In the digital age, selling hotel rooms has never been "easier". With just a few clicks, a hotel in Ha Long, Phu Quoc, or Da Nang can appear before millions of customers worldwide through OTA platforms like Booking.com, Agoda, or Expedia. Geographical barriers, marketing challenges, and brand recognition issues that once existed have been virtually "erased" by the power of technology and the digital distribution ecosystem. For many hotels, especially independent ones, OTAs are not just a sales channel but also the fastest "gateway" to market access. However, this very "ease" conceals a structural paradox. While revenue may grow and occupancy rates may improve in the short term, this often comes at the cost of gradually diminishing control over customers, data, and profit margins – core factors determining a hotel's sustainable development. When room sales become overly dependent on a third party, the hotel no longer truly "owns" the customer journey but merely participates in an ecosystem led by an intermediary platform.

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Market figures clearly reflect this trend. According to Skift Research (2025), over 72% of global upscale hotel room revenue now comes from online distribution channels, with OTAs accounting for the largest share. In the Asia-Pacific region, STR Global (2025) reports that OTAs contribute 45% to 65% of total bookings for the upscale and luxury segments. Notably, in Vietnam – a rapidly growing market with a limited direct distribution ecosystem – many independent hotels see OTA booking rates as high as 70–80% during low season, according to a Savills Hotels (2025) report. This means that a significant portion of hotel revenue is flowing through a channel they do not fully control. In this context, the question is no longer "should we use OTAs or not," but rather "how can we use OTAs without becoming dependent." This is precisely why the article "DECODING HOTEL PLACE STRATEGY – PART 1: Over-reliance on OTA channels" was created. This article will dissect one of the biggest "bottlenecks" in current distribution strategy – where OTAs, from being an effective room sales tool, are gradually becoming a sophisticated "growth trap" that many hotels inadvertently fall into without proper control and rebalancing strategies.

Current Situation: When OTAs hold the customer "gateway"

It is undeniable that OTAs hold a central, even pivotal, position in the global hotel distribution ecosystem. As consumer behaviour shifts strongly towards the digital environment, platforms such as Booking.com, Agoda, and Expedia not only act as room sales channels but also become the starting and ending points of the booking journey. According to a Phocuswright report (2025), over 52% of total online booking revenue globally is currently made through OTAs. In the Asia-Pacific region – where the digitisation of travel is happening fastest – this proportion is even higher, ranging from 60% to 65%, according to STR Global (2025). Notably, this trend shows no signs of slowing down. A McKinsey report (2025) indicates that between 2022 and 2025, OTAs were the fastest-growing channel in the entire travel distribution system, with a compound annual growth rate (CAGR) exceeding 10% in Asia. This highlights a clear reality: OTAs are not only capturing a large market share but also continuing to expand their "sphere of influence" within the hotel industry's value chain.

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In Vietnam, the level of dependence on OTAs is even more pronounced, especially in the 4–5 star hotel segment and independent hotels. According to data from Savills Hotels (2025) and international operational management units, the proportion of bookings from OTAs at many hotels can reach 65–75% during the low season – when the pressure to fill rooms is greatest. Even during peak season, when market demand is high, OTAs still account for about 40–50% of total bookings. Some resort markets such as Phu Quoc, Nha Trang, or Da Nang even record higher levels of dependence due to the specific characteristics of international guests and short-term booking behaviour. The "dominance" of OTAs stems not only from their ability to connect with millions of global customers but also from their superior advantages in technology and marketing. According to Booking Holdings' financial report (2025), the group spends over 6 billion USD annually on marketing activities – an almost unimaginable figure for any single hotel. As a result, OTAs consistently occupy the top positions on search engines, while optimising the user experience down to every detail, from interface and speed to the payment process. Simultaneously, consumer behaviour is also "leaning" towards intermediary platforms. According to Google Travel Insights (2024), over 70% of travellers begin their hotel search journey on online platforms, and most of them will complete their booking directly on an OTA instead of visiting the hotel's official website. A report by Expedia Group (2025) also shows that nearly 80% of users appreciate the ability to compare prices, read reviews, and book quickly on the same platform – factors that OTAs excel at.

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All of this is leading to a structural shift: OTAs are no longer merely a sales channel but have become the primary "gateway" bringing guests to hotels. When customers begin their journey on an OTA, compare on an OTA, and complete their transaction on an OTA, the hotel's role in the value chain gradually shrinks to that of a "service provider." And when the most important "gateway" is outside of one's control, the problem is no longer just about revenue or occupancy. It's about power in the value chain: whoever owns customer data controls consumer behaviour; whoever controls the first touchpoint largely determines the final choice. In this context, excessive reliance on OTAs is not just an operational issue but has become a strategic challenge for the entire hotel industry.

Why are hotels increasingly "addicted" to OTAs?

To understand why dependence on OTAs is becoming increasingly common – and difficult to "escape" – we need to look at the issue at a deeper level: it is not a random choice, but the result of many systemic factors, from technology and marketing to the hotel's actual operational pressures. First and foremost, OTAs hold an almost absolute advantage in traffic – a core element in any digital distribution strategy. According to data from SimilarWeb (2025), platforms like Booking.com and Expedia consistently rank among the travel websites with the highest traffic globally, with hundreds of millions of visits each month. Booking.com alone records over 500 million visits/month worldwide, becoming one of the "default destinations" for tourists seeking accommodation. Meanwhile, most independent hotel websites – especially in developing markets like Vietnam – are almost invisible in search results, or if they appear, they are in very low positions. According to Ahrefs (2025), over 80% of hotel-related search traffic is "dominated" by OTAs and intermediary platforms, rendering hotel websites "invisible" in the customer's decision-making journey.

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Secondly, the gap in digital marketing capabilities between OTAs and hotels is a decisive factor. Developing an effective digital marketing strategy – including SEO, Google Ads, social media optimisation, remarketing, and conversion rate optimisation (CRO) – requires not only a substantial budget but also a highly skilled team with practical experience. According to a Statista report (2025), Booking Holdings spends over $6 billion annually on marketing, while Expedia Group maintains a marketing budget exceeding $5 billion. This creates an "insurmountable gap" for most hotels, especially independent or mid-sized properties. In this context, OTAs become the "fastest route" – where everything from traffic and visibility to conversions is already optimised, making it an easy choice for hotels rather than building internal capabilities. Thirdly, technology remains a significant barrier, particularly in markets where the digital transformation of the hospitality industry is still in its early stages. Many hotels have not adequately invested in core systems such as UX/UI-optimised websites, booking engines, CRM (Customer Relationship Management), or CDP (Customer Data Platform). This often results in a direct booking experience that is significantly inferior to OTAs: unfriendly interfaces, multi-step booking processes, lack of price transparency, and limited payment methods. According to Google Travel Insights (2024), the average conversion rate on hotel websites in Southeast Asia is only about 2–3%, while OTAs can achieve 6–8% due to continuous optimisation based on user data. A Deloitte report (2025) also shows that over 55% of customers abandon hotel websites without completing a booking due to an unconvincing experience.

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Finally – and this is a "psychological operational" factor – there is the occupancy pressure. In the hotel industry, a room not sold today is revenue lost forever. This leads many hotels to prioritise solutions that deliver immediate results, and OTAs – with their ability to generate bookings quickly – become an almost obvious choice. According to STR Global (2025), in highly seasonal markets like Southeast Asia, reliance on OTAs often increases sharply during off-peak seasons when hotels need to secure cash flow and maintain minimum occupancy. However, this "trade-off" inadvertently creates a difficult-to-escape cycle: the more hotels rely on OTAs to fill rooms, the less they invest in direct channels; the less effective direct channels they have, the more they must return to OTAs to maintain revenue. Over time, this cycle not only erodes profit margins but also weakens the hotel's core competitive capabilities. When hotels no longer control their customer base, data, and distribution channels, they gradually shift from being "proactive sellers" to "passive dependents" within the very ecosystem they participate in. This is the profound nature of the problem – and why restructuring the distribution channel strategy is no longer an incremental option, but a vital requirement.

Consequences: When hotels lose their "soft power"

If not strategically identified and controlled, reliance on OTAs will not stop at distribution costs but will gradually spread into structural consequences, directly affecting the operational efficiency, competitiveness, and brand value of hotels in the long term.

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First and foremost, the most obvious impact is the erosion of profitability – but this is not merely a cost figure; it represents a comprehensive decline in financial performance. With average commissions ranging from 15% to 25%, according to Expedia Group (2025), OTAs are directly "cutting" into room revenue – the hotel's core income stream. When additional costs such as promotional programmes, discounts to improve visibility rankings, or fees for participating in OTA marketing packages are included, the total actual distribution cost can reach 25–30% of the booking value. According to Deloitte (2025), hotels with OTA revenue accounting for over 60% of their total revenue typically report 8–12% lower Gross Operating Profit (GOP) margins compared to hotels with a better-balanced channel strategy. This means that while occupancy rates may be high and revenue appears to be growing, the "quality of profit" is silently deteriorating. Beyond financial implications, a deeper strategic consequence is the gradual loss of customer data ownership – the most critical asset in the digital age. When bookings are made through OTAs, most of the customer's behavioural data, search history, comparisons, and decision-making information reside within the intermediary platform's system. Hotels only receive basic, "transactional" information rather than "customer insights." According to McKinsey (2025), businesses capable of effectively leveraging customer data can increase revenue by 10–15% through personalised experiences. Conversely, without data, hotels are virtually "information blind," unable to effectively implement CRM, loyalty, or upsell strategies – key factors for increasing Customer Lifetime Value.

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Another aspect often overlooked, yet with long-term implications, is brand risk. In today's booking journey, customers often access, compare, and make decisions directly on OTAs. This inadvertently makes OTAs the "primary brand" in customers' minds, while the hotel merely serves as an option on a list. According to Phocuswright's 2025 study, over 65% of travellers do not accurately recall the name of the hotel they stayed at, but vividly remember the platform they used to book it. When a brand is "eclipsed" within the very experience journey, hotels will struggle to build loyalty and differentiate themselves in the market – especially in the 4–5 star segment, where experience and brand are core elements. Ultimately, reliance on OTAs leads to hotels gradually losing proactive control over pricing and sales strategies. Policies such as rate parity (uniform pricing across all channels), mandatory promotional programmes to improve display rankings, and internal competition mechanisms between hotels on the same platform put hotels in a passive position. In many cases, to maintain visibility or ensure a stable volume of bookings, hotels are forced into "price wars," eroding brand value and driving average prices below optimal levels. According to STR Global (2025), in highly competitive markets, the average daily rate (ADR) on OTAs can be 10–15% lower than direct selling prices without a strict control strategy. The sum of these factors highlights a noteworthy reality: reliance on OTAs is not just a short-term operational issue, but a long-term strategic challenge. As profits are eroded, data is fragmented, brands are overshadowed, and pricing control is limited, hotels gradually lose the most crucial "levers" for sustainable growth. And without timely adjustments, the future cost will not only be financial but also competitive positioning in the market.

Solution: Escaping the "OTA Trap" with a comprehensive Place strategy

Solving the problem of OTA dependence does not mean "turning our backs" on OTAs. In fact, OTAs remain an important channel for market expansion and ensuring a stable flow of guests. The core issue is not whether to use OTAs, but how hotels redefine the role of OTAs within their overall distribution strategy. From being a "primary" channel, OTAs need to be redefined as a "growth support" channel – part of a balanced, controlled, and long-term oriented distribution ecosystem. This is precisely the philosophy NewSun Hospitality pursues: not elimination, but restructuring. Not cutting back, but optimising. First and foremost, the foundation of all change lies in rebuilding the direct channel – a "territory" many hotels are neglecting. A website should not merely "exist," but must truly become an effective sales tool: SEO-optimised to attract organic traffic, integrated with a modern booking engine to maximise conversion, user-friendly interface to enhance user experience, and compelling content to retain customers. According to Google Travel Insights (2024), improving the website experience can increase conversion rates by up to 30%. Through comprehensive business and marketing strategy consulting packages, NewSun Hospitality assists hotels in rebuilding their entire direct sales platform – from content strategy and digital advertising to optimising the customer journey.

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In parallel, technology is no longer a "nice-to-have" but has become a "must-have." The synchronous implementation of systems such as Channel Manager, CRS, or CRM/CDP helps hotels not only manage channels effectively but also master data – a decisive factor in modern competition. When room rates, inventory, and customer information are updated in real-time across the entire system, hotels not only minimise operational errors but also gain the ability to make quick, accurate decisions. NewSun acts as a comprehensive consulting and implementation partner, helping hotels design a synchronous operating system, thereby reducing reliance on intermediary platforms. However, technology is merely a tool. What makes the difference lies in strategy and operational execution. One important direction is to implement a "direct booking push" strategy in a systematic and methodical way. This goes beyond simply offering better prices; it includes building loyalty programmes, designing unique offers for each segment, and personalising the experience at every touchpoint. According to Deloitte (2025), hotels that effectively implement this strategy can increase their direct booking share by 10–20% within just 12–18 months. NewSun not only provides strategic support but also participates in training and restructuring sales & marketing teams, helping hotels enhance their internal capabilities – a key factor in reducing external dependence.

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More importantly, NewSun's approach goes beyond merely "increasing direct bookings" as a standalone objective. The broader goal is to build a balanced distribution ecosystem – where OTAs, direct channels, and intermediary partners are strategically coordinated rather than competing against each other. In this model, each channel has a clear role: OTAs help expand market reach and attract new customers; direct channels optimise profitability and build customer relationships; and intermediary partners such as travel agents (TAs) and MICE (Meetings, Incentives, Conferences, and Exhibitions) ensure stable and long-term customer sources. When channels are "positioned correctly," hotels not only increase revenue but also significantly improve profit quality, data control, and brand value. And that is precisely the ultimate goal of an effective Place strategy: not just to sell more rooms, but to sell them smarter and more sustainably.

Conclusion

OTAs are not the "enemy" – but they cannot be the sole "saviour" either. In an increasingly competitive market, over-reliance on OTAs is akin to handing over control of revenue, data, and customers to a third party. The challenge for 2026 is no longer "how many rooms can be sold," but "through which channels are rooms sold and who controls that journey." And only when hotels master their Place strategy can they truly master long-term growth. If you are facing the challenge of OTA dependence and wish to build a sustainable distribution ecosystem, NewSun Hospitality's team of experts is ready to accompany you on your journey to restructure your strategy and optimise revenue.

References

  • Skift Research (2025). Global Hotel Distribution Outlook Report
  • STR Global (2025). Hotel Distribution & Performance Report
  • Phocuswright (2025). The State of OTA vs Direct Booking
  • Deloitte (2025). Hospitality Industry Outlook Asia-Pacific
  • Google Travel Insights (2024). Travel Conversion Benchmarks Southeast Asia
  • Savills Hotels (2025). Vietnam Hotel Market Report
  • Expedia Group (2025). Traveler Value Index Report
  • SimilarWeb (2025). Top Travel Websites Traffic Analysis