Online Travel Agencies (OTAs) have elevated vacation rentals to a mainstream accommodation option for travellers, providing property managers and owners alike with an effective platform for their properties. Property managers with a strong marketing presence on these platforms are able to connect with a higher number of consumers.
The landscape of booking vacation rentals has evolved. OTAs are consolidating their dominant position within the short-term rental industry as more and more property managers and guests become increasingly dependent on them.
As this pattern continues, property managers are directly competing with more listings and OTAs have created an algorithm to reward the property managers that abide by their rules, ranking them higher and increasing their visibility.
What is the OTA ranking? When consumers search for their next trip on an OTA, the order in which vacation rental listings appear in the search is determined by the OTA.
Why is the OTA ranking important? There is an extremely strong correlation between a property’s ranking and occupancy: the higher a listing, the more likely a consumer is to see it and book it. Expedia, for example, have found that 75% of click-through traffic goes to the top 15 listed hotels.
Why do OTAs rank listings? By prioritising ‘better’ listings, OTAs increase the likelihood of a consumer finding a suitable property. Customers that have a positive experience when booking their trip makes them more likely to return to the platform. They also prefer listings which turn a higher profit and all of this leads to greater reputation and revenue.
How do OTAs rank listings?
There are a number of factors taken into account by OTAs to promote the best properties. These should be considered when you are listing your property on an OTA.
Availability, Booking Settings and Pricing
If your property is competitively priced and has the highest availability, it is likely that it will be ranked highly.
- Does your property have a high availability? Low availability listings will be ranked lower than those with higher availability. You want to ensure that any availability has the largest booking window possible, but make sure it is actually available (you don’t want to be penalised for cancellations).
- Is ‘instant book’ available? The ‘instant book’ feature will work in your favour; having it switched on will automatically boost your ranking.
- Is your property competitively priced? If your property is too highly priced, it is less likely to get booked. Equally, too low and it pays OTAs less to increase a listing’s visibility.
There are certain characteristics of your listing that will help its ranking. Clicks on your listing and photos, quality of listing content and the ‘lookers to bookers’ conversion rate (people looking to people actually booking) all impact your search ranking. Additionally, think about how often you are updating your content, the description length and keywords. For more information, on what makes a good vacation rental listing, please see our previous post.
An excellent operational strategy is essential to ensure the success of your properties, so make sure management is as proactive as possible.
- Response rate. ALL messages should be responded to as quickly as possible. Programmes such as ‘Superhost’ (Airbnb) and ‘Genius’ (Booking) measure whether and how quickly you respond. These statuses will vastly increase your bookings, for example, partners who join Genius increase their bookings by 18%.
- Number of host cancellations. One cancellation can lose you your title as ‘Superhost’ on Airbnb and cancellations you make will push you further down the ranking.
- Cancellation policy. Be flexible. The more flexible your cancellation policy, the higher your ranking as it improves the customer experience.
- Reviews are essential in boosting your property’s ranking. A large quantity of reviews boosts a listing’s ranking and even more important – review score has been shown to have the biggest impact on occupancy after price
OTAs can help you
OTAs favour new listings, giving them a temporary boost in their search rankings. It is important to capitalise on this and convert early bookings as this will have a snowball effect that will be difficult to regain if lost. Building bookings and positive reviews from the start will ensure long-term maximised profit.
Some OTAs use offers to attract consumers, such as coupons, length of stay discounts and introductory offers, that your account manager can advise you on. They may also provide baseline data on performance and reservation data. For example, Booking.com shows your competitive set -which listings you are losing out to when consumers choose an alternative. Although this is useful, access to full and extensive data should remain your priority.
OTA Loyalty or High Performance Programmes
Some OTAs have listing performance programmes, such as ‘Genius’ on Booking.com, which has a loyalty scheme whereby guests can pay a discounted price offered by hosts in exchange for improved visibility.
Airbnb’s ‘Superhost’ status has been shown to boost listing RevPAR by up to 60%. High listing ratings and low cancellations are two important qualifications that OTAs require.
Booking.com even feature a ‘visibility booster’ where setting your account to a higher level of paid commission will earn you points in the search ranking algorithm.
In addition to affecting your listings organic OTA ranking, consumers can refine their search through filters related to characteristics such as rating and price, placing extra weight on their importance.
OTA ranking is a big influencer of a listing’s performance.It is important to spend time focussing on your listing and management strategy to ensure you are ranked highly. There are a variety of factors that affect your ranking and so make sure that you are considering them all.
Part of your ranking is characterised by your pricing strategy. By keeping a constant eye on the prices of your competitors and your market, you will be able to make more informed decisions on how to align your pricing, which will boost your ranking.
Having good visibility of your own and your market’s distribution, listings, ratings and occupancy is also critical to performance and so data is key to helping property managers to optimise their revenue. By having an easy-to-view dashboard that aggregates this data on the listings and rates across OTAs, property managers can focus more time on their strategy.
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