Third party intermediaries such as booking.com and expedia are very important, but commissions are getting higher. How can you manage this?
Sami: These are taking more and more space in our booking and clientele. So what is the opinion of the different GMs on how we can get our business through our brand.com, and how do we achieve balance between those third parties and our brand.com because there’s a huge cost in terms of commission.
We are not saying we don’t need them anymore, we do need them because they can bring business from the destinations where we cannot go and play, but the commission is quite high… and also if I have a client coming through third parties, okay I am willing to pay the 20% commission or 15%, 25%, but the second time he should come directly through my brand.com. If I do my job, then I don’t pay any commissions.
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So we are not saying we will fight with them but we have to have a balance. The owners are saying ‘why should I pay the operator when I can negotiate with the third party?’
Klaus: I completely agree with Sami, but at the end of the day, I think we as operators have to put ourselves at fault and say “why do people go to booking.com?” Maybe their platform is so much better than the ones we provide, and it’s easy to use, so maybe the question is why do they go to booking.com or expedia.com and not to our brand website?
Sami: It’s because of budget; we are not putting in a lot of money on marketing and they’re putting in millions.
Eddy: I think it’s about consumer behaviour. When you want to go to a destination the first thing you do is go on booking.com or expedia.com just to see what is there, what is available. So maybe we will never be able to compete with that but I think a discussion for this forum is [to address commissions].
These online travel agencies know hotels need them, and they play on that point and then they go to a hotel and say ‘I can increase your commission and then I’ll put you on the first page’. We’re all eager to get the business, so what’s happening is we keep paying higher and higher commissions and they’re doing the same thing with all the hotels.
So I think there has to be a discussion, similar to what we did during the recession in Dubai. Most of the directors of sales and marketing in Dubai would sit together and say ‘okay guys, lets agree on a bottom price that we’re not going to go to otherwise we’re going to go into a price war and we’ll all lose’.
Something similar to that concept where there is an understanding. Like Sami mentioned, we will never be able to live without them — life has changed, but we need to create that balance.
Heinrich: Experienced revenue management teams are key to finding the balance between OTAs, TOs and all other channels. Creating awareness through social media, being on top of your search engine optimisation and having close relationships with your suppliers are but a few of many activities necessary to optimise the right channel at the right time.
Mark: We must never forget the importance of OTAs and their contribution to the business, especially for independent properties who do not have the regional/international presence or exposure. Like any aspect of our room business, we need to evaluate the importance of OTAs (which will/may vary on a seasonal basis) together with careful use of the commission level.
For driving business to brand.com, there are a number of initiatives that we have implemented over the last 12 months in order to increase bookings via our own website, which will produce a higher net yield. We have re-vamped our website in not only content and images, but also to be compatible with all forms of mobile applications.
We have changed our booking engine to one which makes the booking steps even more consumer-friendly and provides us with more opportunities to up-sell. We have just signed up with a company to help us manage our PPC campaign and our community manager is busy working on SEO through keyword search; blogs, updated photos etc.
Serge: Third party intermediaries such as booking.com, Expedia, Orbit and others, play an important role in Atlantis, The Palm’s multichannel marketing strategy. These channels drive brand awareness and bookings in key emerging markets.
They also provide a billboard effect, which benefits atlantisthepalm.com by driving online traffic to our site. Looking at longer terms strategic partnerships with third party intermediaries enables us to keep a check on commissions and the value these channels bring. At various times of the year, Atlantis collaborates with these suppliers on strategic marketing activities to attract visitors from key emerging markets and drive bookings.
The Atlantis brand is about wowing the customer. We aim to impress our guests before their journey begins. The Atlantis online customer experience is far greater than that experienced on the third party intemediaries, which tend to be more commodity driven. We also have offers and packages, some of which are specific to atlantisthepalm.com
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