Creating strategic relationships with online travel agents to drive hotel room revenue

Abstract

Purpose Hoteliers are often frustrated by the significant fees charged for bookings by Online Travel Agents (OTAs), and they try to encourage more direct bookings that circumvent the OTA system. However, there are billions of dollars of room revenues generated by OTAs every year; and many companies in other industries sell their products through multiple channels. The purpose of this study is to investigate how hotel revenue managers can collaborate successfully with OTAs. Design/methodology/approach Qualitative methods are applied in this study, specifically focus groups and in-person interviews with market managers of a leading OTA. Content analysis is performed, using ATLASti 5, to discover emerging themes and categories from the transcripts. Findings This study highlights several OTA value propositions and how hotels can benefit from them. Additionally, the findings of this study reveal that effective two-way communication between OTAs and revenue managers is the key to success. An “optimization loop” is established, which specifies that partnership and collaboration between OTAs and hotels must occur in a circular sequence of communication, engagement, collaboration and strategy. Research limitations/implications A major limitation for this study is that interviews were conducted only with market managers, limiting the perspective to that of OTAs. Originality/value There is a paucity of research and dialogue discussing productive relationships between OTAs and hotel firms. Through in-depth in-person interviews with a diverse set of market managers from a leading OTA, this study brings to light an array of perspectives of what is required to optimize the OTA/hotelier relationship.