Stay informed with free updates
Simply sign up to the Travel & leisure industry myFT Digest — delivered directly to your inbox.
Major hotel groups are intensifying efforts to get customers to book directly, as they seek to save on commissions paid to online platforms and prepare for the rise of artificial intelligence “agents”.
Marriott, the world’s largest hotel company, last month said its Bonvoy loyalty programme, which registers all customers who do not use intermediaries, had almost 260mn members by the end of September, up 18 per cent from a year earlier.
Rivals such as Hilton, Hyatt and Wyndham Hotels & Resorts have also boosted direct bookings by using technology and more attractive perks. Hilton has made it easier for customers to reach elite loyalty status and agreed partnerships, including with MSC Cruises’ luxury division Explora Journeys, that enable members to spend points outside its portfolio.
Operators have long complained about the fees imposed by online travel agents (OTAs) such as Expedia and Booking.com, which typically take a cut of between 15 per cent and 25 per cent, and see the push for direct sales as crucial to taking fuller advantage of the arrival 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 could also divert business away from the big brands by making customers less conscious of brand recognition.
“Generative AI is shifting travel planning from traditional search into more conversational and agent-led environments. So that makes building relationships [with customers] a bit more strategic and important,” said Chema Basterrechea, chief operations officer at Radisson Hotel Group.
Boosting direct bookings could help Radisson capture more guest data and offer “a much more personalised experience” that encourages repeat business, Basterrechea said.
Marriott’s chief financial officer Leeny Oberg said at a conference this month that bookings made through AI channels “could potentially be cheaper than the OTAs”.
Hotel groups have long worked with online travel agents because they provide access to incremental business, but hope that more robust ties with customers will reduce the share of bookings done through them.
“You don’t want to rely on Booking and Expedia: they’re expensive channels and they’re extremely hard to defend your position on,” said Bernstein analyst Richard Clarke.
Hilton’s efforts to lure more direct bookings include offering access to a £650 football-themed suite, decorated with boots and memorabilia, at its hotel at the official training ground for England’s national teams. Guests can even get a training session with a qualified coach.
Geoff Ballotti, chief executive of Wyndham, said that tools like ChatGPT and Gemini presented “a unique opportunity for us to continue to reduce our dependency on OTAs”. The company’s own AI tools were already “driving 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 programmes that sought to promote more direct bookings.
“You’re just one click away from going to another way to do your booking, so you’ve got to always be providing better service because people like [Marriott] Bonvoy and people like Hilton Honors are very powerful.”
But Expedia’s chief commercial officer Greg Schulze said there was “space for all of us” in the $3tn travel industry and argued that his company’s technology platforms added “complementary value”, especially for smaller operators that are not part of the big chains.
