Selecting suitable hotel suppliers for your online travel agency can be daunting, given the variety of options and factors to consider. With over 6,000 travel distributors present in 190+ source markets, it’s important to understand how to choose the right hotel suppliers for your online travel agency. Here’s a straightforward resource to help you guide this decision-making process and find suppliers that align with your business needs.
Hotel Suppliers – How Do You Choose?
Each supplier brings a unique portfolio of properties, from luxury 4 and 5-star hotels to budget-friendly hostels. The key is identifying a supplier whose inventory aligns with your target audience. For instance, if your OTA caters to young sightseers and backpackers, there’s little need to offer a range of high-end hotels. Instead, focus on suppliers that provide the types of accommodations your customers are seeking.
Seven key factors to consider when selecting suppliers
- Property Type
Adding a new supplier to your OTA can take time, regardless of the number of properties they offer. Therefore, opting for suppliers with a more extensive inventory is generally advantageous. More options mean a higher likelihood of meeting customer demands, thus enhancing the overall customer experience.
- Quantity
Consider the geographical distribution of properties offered by potential suppliers. Some may provide widespread coverage, while others specialize in specific regions. Partnering with niche suppliers can be beneficial if your audience is particularly interested in certain areas.
- Distribution Area
Your profitability hinges on the pricing agreements you have with suppliers. Different suppliers may offer the same property at varying prices due to their distinct contracts with hotels or secondary suppliers. Carefully review the buy rates offered, as these rates directly influence your profit margins.
- Buy Rates
Suppliers operate with different rate types, significantly impacting how you market and sell hotel bookings. For example, net rates allow you to set your markups, while commission-based rates are final but include a profit share. Understanding these nuances will help you choose suppliers whose rate types match your business strategy.
- Rate Types
To streamline operations and reduce costs, seek suppliers who offer additional services like car rentals, flights, and tours. However, it’s crucial to maintain the quality of hotel offerings for the sake of bundled services. Prioritize finding suppliers who offer exceptional hotels, even if they don’t provide a full suite of services.
- Bundled Services
Suppliers often have specific requirements, such as maintaining a certain look-to-book ratio. Ensure their terms, including sales quotas and service fees, are compatible with your business model.
- Terms
The complexity of integrating a supplier’s inventory into your system can vary. Some suppliers require multiple API integrations, which can increase setup costs and delay your ability to start selling. Opt for suppliers with simpler integration processes to minimize these challenges.
With this knowledge, you can select the right hotel suppliers for your OTA. Prioritize suppliers who align with your business goals, target audience, and operational needs. This thoughtful selection process will streamline your operations and enhance your customers’ experience.
