Instant Booking is not likely to Increase hotel Direct bookings
While the answer to the question, “Is Instant Bookings on Tripadviser good for hotels” is generally YES, it is not necessarily good in every respect. In this analaysis of the pros and cons of using TripAdvisors Instant Booking (TA-IB) Hotel Miraie in Barcelona Spain, says do not expect TA-InstantBookings to increase your total sales. It is an alternative distribution for the same channel that you will already have your OTAs competing in. It may be a more cost effective alternative as TA-IB commissions are 10-15% whereas OTAs may be 20-35%.
In their words “total sales will NOT increase with instant booking, but rather you will be able to distribute them through more coeffective channels. In other words, you will NOT sell more. The advantage is in the transfer of bookings through channels, in that positive cannibalisation from OTAs to your direct sale.”
The article concludes “As a hotel, you have two options: do nothing -and leave OTAs like Booking.com to make the most of the opportunity- or jump on the bandwagon yourself and compete with the OTAs face to face.”
More about Instant Bookings Evolution
For more on exactly what TripAdvisors instant bookings is and how it evolved see this article on Tnooz
Some of the significant point in the article follow:
TA-IB is a commission based “bidding” model for all partners like online travel agencies, hotel chains, global distribution system, etc. With trip connect it is also avalab to hotel who have thrir own branded booking engine approved by TA.
It differs from the standard metasearch model where “partners bid via a cost-per-click (CPC) value for each click that a user makes on their link. It is similar now to the agent model now popular with OTAs where they charge hotels a commission paid after a guest’s stay.
For a hotel ownerthe advantages are taht the CPA fees are tracked and paid on actual stay out of real revenue.
- Estimates are that TripAdvisor gets 13% commission on metasearch
- For every $13 in bookings OTAs spend on TripAdvisor metasearch ads they get roughly $100 in bookings, on average.
- Hotel pay about 13% commission to get top spot on metasearch
- Small hotel pay about 15% for customers from OTA sites like Booking.com
- Rates for TA-IB is expected to fall to 10% once the market is working well next year.