion.
The Accommodation agrees not to specifically target the [OTA] brand directly through keyword purchases that use [OTA’s] Intellectual Property Rights.”
For those of you who have followed me for a while, you will know I talk about this regularly. This is the OTA admitting that they will use your property name in Google Adwords to get more traffic to their website.
For example, if your property is called “The Black Swan” and you are based in York, then Booking.com can use a Pay Per Click campaign on Google to get traffic for the search term “The Black Swan in York“.
If you aren’t bidding on your own brand name in Google Adwords, then someone else will.
The questions I have for you
1. Have you ever been guilty of any of the points above?
2. Are you bidding on your brand name?
Leave a comment below or start the conversation on Twitter with the #BookDirect and @BoostlyUK