By 2030, direct digital bookings are predicted to surpass online travel agencies (OTAs) as the dominant distribution channel for hoteliers, generating over $400 billion in global hotel gross bookings. While OTAs currently account for the largest share of hotel gross bookings, the trend is shifting towards direct digital channels, which are generally more profitable for hoteliers and allow them to retain valuable consumer data.
According to a proprietary Skift Research survey, the ideal contribution from indirect channels, including OTAs and travel agents, would be 34% of a hotel’s distribution mix. This is down from 53% in 2024, indicating a shift towards more direct bookings. Hoteliers aim to increase digital direct bookings while reducing OTA distribution, as well as increasing non-digital direct bookings and decreasing wholesale distribution. Traditional travel agents may also see a slight decrease in their share of the distribution mix.
The ideal distribution channel mix is similar for both branded chains and independent hotels, emphasizing the importance of a combination of direct and indirect distribution. Independent hotels express a desire for more digital direct bookings, while brands seek more offline direct group bookings. Interestingly, independent hotels are also more reliant on OTA distribution compared to branded chains, suggesting different strategies for each type of property.
The rise of experiential travel is shaping the hotel distribution landscape, with a focus on personalized experiences and differentiation. The battle for market share is no longer just about selling hotel rooms; loyalty programs, experiences, and personalization are becoming essential differentiators. The complex environment of changing traveler preferences, supplier responses, and new forms of distribution require hoteliers to adapt their strategies to stay competitive.
This report provides a detailed analysis of the distribution channel mix from 2017 to 2024, with projections for 2030, as well as insights into the level of satisfaction with current distribution strategies and an analysis of the ideal distribution mix. It also delves into the role of third-party channels, differences in distribution strategies between branded chains and independent hotels, costs and commissions for each channel, the impact of loyalty programs, the drivers of direct bookings, and the challenges of third-party distribution. Overall, it offers valuable insights for hotel industry decision-makers navigating the evolving distribution landscape.
