Hotels cut OTA reliance as Booking.com faces legal heat

This week’s hospitality news underscores a power shift in distribution. Hotels are ramping up direct sales while Booking.com faces mounting legal and competitive pressure. At the same time, U.S. hotels confront weakening RevPAR, and new strategies around multi-sourcing, data, and digital discovery continue to reshape how hoteliers think about revenue management.

Hotels and OTAs shifting dynamics amid evolving strategies 

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Hotels are reporting a significant recent drop-off in sales from online travel agencies (OTAs), especially Booking.com, as they pursue more direct selling methods. The strained relationship is further highlighted by a lawsuit from 10,000 hotels against Booking.com over EU competition law breaches. Direct sales are being propelled by advanced platforms and new strategies, with hotels reporting increases in direct bookings while reducing reliance on OTAs.

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Phocuswright Research points to a projected increase in direct channel gross bookings from €32.5 billion in 2025 to €41.3 billion in 2028, while OTA bookings are also set to grow, albeit at a slower rate. Despite a rise in bookings through Expedia, hotels are focusing on turning OTA-initiated guests into loyal customers. Meanwhile, OTAs like Booking.com and Expedia are diversifying offerings to include areas such as activities and the "connected trip" concept to adapt to shifting market conditions.

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Changes in customer behavior, regulatory factors under the Digital Markets Act, and expansion in "alternative accommodation" supply significantly impact OTA hotel sales. The ongoing dialogue illustrates the broader industry challenges, while OTAs and hotels develop strategies to stay competitive. Industry experts note the strengthened performance of other sales channels compared to Booking.com, with a market shift observable especially in Europe due to evolving demand dynamics.

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This shift creates opportunities for hotels to take back control over pricing. By steering more bookings through their own platforms, hotels can design exclusive offers, bundle packages with F&B or spa access, and experiment with loyalty-based discounts that OTAs often strip away. That translates directly into stronger ADRs and healthier margins.

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The lawsuit itself could trigger bigger changes. If Booking.com is forced to amend practices under EU law, hotels may gain more freedom to set rates and manage visibility across channels. Combined with OTA diversification into tours and activities, this signals a more fragmented distribution ecosystem where hotels that invest in brand.com strategies stand to benefit most.

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Hotels should focus now on strengthening direct booking infrastructure: modern websites, loyalty programs, CRM-driven personalization, and staff training that converts OTA-originated guests into repeat direct customers. Those investments will pay off as reliance on high-commission channels continues to decline.

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U.S. hotel industry grapples with declining RevPAR amidst business travel slowdown

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The U.S. hotel industry is facing persistent challenges as the revenue per available room (RevPAR) continues to drop, largely due to stalled business travel and diminishing demand in economy hotels. For the week ending August 16, 2025, national RevPAR fell by 0.5%, heavily influenced by year-over-year declines in Houston, accounting for 5 basis points of the national decrease.

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The decline in weekday occupancy, especially across the Top 25 Markets (T25), has further exacerbated this trend, affecting the week's performance negatively. While weekend leisure travel remains stable, it has not compensated for the weekday downturns, leading to a 0.9% reduction in RevPAR despite a modest increase in the average daily rate (ADR).

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The T25 Markets have seen a 2% overall weekly RevPAR decrease, driven predominantly by occupancy declines. Contrastingly, non-T25 metro and rural areas posted slight gains, with rural areas experiencing the most significant weekly growth.

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This decline in demand has particularly impacted economy hotels, where RevPAR and occupancy reductions were acute in markets such as Houston and Las Vegas. Globally, RevPAR outside the U.S. rose by 4.2%, with Canada spearheading growth with a consistent 8.3% increase in RevPAR.

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However, U.S. hotels face looming pressures as leisure travel is expected to wane with the onset of the school year, and business travel is not forecasted to bridge the gap. Future performance will likely continue to be affected by historically difficult comparisons, including those resulting from past hurricanes.

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For revenue managers, the key takeaway is segmentation. With weekday corporate demand still soft, hotels may need to strengthen group, event, or local corporate business. Rural markets’ resilience also shows that diversifying beyond major metros could be a profitable hedge.

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Independent hotels capitalize on first-party data for growth

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In the rapidly evolving hotel industry, the shift from third-party to first-party data is becoming crucial due to changes in data privacy laws and the declining use of third-party cookies. By harnessing first-party data, which is directly obtained through guest interactions such as bookings and surveys, independent hotels can enhance personalized marketing, drive guest loyalty, and increase profitability.

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This data is more accurate and valuable, helping hoteliers reduce costs while improving engagement. Effective use of first-party data through CRM and email marketing allows hotels to personalize communications, automate guest journeys, and create targeted campaigns that turn one-time visitors into loyal guests.

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As OTAs continue to take a significant portion of revenue through high commissions, hotels that leverage their first-party data can take back control, leading to higher profit margins and direct guest relationships. Independent hotels are encouraged to optimize their marketing strategies now to stay competitive and secure long-term growth.

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For smaller properties, this shift is a game-changer. Building simple but effective CRM strategies, loyalty databases, and guest lifecycle campaigns can help independent hotels compete against OTA scale, while driving higher-margin direct bookings.

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Digital tools drive destination decisions: insights from Phocuswright research

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Recent research by Phocuswright highlights the powerful yet variable influence of digital tools in shaping travelers' destination choices, with online travel agencies (OTAs), search engines, and review platforms leading the charge. The data reveals that while these platforms are crucial across the U.S. and Europe, their impact can vary dramatically depending on regional, generational, and geographical factors.

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In the U.S., for instance, general search engines are predominant, yet regions like the Northeast rely heavily on review sites, whereas the West employs a mix of OTAs and Google Maps for a more exploratory approach.

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Generational differences also play a significant role, with Millennials and younger travelers being far more influenced by digital means compared to Gen X and older, who rely less on online resources. For brands, success hinges on a tailored approach that aligns with these nuanced behaviors, requiring precise channel and content strategy to effectively engage diverse traveler groups.

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For hotels, this means refining marketing spend. Properties targeting younger travelers should double down on visibility across review sites, OTAs, and Google Maps. For older demographics, strong reputation management and loyalty-building efforts may carry more weight.

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Otamiser is the world leader in OTA optimization, Otamiser helps hotels across Europe, the U.S., and Asia improve OTA rankings and revenue through data-driven pricing and local market insights.

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