I Have Decided To Leave The OTA’s (HomeAway, VRBO, TripAdvisor, Airbnb etc)

Below is a comment left by a manager on our previous blog post (The Results Are In – What Owners & Managers Really Think About OTA’s). They’ve decided to leave OTA’s all together and have kindly given us permission to use their comment as an entirely new blog post.

Enjoy!

I Have Decided To Leave The OTA’s

I have decided to leave the OTA’s out of my business marketing henceforth. Why?

TESTIMONIALS

Our Holiday Cottages have been consistently voted Nº 1 and Nº 2 by Trip Advisor Travellers in our small country, year on year, since we started in 2010. However, in 2016 the benefit we received by being so supported has declined.

TripAdvisor was there to send traffic to my website and my automated booking system but now they no longer do that. In 2010 TripAdvisor was being paid by me to work for me, today I am now a small cog working for them.

TripAdvisor was being paid by me to work for me, today I am now a small cog working for them.

Earlier this year, they increased their subscription charge by 30% – so I responded by de-listing one of my properties. They, in turn, called me and told me that if I did not list ALL of my properties, I could no longer list ANY with them. I told them on the phone to ‘get lost’. So far they have not de-listed the one property I still advertise with them.

The only reason I am staying with them IS because I am still voted as the Nº 1 romantic property on their site in my country – and I have all my testimonials posted with them. However, this is a very expensive way of keeping my testimonials in the public eye.

TRAFFIC

The number of enquiries I receive from TripAdvisor has reduced from about 300 a year, in 2010, to less than 15 a year today! And this is because they mitigate against me for refusing to allow them to collect my money for me. In fact, TripAdvisor implies to their ‘travellers’ that if they go direct and pay me, I will somehow steal from them – that they will be likely to deal with an internet fraudster. This is OUTRAGEOUS.

GOOGLE DOMINATION

The OTS’s are hogging the first page listing for all my search keywords – however, I’m still on page 1, but for how long?

COMPETITION

Between 2009 and 2013, our occupancy rate was around 75% – that’s 75% ALL YEAR! In 2013, TripAdvisor listed 750 holiday cottages for my country. In Spring 2015, they listed 7,200. Where did these people come from?

Well in 2013, the British banks were permitted to extend the ‘buy-to-let’ mortgage (until then designed to bolster the long-term let market) to the holiday cottage market. There had been a boom in the purchase of ‘second homes’ in the UK until 2008. Then it went dead.

By this simple slight of hand, the banks lured thousands of people into the NEW ‘buy-to-let holiday cottage market’. The advantages over the old ‘second home’ retail model were stupendous. Low down-payments, relatively low-interest rates (but still making the banks a killing in fees and interest payments) and perhaps more importantly, the ‘buy-to-let mortgage’ is a ‘commercial mortgage’ so these ‘second homes’, by another name, were now able to be run for tax purposes as a business. This meant that a huge dollop of dubious expenses were now ‘allowable’ against tax!

Well, the estate agents cited people like me who were attaining 75% occupancy rates, so properties were purchased in their hundreds of thousands by investors in the UK using a 50% occupancy rate as the economic justification. The result? A massive oversupply of so-called ‘holiday cottages’ into the market. And our rates have gone down to 45% at their worst. And the UK is desperately in need of houses for local people which have thus been taken out of the housing stock – an archetypal example of ludicrously crass government thinking.

Of course, there is an upside to this – but not for those who piled in. Although in Spring 2015 TripAdvisor had increased its listings from 750 to 7,200, by the Autumn 2015, they had lost 30% of these. So in 6 months they lost 30% of their business. Why? Because the first tranche of ‘buy-to-let mortgages’ had come up for renewal – and their owners could not justify a 50% occupancy rate.

In October 2015, our UK chancellor gave notice that the government would henceforth be raising a purchase tax on ‘buy-to-let cottages’ (stamp duty!) – in fact on any ‘second home’. But he announced that this would not be implemented until 1 April 2016 (April Fool’s day). Result? A boom in purchases prior to the tax implementation date by ‘investors’ who were still being told by the media that holiday cottages were money for old rope.

Eventually, these new ‘buy-to-let mortgage investors’ will come out of the market when they realise their business model is not viable.

THE FUTURE

As for us, we are sticking with it – AND we have now finally found a marketing model which sidelines our need for the OTA – thank heavens! And if you can come up with an OTA model that actually works for us, I’m all ears.

Thanks

Thanks for @MDLE for this epic comment. Be sure to check out their website: Romantic self-catering Hay-on-Wye Cottages | HideawaysInHay.

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