Independent hotels need a chance to compete
Each year hotels pay more than $50 billion to OTAs like Expedia and Bookings, which control 90 percent of the online hotel marketplace
According to Morning Consult research commissioned by the American Hotel and Lodging Association, hotel bookings make up 15 percent of all U.S. e-commerce, with over 500 bookings occurring every minute. This is an extremely lucrative business model and generates billions of dollars for Online Travel Agencies (OTAs) every year.
Key takeaways
- While research shows that booking directly with a hotel equals higher customer satisfaction, the ubiquity of these OTA sites and the aggressive online marketing means that number is likely to only get higher;
- As those sites grow, and hotels book less of their own bookings, hotels start losing negotiation leverage. This puts OTAs in an extremely powerful position to extract more and more from hotels;
- The segmented nature of the hotel industry provides a strategic advantage for OTAs, making it harder for independent hotels to push back against OTA pricing.
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