Hotels to Pay Middlemen $75 Billion in 2023: Skift Research
Photo Caption: To undercut the notion that online travel agents offer the best room rates, Hilton ran a global campaign, starting in 2016, called “Stop Clicking Around," that was created by the agency The Dots. Source: The Dots.
Skift Take
Hotel companies pay billions a year to online travel agencies and other distributors. Our estimate of how much is eye-opening. So is hoteliers' naiveté about how sustainable their level of spending is.
How much will hotel companies pay OTAs (online travel agencies) and similar third-party distributors this year? That was the thought-provoking question raised on Thursday by Max Starkov in a LinkedIn post.
"In 2023, hoteliers will pay the top OTAs and bed banks $50 billion in commissions and markups," Starkov wrote. "A staggering amount!"
The post went viral among distribution nerds. Putting a figure on third-party distribution underscored its importance.
We'll highlight some points that many hoteliers misunderstand about distribution in a moment.
But first, is this $50 billion figure plausible?
Estimating Hotel Distribution CostsStarkov — a consultant in New York who formerly ran a digital agency since merged with Cendyn — based his estimate on an "amalgamation of publicly available data for the publicly traded companies and investor presentations for the private ones."
Skift Research thinks Starkov's estimate l
