Can Direct-Booking Campaigns End Up With Both Sides Declaring Victory?
Photo Credit: While Hilton is imploring customers to "Stop Clicking Around," a theme of its advertising campaigns, perhaps there is an upside for the online travel agencies in this conflict, as well. Hilton Worldwide
Skift Take
Direct booking is not really a war where one side must lose. Both the large hotel chains and online travel agencies could wind up better off if they act rationally on pricing.
Shifting hotel bookings to their own websites is clearly a positive for the large hotel chains, but online travel agencies could actually come out ahead, as well.
For the online travel agencies, much of the volume that moves to hotels' own channels will be replaced by smaller chains and independents. The commission rates from those entities are likely meaningfully higher than those paid by the mega brands in the U.S. If volume is shifted rather than lost, the online travel agencies should benefit from higher commissions and improved margins on each transaction.
The worst-case scenario for the online travel agencies would be a broad shift in consumer behavior where direct booking becomes the norm for all hotels. Given the online travel agencies' vast inventory and huge marketing budgets, the most likely result is a gradual increase in direct booking for the large chains and some smaller ones riding the direct booking campaign coattails. The majority of volume would simply shift be
