Hoteliers have sought to improve their direct booking performance for years.
NB: This is an article from Cendyn
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The advancement of OTAs took the rug from under direct bookings, and yet today the ideal distribution mix – according to hoteliers – places two-thirds of bookings from direct channels.
Despite hoteliers making efforts to capture direct bookings – through digital marketing, loyalty programs, and investing in direct booking technology – many travelers continue to book via OTAs.
Since OTAs will continue to be a core part of travelers’ booking process, hotels are missing a trick if they consider them adversaries. There is a smarter way to genuinely secure a stronger future and improve the OTA partner relationship.
The influence of OTAs
According to the h2c Hotel Direct Booking study, 36% of hotel room bookings were made via an OTA in 2023 versus 21% directly via a hotel’s Internet Booking Engine (IBE). The proportion of OTA bookings has remained higher than IBE bookings since 2019, indicating that OTA booking rates won’t decline any time soon.
There are other reasons why OTAs aren’t going anywhere. New DMA legislation is giving OTAs greater prominence, especially in Europe, due to their deep market budgets. Research also shows that 70% of travelers would book via an OTA instead of directly on a hotel website if the price was the same, due to the security, convenience, loyalty discounts, and credible online reviews available. Furthermore, a study by Expedia found that four out of five online bookers visit an OTA at some point before booking, even if they actually book elsewhere.
According to hoteliers, OTA competition remains the top barrier to hotels achieving direct sales – and this sentiment was the same in studies done in both 2020 and 2024.
But what if hotels stopped viewing OTAs as competitors?
OTAs get guests through the door
Compared to hotels, OTA budgets for marketing, promotions, and gaining visibility on Google are incomparable. In 2023 alone, Expedia Group and Booking Holdings reported the highest figures, spending roughly US$6.9 billion and US$6.8 billion on marketing, respectively. Hotels tend to spend 5 to 15% of their total revenue on marketing – which rarely reaches anywhere near the heights of these OTAs.
OTAs also have the budgets to invest in getting the customer booking journey absolutely right, making it fluid and slick. And they have deep enough pockets to continually invest in the latest AI developments to support the guest booking journey.
