Guide to OTA commissions
20 Jun, 2019
The emergence of online travel agencies has changed the habits of travellers. Now almost 70% of online accommodation bookings are made through OTAs. These platforms allow owners to offer the rental of a hotel room, an apartment or a gîte. In return, a commission is charged to the lessor and in some cases to the traveller. These service fees contribute to the financing of platforms that offer several tools and services to owners. This article helps you better understand the administration of service fees.
Commissions, instructions for use
When a traveller books accommodation via an OTA, the owner must pay a sum of money to the platform. Some agencies decide to split this amount between the owner and the traveller. This commission corresponds to a percentage of the amount of the reservation. Each online travel agency sets its own rate.
These service fees, which are levied on each reservation, help finance the services offered by the OTAs to the owners. Indeed, the platforms are in charge of managing all the online ads, from the publication to the booking process, the owner just has to provide the content. The ads are translated into several languages to reach a large community of travelers around the world. Reservations are processed automatically from confirmation to payment according to the owner’s settings. At the same time, a support service is available 24 hours a day for both owners and travellers. Teams are also in charge of checking the reliability of comments, an element that plays an important role in an institution’s e-reputation.
Comparison of commissions between the main OTA
Airbnb has recently updated its service charge policy. Initially, these costs were shared between the owner and the traveller. From now on, the platform gives the hotelier a choice. He may decide to bear the full service charge, i.e. 14% of the amount of the reservation, himself. Or he can choose to share the commission with the traveller, in which case the fee is 3%.
As far as the Booking booking platform is concerned, the service charges are only payable by the owners. The percentage varies between 15% and 17% depending on the city where the rental is located.
Finally, the model set up by Expedia is inspired by that of Booking. The online travel agency will charge the owner a commission of 15% of the amount of the reservation. However, fees can be as high as 20% in some cases. If the establishment is booked in a package deal (transport + accommodation), the owner must pay a 20% commission to the platform. Indeed, this offer system allows the owner to gain visibility, his establishment is put forward. That’s why service charges are higher.
Tips for limiting commissions
With travellers becoming increasingly connected, OTAs have become indispensable tools for owners of B&Bs, hotels and guest houses. However, since commissions are taken from each reservation, the total service charge is quite substantial for the owners. For this reason, it is recommended not to depend entirely on online agencies. OTAs should be seen as an acquisition channel to attract new customers.
In order to limit the amount of commissions, it is recommended that hoteliers and gîte owners have their own website. In fact, more than half of the travellers who find an establishment on an OTA will visit its website. Travellers should therefore be encouraged to book online. Thanks to a responsive site (which adapts to all media) with an integrated booking engine, travellers can book in a few clicks from their computer, tablet or smartphone. Amenitiz offers you this service in an offer combining the creation of the website, the implementation of a booking engine and the installation of a channel manager to manage all the bookings coming from the different channels. Do not hesitate to ask for a free demonstration of our solution by filling out the form below :
[INSERT CONTACT FORM DO NOT TRANSLATE]
On each reservation made, online travel agencies charge a commission to cover the costs associated with the services offered to the owners. In the long run, the amount of the service charge can be substantial for owners who receive the majority of bookings through OTAs. That is why it is recommended to use these platforms in addition to a website where the traveller can simply book. An OTA should be seen as a tool to acquire new customers and generate traffic on the institution’s website.
20 Jun, 2019
Did you like the article ? Share it!
More articles that might interest you
Running a bed and breakfast requires passion, some technique and the right software. Things ar
Your life should be just as full of satisfaction as it is full of responsibilities, right? You can o
For hospitality workers like you understanding that a lot of types of tourism exist is crucial
For hoteliers or hospitality industry professionals it's essential to have a thorough understanding
I'm not exactly reinventing the wheel by saying that it's fundamental to have a website - an online
As a hotelier, you know that every guest is different, and each one has specific preferences when it
As a hotelier, managing payments can be a complex and time-consuming task. With so many transactions
As a bed and breakfast owner, you're not just providing a place to sleep and eat – you're creating
Online bookings are a crucial part of the hotel industry these days. Most hoteliers have long since
The vacation rental industry has become increasingly competitive, with more properties being listed