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Major hotel groups are stepping up efforts to nudge customers to book direct, as they look to save commissions paid to online platforms and prepare for the rise of artificial intelligence “agents”.
Marriott, the world’s largest hotel company, said last month that its Bonvoy loyalty program, which registers all customers without using intermediaries, had about 260 million members at the end of September, up 18 percent from a year earlier.
Rivals such as Hilton, Hyatt and Wyndham Hotels & Resorts have also boosted direct bookings using technology and more attractive features. Hilton has made it easier for customers to access exclusive loyalty statuses and agreed partnerships, including Explora Journeys, the luxury division of MSC Cruises, which enables members to spend points outside its portfolio.
Operators have long complained about the fees charged by online travel agents (OTAs) such as Expedia and Booking.com, which typically take a cut of between 15 percent and 25 percent, and see the pressure for direct sales as significant to take full advantage of the advent of advanced AI.
AI “agents” – autonomous bots capable of arranging travel for users – could provide hotel groups a cheaper alternative to online travel agents. But they can also drive business away from big brands by making customers less conscious of brand identity.
Chema Bastorrecchia, chief operating officer of Radisson Hotel Group, said, “Generative AI is shifting travel planning from traditional search to a more conversational and agent-led environment. This makes building relationships (with customers) a little more strategic and important.”
Bastarcchia said boosting direct bookings could help Radisson get more guest data and provide a “much more personalized experience” that encourages repeat business.
Marriott Chief Financial Officer Lynne Oberg said at a conference this month that bookings made through AI channels “could potentially be cheaper than OTAs.”
Hotel groups have long worked with online travel agents because they provide access to incremental business, but expect stronger relationships with customers to reduce the share of bookings made through them.
“You don’t want to rely on Booking and Expedia: They’re expensive channels and it’s extremely difficult to defend your position on them,” said Bernstein analyst Richard Clark.
Hilton’s efforts to attract more direct bookings include offering access to a £650 football-themed suite at its hotel at the official training grounds for the England national teams, decorated with shoes and memorabilia. Guests can also receive training sessions with a qualified instructor.
Geoff Ballotti, Windham’s chief executive, said tools like ChatGPT and Gemini present “a unique opportunity for us to reduce our reliance on OTAs.” The company’s own AI tools are already “fostering more direct bookings,” he added.
Glenn Fogel, chief executive of Booking Holdings, which owns Priceline and Booking.com, said OTAs were “absolutely” in competition with hotels’ in-house loyalty programs, which wanted to promote more direct bookings.
“You’re just one click away from going the other way to make your booking, so you always have to provide better service because people like (Marriott) Bonvoy and Hilton Honors are so powerful.”
But Expedia Chief Commercial Officer Greg Schultz said there is “room for all of us” in the $3 trillion travel industry and argued that his company’s technology platforms add “complementary value,” especially for smaller operators that are not part of larger chains.
