Why has “my” client made a booking on an OTA?

Variable price is the only marketing variable through which companies obtain income. Setting it is one of the keys to any organisation as, regardless of the acquisition limitations of consumers and production costs, it is necessary to consider the value of the service or product being offered in order to correctly position the offer with regards to the competitive set and the distribution channel, if an intermediated channel is selected.

Today, and in recent years, hotels have noted a change in tourist consumer behaviour that has directly affected strategic decisions related to this variable. They have been obliged to enter the world of dynamic rates with revenue management.

On the one hand, the tourist considers more than simply the value of the product or service: they also consider other aspects, such as the purchasing experience. On the other hand, the financial situation Spain has experienced in the last few years has turned the tourist into a “price seeker” inasmuch as establishments not only lowered their retail prices, but they also improved other dimensions of the product or service related to their intangible attributes (customer support or financing) with the aim of increasing their sales on a stage that was not favourable to them.

Furthermore, the emergence of new technologies and, specifically, the Internet had a decisive role in this change in the purchasing behaviour of tourists. This is due in part to the decision making process being made more dynamic as the result of more information being available, therefore favouring the appearance of the “digital consumer”, famous for having very high levels of connectivity.

As use of the Internet increased and this type of tourist consolidated their position, media presence became a “must-have” for any hotel. A priori, there were multiple benefits, among various issues, as it contributed to achieving a greater presence in the market, direct sales and disintermediating the channel. Many establishments increased their dependence on this channel after the birth of new forms of intermediation linked to new business models, offering a series of advantages to the tourist and granting them a pre-eminent place in the purchase decision making process. In this context, Online Travel Agencies (OTAs) began their activity. They stay ahead of consumer needs and understand perfectly the changes experienced in their behaviour.

They offer experience sites: a unique point of sale where a hotel booking can be made and image can be promoted by persuading visitors they have “the best price”.

Naturally, today this involves a reassessment of hotel establishments’ goals. The client must reach the hotel’s official website but the most important things is to ensure that client remains on the website for the longest amount of time possible, increasing the chances of a booking.

As a result, and although intermediation is necessary, the path towards direct sales presents the user experience as a key point in optimising income. Likewise, it shows perception in relation to price as an obstacle that must be saved given the fact the consumer still identifies OTAs today with “the cheapest rate”. The perceptive mechanism regulates the relation between the individual and the world that surrounds them, and all knowledge is acquired through perception.