According to a 2023 Statista report, the global online travel and tourism market surpassed $595 billion. This presents a golden opportunity for Property Management Systems (PMS) to adapt and scale their operations to capitalize on this market, which is projected to grow at a CAGR of 12.6% until 2032.
Online travel agents (OTAs) are a lucrative avenue for PMS, with the revenue of U.S.-based OTAs alone exceeding $100 billion in 2023. This underscores the undeniable importance of leveraging the visibility and reach that OTAs provide for your property.
How Can a PMS Refine Their Relationship with OTAs?
Adapting OTA Strategies to Different Geographies
Finding the optimal number of OTAs for a PMS is one of the most important decisions to make. What makes this decision more tricky is when the optimal number of OTAs begin to vary based on Geography.
A research of ~5000 hotels in the U.S. revealed that there is no single dominant OTA when it comes to % of listing of a property. Instead, there are ~10 OTAs that are bidding as high as the direct channel of the official website of the property.
Similarly, here are the average number of OTAs in various regions around the world
| Region | Average no. of OTAs |
|---|---|
| South East Asia | 12-14 |
| India | 6-8 |
| Europe | 2-4 |
It is important to note that these numbers reflect the current situation. An alternative way of approaching the decision of number of OTAs for a property would be to double down and go for the unlimited OTA model which will catapult the visibility and reach of your property and significantly improve the revenue of the property.
Diversification of Connected OTAs
Traditionally, the easiest way to increase reach and visibility for your property has been to list them on the biggest OTAs and allocate most of your inventory to them. This led to a self-sustaining complacency cycle of listing properties on the largest OTAs, earning revenue from the largest OTAs, diversification becoming a moot point.
This model runs into multiple issues such as overdependence on a single distribution channel, limiting the reach and visibility of properties, and lacking the ability to scale your operations.
PMS’ must stay updated with technological advancements as the hospitality tech industry adopts emerging technologies such as AI, virtual reality, Internet of things, etc. The best way to do this is by diversification of OTAs.
For example, in the future, if a property is fully equipped with all these technologies, the PMS will be better off connecting with an OTA that caters to technologically advanced properties. This will ensure that the PMS provides the property with the maximum possible reach and visibility regardless of the niche.
Learning from the Best
Analyzing the channel mix of the market leaders offers vital insights for PMS’ navigating this complex sector. By studying their strategies, one can gain key knowledge about effective approaches across platforms, from online booking to direct channels
This understanding provides a comprehensive view of consumer booking behavior and preferences which can, in turn, help uncover emerging trends and opportunities.
Learning from competitors and adjusting strategies aligns with changing consumer dynamics is crucial for optimizing operations and maximizing the impact for a PMS.
Effortless Connectivity
Whatever we have spoken about thus far – be it adapting differing OTA strategies based on geographies, diversification of OTAs, or learning from the market leaders and informing your channel mix – all of these represent different operating systems. The differences may be computer systems, softwares, coding languages, inventory systems, etc.
In order for these systems to work in harmony, they need to be able to communicate seamlessly with each other. This is where Su comes in. With over 25 different APIs, a PMS can create a bespoke solution for their properties that incorporates the above insights.
Quick Guide for a Seamless Integration of APIs:
Mandatory APIs
Certain APIs are crucial for fundamental tasks such as property and room type management, rate plan updates, availability tracking, and reservation processing. When combined with the mapping Iframe, they facilitate the creation of a ready-to-go minimum viable product.
Bonus APIs
In addition to essential property management APIs, bonus APIs provide additional insight and control over the PMS which helps in streamlining operations further. These include rates & inventory control for customizing inventory and rates, reporting APIs for managing invalid credit card notifications, messaging API for guest-host communication, and reservation API for accessing booking data. A bonus feature, the failed update API, automates detection and reporting of failed updates, reducing manual oversight.
You can explore the world of APIs that Su offers in much more depth here
Conclusion
The global online travel and tourism market is on the path to the moon, and the PMS that want to go with the market have to leverage OTAs in the right way. As the market evolves, PMS needs to be equipped with the right tools and strategies in order to be in a position to seize the opportunities and maximize their growth.
This enhances the importance of ensuring effortless connectivity through a comprehensive suite of APIs like Su’s, which can significantly improve operations and maximize revenue for the PMS.
