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Online travel agents (OTAs) dominate the innovative living industry, capturing the attention of nearly 80% of travellers before they finalise a booking. However, many guests still value the benefits of booking directly through operator websites to receive a more personalised experience or a better rate.
This article looks at how you can leverage direct booking software, alongside OTAs using a property management system (PMS) to maximise your profit.
The future of OTAs: Opportunity or obstacle?
Valued at USD 600.5 billion last year, the OTA market is projected to grow by 7% annually between 2024 and 2032, driven by greater customer allocation of disposable income for travelling and recreation.
OTAs provide extensive reach for property managers, for example, Airbnb spent $950 million on global advertising in 2023. However, they come with high commission fees that impact profit margins. Large OTAs charge an average of 15-20% in fees. Meanwhile, direct booking software hosted on a company website considerably lowers commission fees, retaining more of the total booking value and significantly improving profit margins.
Property managers can use their commission savings from a direct booking portal to offer guests more competitive prices, encouraging deal-hunters to find their property on an OTA before booking directly to save money. This dual-channel approach, where operators utilises OTAs as part of their marketing funnel, alongside direct booking software powered by an all-in-one property management software, can create a seamless channel strategy that maximises revenue across diverse audience segments.
Optimising channel strategies for different traveller types
This dual-channel strategy works well when operators understand the varied needs of different traveller segments. Customising the booking experience based on audience preferences can boost conversions and build stronger guest relationships.
An IBS Software survey found that younger travellers are increasingly drawn to personal connections – with 38% of Millennials and Gen Z using traditional travel advisors for a more curated experience. On the other hand, 63% of Baby Boomers favour direct bookings, preferring booking directly on vendor websites.
For both these guest segments, OTAs serve as a starting point to discover properties, while direct booking sites can win conversions by offering unique customisation options, virtual consultations, or chat support for a concierge-like experience.
A well-designed and intuitive booking portal is best placed to capture business away from OTAs by offering a straightforward booking experience with transparent pricing.
Environmental considerations have begun to play a larger role in booking decisions, with 75% of 18-24-year-olds considering sustainability in rental options. Operators who highlight eco-initiatives and certifications during the booking journey – such as OTA SilverDoor’s carbon calculator for corporate stays – are well-placed to attract this demographic.
Building loyalty among business travellers
Business travellers represent the largest customer segment for serviced apartments in the UK, accounting for 45% of bookings. Corporate guests are typically looking for short-term accommodations (like hotels or serviced apartments) but often prioritise factors beyond price, such as loyalty programs, flexible payment options, and reliability for repeat stays.
OTAs specialising in corporate travel, like SilverDoor, help operators connect with this niche market, while direct booking software enables operators to offer business-friendly incentives such as “book now, pay later” and flexible cancellation policies. Loyalty programmes that favour upgrades or special perks for frequent travellers strengthen brand loyalty and encourage further direct bookings.
Personalisation is key to any loyalty programme or remarketing activity, and operators that use AI tools can benefit from features such as enhanced profiling, customer support automation, and automated resource management. Using these tools can level the playing field with OTAs, giving operators the opportunity to scale effective marketing communications to relevant, engaged audiences looking for repeat business bookings.
Industry data shows that corporate travel is one area where operators can save the most commission, with only 28% of corporate stays being booked directly in 2022, down from 38% in 2019. OTAs are the largest source of business in corporate stays, capturing 36% of bookings, with 15% of these being extended stays.
Leveraging long-stay bookings and flexible property models
Operators seeking to maximise revenue should consider tailored strategies for longer stays, which often vary by season or demographic. For instance, OTAs help generate initial awareness among long-stay guests, but operators can use direct booking channels to provide exclusive long-stay discounts and customised packages.
An all-in-one PMS can support these efforts by automatically adjusting rates and amenities for extended stays, that typically range between one to three months.
For guests staying over 90 days, an initial digital viewing or consultation can ensure a good fit, particularly for coliving communities or to verify tenant suitability and financial stability.
Long-stay OTAs provide visibility, but a booking portal with a long-stay-friendly process streamlines the guest verification process while capturing bookings without incurring OTA fees.
Coliving properties in seasonal tourist areas can benefit from an adaptable model, accommodating longer stays in quieter months before shifting to short-term rentals during peak seasons (to take advantage of higher tourist demand).
Our CEO and Founder, Giles Horwitch-Smith, explained this strategy:
“Running different lengths of short and long stays can maximise occupancy throughout the year, increasing operating income by several percentage points depending on location and seasonality, while adapting rates to seasonal demand can maximise profits from existing units.
“Flexible lease terms and adaptable spaces also enhance the living experience for guests across different lifestyles based on seasonal usage of shared spaces. This can be taken further by operators utilising first-party data to send personalised marketing materials that dynamically display these adaptable spaces based on guests’ previous usage.
“With hybrid working and the way businesses - and guests - are looking to utilise space, especially those in busy city centres, operators need to be flexible with their models and join the fast-growing trend of attribute-based renting of space in their coliving, BTR and serviced accommodation properties.”
The role of a PMS in a dual-channel booking strategy
As the innovative living industry continues to embrace digital tools, a comprehensive PMS can help operators manage complex multi-channel strategies, creating efficiencies and providing a level of personalisation that matches guests’ diverse needs.
From business travellers seeking loyalty rewards to younger travellers valuing sustainable features, integrated PropTech solutions can offer a tailored guest experience while managing costs and optimising asset profitability for operators. When combined with effective OTA and direct booking strategies, it creates a seamless booking ecosystem meeting the needs of today’s varied traveller segments.
Giles further added:
“OTA commissions can be difficult to manage and are always top of operators’ considerations, but these costs should be viewed as part of a standard marketing budget, with OTAs treated as just another channel in the funnel.
“The crucial point is that operators don’t solely rely on OTAs for bookings and can complement regular interest and awareness provided by the likes of Airbnb with their own direct booking engine, where they can offer more competitive rates and still make larger profits on bookings thanks to commission savings.
“For those guests and bookings that do come directly from an OTA, it is important that operators still utilise their own systems, capturing data for remarketing and future communications to build loyalty and encourage repeat (direct) bookings in the future.”
res:harmonics PMS offers all of the essential tools that coliving, BTR and serviced apartment operators need to manage this mix of booking types, with intuitive features that allow operators to respond to seasonality and maximise profits across all asset classes.
Request a demo to find out how our coliving, build-to-rent and serviced apartment software can automate and scale up your operations.
In the meantime, download the Ultimate Guide to Long-Stay Bookings to learn more about how property management software supports long-stays.
