“In an ideal world, you want all your bookings to flow through direct bookings channels. This way, you are saving on agent & OTA commissions. However, if you are struggling with direct bookings, then using agents and OTA’s is a viable option.
As much as hospitality consultants & marketing gurus may complain about agent fees and OTA’s commissions, you need to look at it from a different business perspective as an owner or manager. Let’s take a step back.
You see, every business has what we call a CAC (customer acquisition cost). Simply put, it’s the cost of acquiring a client. You’re paying for this cost either in TIME or MONEY. If you have more time, less money, then use OTA’s and agents to bring in those customers. Your 3-15% commission fee to an agent or OTA is your CAC. If you have more money than time, then advertise with a strategy to attract direct bookings. Whatever the average cost was in ad spend to convert 1 direct booking is your CAC.
There’s no set percentage in my mind. If you can attract bookings via agents/OTA’s you need an on-site strategy to grab that client’s data for future marketing AND a way to increase the AOV (average order value) of the client along with methods to maximize the LTV (lifetime value). When you have all of this in place, you can afford to pay more than your competitors to afford a customer. This means that an increased customer acquisition cost due to rising cost on Facebook, Google or OTA’s won’t hurt your business. This will soon leave you as the #1 choice in your prospect’s mind while your competitors wonder how you did it.
In terms of marketing strategies, I would urge you to be an expert in your area. Use tools like answerthepublic.com to find what people are searching for in your area and answer those topics with simple landing pages that either prompt prospects to get on your mailing list with a coupon of sorts or book their trip right now. You need to install Google Tag Manager on this page, load all your advertising pixels for retargeting marketing campaigns, and track button clicks through Google Analytics to understand how well your content performs. This is a powerful FREE organic strategy anyone can do.”