Key points
- A fresh industry study revealed OTA bookings have dropped to 22% in 2025, down from 30% just a year ago, signaling a dramatic shift in how hotels approach distribution.
- According to the latest State of the Distribution Report 2025, conducted by RateGain in partnership with New York University and HEDNA, a majority of hotels have scaled back their distribution teams in favor of bolstering marketing operations.
- Many hotels are turning to loyalty-driven direct booking strategies, targeted digital advertising, and metasearch platforms to reduce dependency on OTAs.
Hotel News: OTAs Losing Grip as Hotels Double Down on Direct Channels
Hotels worldwide are accelerating their push toward direct bookings, and the once-dominant role of online travel agencies (OTAs) is showing cracks. Booking.com, in particular, is seeing significant declines in hotel reliance, with its market share eroding faster than expected. A fresh industry study revealed OTA bookings have dropped to 22% in 2025, down from 30% just a year ago, signaling a dramatic shift in how hotels approach distribution. In the middle of this changing landscape, this Hotel News report examines how hoteliers are reshaping their strategies to regain control over guest relationships, drive profitability, and diversify beyond traditional OTA channels.
Hotels are moving away from OTA platforms like Booking.com and are instead promoting direct sales through their own sites
Image Credit: StockShots
At the heart of this transformation is the collective realization that OTAs—once hailed as essential partners for visibility and bookings—have become increasingly costly middlemen. Hotels are now investing in advanced marketing tools, loyalty programs, and direct booking funnels, reshaping the competitive balance between OTAs and property operators.
Direct Sales Campaigns Reshape Hotel Distribution
The drive toward direct sales is not accidental. According to the latest State of the Distribution Report 2025, conducted by RateGain in partnership with New York University and HEDNA, a majority of hotels have scaled back their distribution teams in favor of bolstering marketing operations. The report highlights that 63% of hotels are reallocating resources to develop stronger direct sales channels. This pivot comes as technology platforms allow even small operators to compete with OTAs by offering sleek booking experiences, transparent pricing, and personalized offers.
A new Europe Travel Market Report projects that direct hotel bookings in Europe will climb from €32.5 billion in 2025 to €41.3 billion by 2028, a trajectory that positions direct channels as the most important growth driver for the coming years. In comparison, OTA bookings are expected to rise more modestly, indicating a gradual but steady redistribution of market share.
Revenue specialists across Europe confirm the downward trend for Booking.com is not a seasonal blip. Instead, the decline has persisted for several months, with hotels reporting direct booking growth of up to 15% year on year. Meanwhile, Expedia has captured some of the share lost by Booking.com, with gains of as much as 300% in certain markets, reflecting a wider reshuffling of customer acquisition strategies.
Why Hotels Are Shifting Away from OTAs
The weakening ties between hotels and Booking.com stem from multiple factors. One is the explosion of supply within OTA platforms. Alternative accommodations—vacation rentals, serviced apartments, and other non-hotel options—are increasingly favored by travelers. In fact, Booking.com’s supply of alternative stays now surpasses 8.4 million listings globally, a figure that continues to grow rapidly.
This surge dilutes visibility for hotels, making it harder for them to stand out, while simultaneously fueling greater price competition. As a result, many hotels are turning to loyalty-driven direct booking strategies, targeted digital advertising, and metasearch platforms to reduce dependency on OTAs.
Consultants across Europe emphasize that the decline in Booking.com bookings is partly driven by hotels themselves. By restricting OTA availability during peak demand periods and enhancing loyalty benefits, hoteliers are nudging customers toward booking directly. Others are experimenting with creative strategies such as bundled offers, targeted paid search, and curated digital campaigns to attract and retain guests.
Alternative Accommodations Continue to Disrupt
The rise of vacation rentals adds another layer of complexity. According to Key Data’s U.S. Vacation Rental Index for Q2 2025, rentals outperform hotels in revenue per available room across every region. This is particularly evident in the U.S., where hotels continue to face slower recovery in business travel, group bookings, and international demand.
Vacation rentals appeal to domestic leisure travelers seeking flexible, drive-to destinations and longer stays—segments that hotels are struggling to capture. OTAs are capitalizing on this demand shift, which explains why Booking.com can still report overall growth in gross bookings despite losing share from hotels. The company’s accommodation portfolio has expanded significantly, with vacation rentals and apartments driving growth at a faster pace than hotel room nights.
Hotels are finally waking up and taking legal action against various OTAs due to high commission rates, unfair practices and exploitation
Image Credit: AI-Generated
Lawsuits And Regulatory Pressure in Europe
The turbulence is not confined to market forces alone. Booking.com is grappling with a growing legal battle in Europe, where over 10,000 hotels have joined a lawsuit alleging the company’s parity clauses violated EU competition law. With the deadline for participation extended, the number of claimants could rise even further, intensifying financial and reputational pressure on the OTA.
Adding to the strain, the European Commission officially designated Booking.com as a “gatekeeper” under the Digital Markets Act (DMA). This regulatory shift has forced the company to adjust its pricing practices, with studies showing a significant drop in cases where Booking.com undercuts direct hotel prices. While this has improved rate integrity for hotels, it has also diminished the OTA’s pricing leverage in European markets.
Industry experts note that while the DMA plays a role, broader consumer behavior is equally important. Traveler caution, rising price sensitivity, and shifting demand patterns are contributing to the drop-off in OTA bookings, particularly in markets like Amsterdam, where overall travel demand has softened.
How Hotels Are Winning Back Guests
Hoteliers are increasingly focused on reclaiming customer relationships that had been diluted by OTA dominance. Many operators now view OTAs as tools for customer acquisition rather than primary sales channels. Once a first-time booking is secured via an OTA, the emphasis shifts toward converting that guest into a loyal direct customer through personalized offers, loyalty discounts, and superior digital experiences.
Large global hotel groups as well as independent operators are adopting this approach. Loyalty programs, in particular, have become a central weapon in reducing OTA dependency. By offering members-only discounts and perks such as free upgrades or flexible cancellation policies, hotels are building stickier direct booking channels.
OTAs Pursue Diversification Strategies
While hotels strengthen their direct pipelines, OTAs are diversifying aggressively. Booking.com’s “connected trip” concept, which bundles accommodations with flights, car rentals, and activities, is gathering traction. Expedia, too, is leaning into the activities sector, investing in experiences that can be bundled with trips. These moves highlight how OTAs are repositioning themselves as broader travel ecosystems rather than just booking intermediaries.
Yet despite these efforts, many hoteliers remain unconvinced that OTAs will maintain their former level of dominance. Instead, operators see the diversification as an admission that their traditional lodging stronghold is under pressure.
The Road Ahead for Hotels and OTAs
The shift away from Booking.com marks a turning point for the hotel industry. For decades, OTAs held the upper hand, leveraging vast marketing budgets and consumer trust to capture a disproportionate share of bookings. Now, technology is leveling the playing field. Hotels, empowered by advanced digital tools, data-driven strategies, and loyalty programs, are reclaiming the direct relationship with their guests.
This transformation will not happen overnight, nor will OTAs vanish from the distribution landscape. Instead, what lies ahead is a more balanced ecosystem, where hotels no longer feel compelled to rely on Booking.com or Expedia as their primary sources of demand. By embracing metasearch, refining loyalty initiatives, and capitalizing on digital marketing, hotels are positioning themselves to secure sustainable long-term growth while reducing commission costs.
The ongoing lawsuits, regulatory scrutiny, and diversification strategies pursued by OTAs reflect the changing dynamics of global hospitality. For hoteliers, the message is clear—direct channels are no longer supplementary, they are central to survival and profitability. The winners of this shift will be those who adapt swiftly, innovate boldly, and maintain an unwavering focus on guest loyalty.
As the industry continues to evolve, one thing is certain—the days of OTA dominance are over. Hotels have taken back control, and the momentum behind direct bookings shows no sign of slowing. The future belongs to operators who balance OTA exposure with powerful direct sales strategies, ultimately reshaping the hospitality distribution landscape for years to come.
For the latest on showdown between OTAs and hotels, keep on logging to Bangkok Hotel News.
