Hotel direct booking share falling as OTAs bid heavily for greater market share

The battle for direct bookings has entered a new phase as online travel agents ramp up efforts to establish ownership of hotel guests and their booking journeys

While OTAs and hotels have a mutually beneficial relationship, the Hotel Industry Trends Report 2024 from SHR Group exposes for the first time the way a recent influx of marketing spend from OTAs is fast reducing hotels’ share of direct bookings.

Key takeaways

• The share of reservations represented by direct bookings fell from 39% to 38% in 2023, having been stable for two years following a post-pandemic return to normal;
• Increased bidding on key search terms, including ‘brand searches’ that identify particular hotels, has sparked a sudden increase in cost-per-click, with Google Ads rising 62.5% from $0.16 to $0.26; The impact on Metasearch is even more stark, more than doubling from $0.21 to $0.48 (up 128.6%);
• SHR Group warns that hotels are in danger of becoming too reliant on OTA lead generation, to the point that it becomes financially impossible to recover their current share of bookings and return on advertising spend.

Download the full report at SHR Group