How to Increase Direct Hotel Bookings: 13 Strategies

Not all hotel bookings are considered equal. When a guest finalizes a reservation through an online travel agency (OTA), the hotel must pay substantial commission fees to these third-party intermediaries, reducing the revenue it would have captured if the reservation had been made through the hotel itself.

OTAs are, without a doubt, an important distribution channel for hotels, but direct bookings offer them significant advantages—beyond improving their top and bottom lines. This article outlines 13 strategies hoteliers can use to persuade travelers to book directly with them.

What Are Hotel Direct Bookings?

Direct hotel bookings are reservations that guests make with a hotel itself, typically through the establishment’s website or call center. The alternative for consumers is to book room stays through OTAs such as Hotels.com, Tripadvisor, or Booking.com, which charge the hotels commissions and “own” the customer relationship, including the data they collect from each transaction.

Key Takeaways

• Hotels are working hard to secure more direct bookings, rather than having to pay OTA commission fees.
• The benefits of direct booking include higher revenue, better control over pricing, and the ability to deal directly with consumers in order to improve their experience.
• Most travelers prefer to book their trips entirely online, so it’s important for hotels to optimize their websites and simplify the booking process.
• Real-time inventory management systems reduce the risk of hotels under- or overbooking rooms.

Hotel Direct Bookings Explained

The hotel industry is thriving, forecast to boost revenues by $62.4 billion between 2024 and 2028, to reach a new high of $508 billion in 2028, according to Statista. More than a third of customers book their rooms directly with hotels, typically on their websites.

However, four out of five travelers visit an OTA at some point before making a travel reservation, often to research locations, reviews, amenities, and rates, according to a 2023 study by Expedia Group and Luth Research. When they do reserve rooms on these outside sites, hotels can lose between 15% and 30% of the revenue in commission charges they must pay to these third-party intermediaries.

In the United States and some other countries, hotels are required to align their room rates with those of OTAs and other sales channels, through a practice called hotel rate parity. However, in an effort to maximize their earnings, hotels have been making a concerted effort to steer customers to their own websites by advertising guaranteed lowest prices (where rate parity isn’t a requirement) as well as by offering other perks, such as same-day cancellations, free early check-ins, and complimentary access to spas.

Direct bookings also help hotels gather valuable customer data and foster stronger relationships with their guests, enabling them to meet specific customer needs and boost guest satisfaction rates. This gives hotels the opportunity to attract more repeat visits and establish a community of loyal followers likely to advocate for the brand to friends and family members.

Direct Booking vs. OTA Booking

Third-party travel websites emerged in the late 1990s, disrupting the hotel booking model by offering consumers a convenient way to compare hotel rates and book stays —in some cases, at lower prices than customers could secure by reserving rooms with the establishments themselves.

In recent years, these third-party OTAs have ramped up their investments in digital marketing in an effort to gain greater control over putting people in hotel beds. In 2023, about 62% of hotel reservations were booked indirectly, a 1 percentage point increase over 2022, whereas direct bookings accounted for only 38% of reservations, a 1 percentage point drop compared to the year before, according to an analysis of more than 50 million room nights at more than 2,000 international hotels. While that 1-point shift toward OTAs may not seem like much, it represents 7.8 million reservations worldwide that moved away from direct booking. Plus, OTAs are booking guests for longer stays.

Clearly, hotels have their work cut out for them. While it may not be realistic for hotels to rely on direct bookings alone to sustain their businesses, they can aim for a better balance between direct and third-party bookings.

Benefits of Increasing Direct Bookings

Hotels have a love-hate relationship with OTAs. On the one hand, OTAs provide hotels with a powerful marketing channel, increasing their visibility to a vast audience of potential guests and helping them fill vacant rooms. On the other hand, OTAs take a cut of the hotel’s revenue and gain access to customer data they can analyze for marketing and loyalty-building purposes.

Given the following advantages of direct bookings, it’s in a hotel’s best interest to make the effort to woo customers to their websites and lock in as many direct reservations as possible.

• Cost savings on commissions: When an OTA accepts a booking on behalf of a hotel, it charges the hotel a commission that can run anywhere from 15% to 30%. Because those fees can add up quickly on multiple room reservations, direct bookings can save budget-conscious hotel businesses a significant amount of money over time.
• Enhanced customer relationships: A hotel that books its own guests can engage directly with customers. For example, it can build anticipation for the stay by sending “countdown to the visit” messages that provide useful information before a visitor’s arrival, such as check-in timing, parking details, directions, and a list of available amenities. A resort might also offer paid upgrades, such as breakfast, a round of golf, and spa packages, to enhance a guest’s stay. And if a customer has a special request or a problem arises, the hotel can more swiftly resolve issues without relying on a third party to intervene on its behalf. Direct contact also allows for better post-stay engagement to nurture the customer relationship. For example, hotels can send personalized follow-up messages, invitations for feedback, and discounts on future visits.
• Better control over pricing and inventory: By using modern property management software systems to assist with reservations, hotels can gain greater control over their pricing and inventory, which facilitates smoother accounting processes. Establishments can implement dynamic pricing, for instance, adjusting rates in near real time based on a variety of factors, such as seasonal shifts in demand and changes in competitor pricing. In addition, real-time inventory management systems help hotels get a better handle on room availability, reducing the costly risk of either underbooking or overbooking. Hotels can also strategically manage their inventory to balance occupancy rates more effectively, for instance, by holding back a certain number of rooms for direct bookers or offering last-minute deals to loyal customers to fill unsold rooms.
• Improved customer data and insights: Direct bookings provide hotels with a treasure trove of valuable customer data and insights, such as contact information and booking preferences, paving the way for targeted marketing strategies. For instance, a hotel might learn prior to a stay that a couple is celebrating a wedding anniversary and prepare a gift basket of snacks upon their arrival. Or a resort might discover that a family of five always books a room with an ocean view and tailor future offers to that preference. Inviting customers to fill out post-stay surveys can provide important insights, allowing hotels to make data-driven decisions that better meet customer needs. If customers are complaining that the wait to check in is too long, a hotel might consider hiring additional front-desk staff and adopting new software to speed up the check-in process.
• Enhanced brand recognition and trust: OTAs won’t necessarily include the photos, videos, or detailed descriptions about the property that the brand would like its customers to see, whereas when guests book directly through a hotel’s website or mobile app, the hotel has full control over its online visual presentation. This lets the company showcase its major selling points, such as its ideal location in a major city or its spacious suites, multiple swimming pools, or on-site dining options, any or all of which can solidify brand recognition and allegiance. Direct booking also allows guests to access more detailed information about the hotel’s policies, amenities, and services, as well as its brand story and values, providing an extra level of transparency that helps instill customer trust.
• Revenue management: Direct bookings allow hotels to more easily manage their revenue, providing opportunities to dynamically adjust rates in real time to maximize profits during periods of high demand or to extend sales to customers during slower seasons to fill vacancies. Sophisticated revenue management systems can analyze reams of data, including historical booking patterns, competitors’ prices, and market trends, enabling hotels to more accurately forecast demand and take advantage of optimal pricing strategies to boost overall revenue.
• Improved customer experience: With access to a customer’s contact information and preferences at the time of booking, hotels can go out of their way to enhance the customer experience. For example, a luxury hotel might send a personalized email a week before a stay to suggest that a family make dining reservations in advance. Or an independent hotel might inform a business traveler that a room is equipped with a comfortable workspace and extra power outlets. Hotels can offer preferential treatment to direct bookers, such as complimentary room upgrades, late check-out options, and a free drink at the bar. After the stay, hotels can maintain a direct line of communication with guests and offer targeted promotions for future visits. For example, a boutique hotel might notice that a guest expressed interest in a local wine tour during a stay, so the hotel could send a follow-up email featuring exclusive wine-tasting packages to encourage repeat business. This personalized engagement can spur customers to spread the word about their amazing experiences, which can multiply bookings.

13 Strategies to Increase Direct Bookings

Hotel owners have a variety of strategies at their disposal to increase their share of direct bookings and reduce their reliance on third-party OTAs. Here are 13.

1. Optimize the Hotel Website

Many travelers perform an extensive amount of online research before finalizing their plans. In fact, on average, travelers spend five-plus hours exploring travel content, and US tourists, in particular, view a whopping 277 travel-related web pages in the 45 days before booking a trip, according to Expedia and Luth Research. With that in mind, hotels can make the online experience pain-free for customers in several ways:

• Hotels should optimize their websites for search engines to improve organic visibility. Websites should also have lightning-fast page load speeds, both on PCs and mobile, to allow for a smooth user experience.
• The online booking process needs to be simple and quick, requiring minimal steps to complete a reservation.
• Hotels should prominently highlight special offers and promotions, including exclusive direct-booking deals, on their home pages. The same goes for clear calls-to-action that encourage visitors to simply click a button to “book now.”
• Hotels can include high-quality photos and video property tours that show rooms and amenities, explore activities in the local area, and indicate exactly where the establishment is located in relation to restaurants, shops, and other attractions.
• Establishments should offer live chat support to quickly assist with potential guests’ questions and concerns.
• The hotel website should spotlight its loyalty programs and provide incentives for email signups, such as a discounted rate.

2. Implement a Commission-Free Booking Engine

In order to schedule visitors directly, hotels need their own booking engine that accepts direct reservations from guests. A hotel will want to ensure that the solution seamlessly integrates with its existing website and tracks pertinent performance metrics, such as conversion rates and booking trends. Other desirable features might include secure payment processing capabilities and the ability to customize the booking engine to match the hotel’s branding.

3. Leverage Digital Marketing

Hotels can take advantage of several digital marketing tactics to enhance their online presence. For example, they can run targeted pay-per-click advertising campaigns, using relevant keywords and compelling ad copy to drive traffic to their websites. They can also create and share content, including blog posts and videos that highlight the hotel’s specific offerings. For instance, a beachy hotel might offer a live webcam from an oceanfront spot, providing a bird’s-eye view that gives guests a glimpse of white sand and blue surf to entice them to hit the “book” button. Also, email marketing is a tried-and-true form of digital marketing, allowing hotels to send promotions directly to guests’ inboxes to encourage them to book. On the more sophisticated end of the tech spectrum, hotels can tap into virtual reality technology, offering immersive 360-degree tours of their properties to allow potential guests to explore properties online before booking.

Hotels will want to maintain an active presence on social media as well, including Facebook and Instagram, where they can share visually appealing content, run targeted ads to promote special packages available through direct booking, and respond to comments and questions from potential guests. Hotels can also invite satisfied guests to leave reviews on sites like TripAdvisor or Yelp and respond professionally to both positive and negative feedback.

4. Utilize Various Rate Plans and Add-Ons

For many travelers, finding the best rate is paramount, so hotels that don’t have a hotel rate parity agreement in place may want to consider offering exclusive discounted rates available to customers who book directly through the hotel’s website or phone lines—and provide a guarantee that guests are getting the best available rate by offering to match or beat less-expensive prices found on other sites. Hotels can also offer a range of rate plans, such as deeply discounted advance purchase rates, refundable rooms, and discounts for longer stays. In addition, hotels should consider offering add-ons such as airport car services and spa treatments.

5. Focus on Content and Experience

Customers will clamor for hotels that provide engaging content on their websites and social media channels. For example, a resort in Hawaii might position itself as a local expert by creating a series of blog posts discussing little-known scenic spots to visit and other insider tips to make the trip enjoyable. Content marketing is a related approach used to help build brand awareness and convert prospects into customers in a non-promotional way—for example, by posting tips for traveling abroad or how to budget for travel. Guests also want to know that they’ll have fun when they step outside of their lodging sites, so it’s important for hotels to provide information about nearby restaurants, amusement parks, shops, museums, and other attractions.

6. Build and Engage with a Customer Database

Gaining access to customer data is critical for hotels, as it enables them to target guests based on their booking history, stay preferences, and demographics, using personalized messages that encourage subsequent bookings. A customer database also fuels effective loyalty programs with individualized rewards and incentives that nudge people to return to the hotel—because, after all, attracting repeat customers has been shown to be much more cost-effective than attempting to acquire new ones. In addition, a customer database provides key insights into booking patterns, so hotels can make strategic decisions about pricing, promotions, and marketing strategies to drive future sales.

7. Create a Sense of Urgency

Offering limited-time sales can urge people to finalize their travel plans immediately. Hotels might display a countdown timer on the website or email showing that an offer will expire in a certain number of hours. Scarcity marketing techniques also drive urgency, such as noting that “only two rooms are left” at a certain rate or advertising that “the first 20 bookings will receive complimentary passes to the resort’s waterpark.” If a visitor is about to leave the hotel website without booking, the property can deliver a special pop-up discount code that expires within a few hours to encourage the person to book then and there.

8. Enhance Customer Loyalty

Hotels can foster customer loyalty in a variety of ways, such as by sending personalized emails on a customer’s birthday or anniversary, along with exclusive discounts. As mentioned previously, it’s also important to create a robust loyalty program that rewards repeat direct bookings, such as points that can be redeemed for free hotel nights, room upgrades, or other perks. Another nice touch to enhance customer loyalty: Hotel managers can recognize loyal guests when they arrive at a property with welcoming gifts or personalized notes and greetings.

9. Encourage and Manage Reviews

A series of negative customer reviews will turn off potential guests, so it’s important for hotel managers to encourage satisfied visitors to post positive reviews and also to respond promptly to any negative feedback. Hotels can train front-desk staff to ask guests about their stay at checkout, perhaps even offering incentives, such as discounts on a future stay or entry into a prize drawing, for agreeing to leave reviews on sites like Yelp. Hotel managers should monitor reviews regularly, setting up automated alerts across different platforms. If a guest had a bad experience, managers should show empathy, apologize for any problems, and, if possible, offer a way to rectify the situation. They can also use customer feedback to identify areas for improvement within their hotel operations.

10. Participate in Events and Trade Shows

Hospitality events and trade shows provide hotels with important networking opportunities that allow them to interact face to face with travel agents, industry partners, and potential customers to build relationships that can lead to more direct bookings. Hotels also may consider setting up an exhibit at travel expos, food and wine festivals, sports games, art exhibitions, and other community events to showcase their offerings directly to prospective customers. Participating in events and trade shows also keeps hotel owners informed about the latest industry trends and competitors’ strategies, which can help them refine their own direct booking approaches.

11. Offer Value-Added Packages

Hotels can attract more direct bookings with enticing value-added packages, wooing guests with one-of-a-kind experiences that go beyond the standard stay and are not offered by OTAs. For example, a hotel might offer a couple a “romance package” that includes a bottle of chilled champagne, a room with a fireplace, massages in the spa, and a romantic dinner at the hotel’s restaurant. Or a hotel might offer executives attending a business conference spacious rooms with work desks, high-speed Wi-Fi, and access to a business center with printers and audiovisual equipment. Popular packages featured on the hotel website can lead to increased direct booking conversions.

12. Ensure Secure and Easy Booking

A single data breach on a hotel website can cost the company millions of dollars in lost revenue and deter consumers concerned about their privacy from booking future trips directly with the company. To that end, it’s critical that hotels double down on ensuring a secure, seamless, yet simple booking process that integrates with their websites and uses encryption to protect sensitive guest data, such as credit card information. In addition, cloud-based property management systems can help streamline booking operations, allowing hotel staff to manage reservations swiftly and process payments securely.

13. Leverage Social Proof

To sway potential customers to book directly, hotels can leverage social proof, a psychological phenomenon in which people rely on the opinions and actions of others to determine their own behavior. For example, businesses can encourage satisfied guests to post positive reviews or share their experiences on social media; collaborate with influencers in the hospitality industry to post engaging videos about why they chose a specific hotel; create a dedicated web page for guest testimonials; and display hospitality awards the hotel has received prominently on the website.

Support Direct Bookings With NetSuite

Hotels can entice customers to book their reservations directly by leveraging advanced software solutions that ease the booking process, increase transparency, and improve operational efficiencies. NetSuite for Restaurants and Hospitality meets the industry’s changing business needs, providing point-of-sale integration, franchise management, and more. A guest service dashboard lets hotels easily manage, resolve, and track guest inquiries and complaints, with the goal of improving customer satisfaction rates and attracting repeat business.

Faced with substantial commission fees from OTAs, hotels are eager for customers to book directly with them, not only to increase revenue but also to nurture their long-term relationships with guests. By implementing a variety of strategies, such as optimizing their websites, creating a sense of urgency, and offering exclusive discounts, hotels can increase their share of direct bookings and foster long-term loyalty. Modern technology can help with the customer acquisition and retention process, allowing hotels to gather data that enables them to provide a seamless blend of personalized services that may be too appealing for guests to resist.

Hotel Direct Bookings FAQs

How can hotels increase direct bookings?

Hotels can increase direct bookings by providing a seamless online booking process; implementing direct marketing strategies, such as social media ads and personalized email campaigns; and providing exclusive offers for direct bookers, such as discounted rates (where allowed), loyalty rewards, and other perks.

Do hotels prefer it if you book direct?

Yes, hotels strongly prefer that guests book directly with them, rather than through third-party platforms, to avoid paying commission fees to those third parties and to engage directly with guests before, during. and after their stay.

What percentage of hotel bookings are direct?

While the percentage of direct hotel bookings varies by property, a 2023 survey of hoteliers by SHR Group showed that about 38% of bookings were made directly with hotels, the other 62% indirectly.

Why do hotels want direct bookings?

Hotels are intent on obtaining direct bookings to avoid paying commission fees to OTAs, which can range from 15% to 30% of the booking cost. Plus, direct bookings provide hotels with greater access to valuable customer data, allowing them to provide more personalized experiences, instill trust and foster long-term brand loyalty.