How AI boosts digital advertising and direct bookings

Recent advances in artificial intelligence’s handling of digital advertising have increased the possibilities for hotels to grow direct bookings and compete with OTAs

Feb 23, 2024

AI-powered ad campaigns, especially when managed alongside manual campaigns, increased the direct revenue share for hotels that implemented them, according to a white paper by hotel technology provider D-Edge Hospitality Solutions. Findings from the study, which sought to calculate the real costs of direct distribution, should incentivize independent and smaller hotel groups to pursue more direct bookings

Key takeaways

  • The analysis found that hotels saw 36% of their online booking revenue from direct channels when they implemented digital marketing campaigns, such as keyword purchases and presence on metasearch;
  • The report concluded the cost of ad-driven bookings is decreasing, in part due to decreasing costs per click, a global increase in the average rate for hotel rooms and the effect of Google’s free booking links;
  • The average cost for direct distribution was pegged at 3.3% of gross bookings, far lower than average commission costs on OTAs.

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