Hotels’ most common complaints against Online Travel Agencies (OTAs):

Hotels Vs. Online Travel Agencies

Brand hijacking in Google Adwords

Lack of control of any marketing

Rate parityHigh commission rates

Lack of customer relationship management.

These problems persist because of stringent contracts where OTAs hold all the power.

4 troublesome OTA contract clauses Always read the fine print in your contract with any OTA.

Standard OTA contracts between hotels contain a lot of legalese, but hotels should be aware of these four types of contract clauses that work actively against a hotel’s best interests.

Clause #1: Closed User Groups

“[OTA] shall be entitled to give a discount on the room price at its own costs to its closed user group members.”

Large OTAs are able to offer discounts and loyalty programs en-mass by cutting into their commissions. For independent hotels that cannot offer robust loyalty programs, this can be very damaging.

How to protect yourself: Insist on wording that OTA closed group discounts only be offered with your express permission or participation in a discount program.

Example from OTA contract:

How to protect yourself: Be very careful about how it’s worded. Insist upon an addendum clause that allows you to market to your own guests, as long as they have provided direct consent.

Clause #2: Owning the Guest Relationship

“Direct Marketing to Guests. The Accommodation agrees not to specifically target Guests that have been obtained via [OTA] in either online or offline marketing promotions or solicited or unsolicited mail.”

Though it is fair for OTAs to manage initial bookings with new customers, OTAs should not have the right to own your guests forever.

Example from OTA contract:

How to protect yourself: Insist upon clauses that allow you to choose which OTA affiliates and owned metasearch channels you want to work with. At least maintain the right to disconnect from any third-party platform.

Clause #3: Rate Parity on Third Party Platforms

“In no event shall [OTA] be liable to the Accommodation for any acts or omissions on the part of any Third Party platforms.”

Hotels often give OTAs the right to use their IP (photos, name, logo, etc), which helps to sell bookings. However, third-party sellers sometimes use tricks to make the OTA rates appear lower than the hotel rates!

Example from OTA contract:

How to protect yourself: Insist against such clauses in your contracts. Then make sure your name is properly trademarked so that you can lodge a formal complaint with Google in the event of a hijacking.

Clause #4: Brand Hijacking

“[OTA] is entitled to promote the Accommodation using the Accommodation’s name(s) in online marketing, including email marketing and/or pay-per-click (PPC) advertising.”

Brand hijacking is universally despised by hotels, yet here it is, written into the contract! Not only that, many OTAs then insert a clause to prevent hotels from doing the same to them.

Example from OTA contract:

Additional Legal Protections

Additional Legal Protections Hotels need to review their contracts carefully and insist upon clauses that will protect their interests.

The name of your OTA partner and the rates at which it sells your bookings should not be considered the intellectual property of the OTA.

Clarify intellectual property definitions

Additional Legal Protections

Makes sure it’s written into your contract that running your own best rate guarantee programs is not a violation of the OTA’s rate parity rules.

Insist on being able to use your hotel’s own best rate guarantee program

Additional Legal Protections

Hotels should insist upon API access to an OTA and its affiliate sites. This will allow the hotel to monitor rate parity.

Require transparency checks from the OTA

Strength In Numbers

Hotels need to work together and lobby for the necessary changes in their contracts that will protect them from OTA bullying tactics.

Let's make hotels equal partners with the OTAs once again.

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