OTAs in APAC: Helping small & independent accommodations grow

What links a traditional ryokan in rural Japan to a boutique hotel in Sydney? The look and feel couldn’t be more different, but the formula for success is the same at its core: fill beds year-around and deliver unforgettable experiences to guests.

“OTAs have supported us to improve occupancy: the number of bookings doubled since we started using OTAs”South Korean hotelier

As international arrivals to the Asia-Pacific (APAC) are slated for a strong rebound in 2023 following various travel restrictions and COVID-19 related lockdowns, the fulfilment of these objectives promises big opportunities for accommodations across the region. But the new international marketplace isn’t without its challenges.

A 2021 study by EY Parthenon, in cooperation with Booking.com, analyses these challenges — looking back at pre-pandemic travel — to see how Asia-Pacific’s small and medium-sized accommodations are fairing in a competitive global marketplace, as well as how online travel platforms (OTAs) such as Booking.com helps SME accommodations.

The study surveyed almost 400 accommodation providers, including 20 in-depth interviews with hoteliers, to capture the unique market dynamics of the region, as well as the thoughts and feelings of individual hoteliers on the ground.

Take a look at a selection of hotelier testimonials below and find the full report at the bottom of the page.

Attracting a global pool of guests

In 2019, almost 300 million international tourists touched down in APAC, up almost 300% on the year 2000. Given what’s on offer is everything from the beaches of Bali to the hustle and bustle of Tokyo, this boom in global visitor numbers doesn’t come as much of a surprise.

It’s a big opportunity for all accommodations, large and small. But lacking the marketing capacity of global chains, small and independent properties are often at a structural disadvantage and must work harder to get global eyes on their offering.

This is where online travel platforms can help. Their established international user bases give smaller local accommodations global online visibility, without the need of significant upfront investment in marketing campaigns. This allows accommodation providers to bring in guests from outside their typical sourcing market, while reassuring guests unfamiliar with their destination that their booking is legitimate.

• “We have guests from all over Asia, Europe and North-America finding and booking our accommodation through the international OTAs we work with. This really diversifies our guest mix.” — Medium-sized accommodation at city centre, Australia
• “We work with OTAs to increase our exposure. It is difficult to attract international guests on our own, so international OTAs are very helpful for us.” — Medium-sized business hotel at city centre, Japan
• “The OTAs provide access to guests that otherwise wouldn’t have booked with us. Typically our direct bookings only consist of domestic travellers, while international guests book through OTAs.” — Small accommodation at tourist destination, Australia

Delivering localised customer service and establishing trust

Travel is all about trust, and travellers need to know that a property is legitimate and their payment is secure. Online platforms are an established intermediary, and help in fostering this trust through verified user reviews and reliable ratings.

The customer-facing infrastructure — such as automatic translation and 24-hour customer service — offered by online platforms also means that travellers can be sure they will be supported throughout their booking journey and beyond.

• "Visitors know that accommodations listed on international OTAs can be trusted. Even when there are any problems with their stay, they know they can rely on the OTA for support. On top, both parties are ensured of payment.” — Medium-sized hotel at holiday destination, South Korea
• “Communication with international guests can be difficult. For example, calling with European guests is almost impossible due to the time difference. The real-time booking function of the OTA is therefore very convenient for both our guests and ourselves.” — Small accommodation at tourist destination, Australia
• “It can be difficult to answer questions from guests in different languages. Fortunately, the international OTAs help us provide customer service to guests that don’t speak Japanese.” — Ryokan in rural area, Japan
• “The OTAs’ payment functions are useful for our guests, as it simplifies the booking process to just a few clicks.” — Medium-sized business hotel at city centre, South Korea

Boosting bookings

Maximising bookings and ensuring rooms are filled is the number one goal for all accommodation providers. Most small and independent properties use a mix of distribution channels to achieve this. Direct bookings dominate, but channels such as traditional travel agencies and online travel platforms also play a role.

Online platforms are risk-free and flexible. No fee is taken until a room is sold, and hoteliers are free to list and delist rooms, meaning if direct bookings are strong during peak season, for example, they can adjust their OTA allocation to match demand.

The international reach of online platforms means that many accommodation providers will see a rise in incremental bookings, but many will also notice a boost in direct bookings.

• “Australian travel is largely concentrated around school holidays. British holidays in September really help us stay occupied during low season for Australians.” Small accommodation at tourist destination, Australia

“We started using OTAs in 2018. It has at least doubled our sales. We are of course selling many rooms through OTAs but, funnily enough, direct bookings have also significantly increased since we are present on OTAs.” — Medium-sized holiday resort, South Korea

• “We use multiple OTAs to maximize the number of guests we attract. Each OTA has a slightly different customer base, so by combining them we try to optimize the number of [incremental] bookings.” — Medium-sized hotel at city centre, Japan
• “OTAs have supported us to improve occupancy: the number of bookings doubled since we started using OTAs.” Medium-sized accommodation at city centre, South Korea

Hearing from our accommodation partners is crucial in understanding their challenges and how we can support them best. We want to help our partners to thrive while, as always, making it easier for everyone to experience the world.

Flip through the full EY Parthenon report here.