Recently, a revenue manager reacted to my LinkedIn post about independent hoteliers’ overdependence on the OTAs by stating 'Even with the best intentions, money and talent, there's no way independents can beat the big OTA's in search and make money'.

There's no scheme where they can get a positive ROI on investing search. Google has been trying to break up the OTA monopoly on search for years, but never succeeded.”

This statement is wrong in so many ways, I simply do not know where to begin.

1. Let’s start with the obvious. The mega OTAs are spending upwards of $10 billion on Google Ads, Google Hotel Ads, Google Display Network (GDN) and all other Google marketing formats. Google is NOT trying to break the OTA monopoly - on the contrary! Without a single contract with 750,000 hotels, tens of thousands of APIs, a multibillion dollar CRS, investing in customer service and payroll for 18,000 plus marketers, support, techies, area managers, etc., Google is making a cool $10 billion!

2. Yet, in spite of the billions in marketing spend, the OTAs are spending on marketing an average of $250 per month per hotel on their platform. This is it! Can independent hotels spend $250 and more on their marketing per month? Best practices require hoteliers to be spending at least 4% of room revenue on marketing.

3. Talking about ROIs, at my company NextGuest, now part of Cendyn, we tracked the cost of direct online distribution in the course of 20 years across our more than 5,000 plus independent hotel clients. You know what? The average cost has stayed consistently in the range of 4.25% - 4.5%.

4. An independent hotel can increase direct bookings by investing in inexpensive marketing: Ex. all the free stuff: Google Business Profile, free booking links in GHA, free directory listings, etc. owning 100% SOV on hotel brand name keywords in Google Ads. Using the Pareto Principle, targeting the property’s key feeder markets that generate 80% of business via GDN and Google Ads and leave the 20% to the OTAs. Invest in GDN retargeting. Invest in content marketing, in CRM technology to retain your past guests, convert OTA customers to direct guests and create brand ambassadors, etc.

5. Independent hoteliers have a great advantage over the OTAs: Hoteliers know much better than the OTAs their property’s product, their guests and preferences, destination, local attractions and activities, and can create unique hotel packages and offerings.

Some revenue managers think the direct online channel is a distraction, even a competition to what they are doing. How can we make sure that revenue managers are not averse to the direct online channel?

The only way is to a) combine the current revenue generation positions into a Revenue Dept, incorporating revenue managers, sales, marketing and CRM specialists, and b) incentivize revenue employees on achieving lower average Cost of Acquisition of bookings.

Max Starkov
Hospitality & Online Travel Tech Consultant & Strategist

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