Direct Bookings Surge as Hotels Reevaluate OTA Partnerships

Hotels are increasingly moving away from online travel agencies like Booking.com, driven by legal challenges and a strategic shift towards direct bookings.

The hospitality industry is witnessing a significant shift in its relationship with online travel agencies (OTAs), particularly Booking.com. A growing number of hotels are reporting a decline in sales through these platforms, choosing instead to bolster their direct sales channels. This trend is particularly pronounced in Europe, where Booking.com faces a lawsuit from 10,000 hotels over parity clauses that breached EU competition law.

Legal Challenges and Industry Trends

The legal landscape in Europe has become a critical factor in the changing dynamics between hotels and Booking.com. The lawsuit involving 10,000 hotels has highlighted the contentious nature of parity clauses, which have been deemed to violate EU competition laws. This legal challenge has not only strained relationships but also encouraged hotels to explore alternative distribution strategies.

Direct Selling Initiatives

Hotels have been making concerted efforts to increase direct bookings, leveraging sophisticated platforms to enhance their marketing capabilities. According to a survey of 700 hotel brands, OTAs now generate only 22% of bookings, down from 30% the previous year. This shift is partly attributed to hotels reducing their distribution teams and focusing more on marketing efforts. The State of the Distribution Report 2025, published by RateGain, New York University, and HEDNA, underscores this trend.

Market Observations

Industry experts have noted a consistent decline in bookings through OTAs, with direct bookings showing an upward trend. Thibault Catala, CEO of Catala Consulting, reported that direct bookings in Europe have increased by 8%-15% year-on-year, while bookings through Booking.com have decreased by 5-12 percentage points. Conversely, some markets have experienced a significant increase in sales through Expedia, with growth rates reaching up to 300%.

Alternative Accommodation and Market Dynamics

The rise of alternative accommodations, such as vacation rentals, is another factor impacting OTA sales. In the U.S., vacation rentals have maintained a revenue advantage over traditional hotels, as indicated by Key Data’s Q2 U.S. Vacation Rental Index. This trend reflects a shift in consumer preferences towards leisure-led, flexible travel options, often in domestic and outdoor destinations.

OTA Strategies and Diversification

OTAs like Booking.com and Expedia are diversifying their offerings to adapt to changing market conditions. Booking.com has expanded its global accommodation supply to include over 8.4 million listings in alternative stays. Additionally, the company is focusing on the concept of a “connected trip,” where customers book multiple travel services through a single platform. Expedia is also exploring growth opportunities in the activities sector, aiming to enhance the overall travel experience for customers.

Impact of Regulatory Changes

The Digital Markets Act (DMA) has influenced Booking.com’s operations in Europe. The company’s pricing behavior has shifted, with a decrease in instances where Booking.com offers lower prices than hotels’ direct channels. This change is attributed to regulatory pressures and a strategic response from hoteliers aimed at strengthening their direct sales channels.

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