In recent months, major brands like Hilton Worldwide, Marriott International, and Hyatt Hotels have begun offering reduced rates on their direct channels to encourage direct booking and loyalty memberships. This direct booking surge has made some, namely OTAs like Expedia, question how valuable direct channels truly are for owners. However, Kalibri Labs, a big data firm, confirms from its own research that direct bookings are significantly more profitable than OTA bookings. In fact, profitability can be up to as much as 18 percent better through direct booking than OTAs. And that’s before considering the cost of acquiring guests decreases over time using direct channels, while OTA commissions remain steady or could rise. Kalibri Labs also discovered that the presumed “billboard effect” benefit that OTAs claim to have is actually a myth: There is only a 7 percent likelihood that a consumer will visit an OTA and then return to brand.com to book. To read more, click here.
