If you’ve been working in the hospitality industry for any time, I’m sure you’ve experienced the huge shifts and changes in the way that hotels operate, in how consumers select where to travel and stay, and how they prefer to book their hotel.
Staying on top of these changes can feel exhausting but, never fear, I’m here to update you on three key booking trends that hotels need to know today to make the operational (and technology) updates necessary to attract more guests, increase bookings and revenue and improve guests’ overall booking experience in 2025.
So, let’s get started…
TREND #1: The hard work that hotels have done to drive more direct traffic is starting to pay off (but the work is not done yet!)
For years, hotels have been working to direct more traffic and bookings via the direct channels but, due to the huge marketing budgets, innovative features and cost-saving loyalty programs offered by the OTAs, travelers have been slow to make the shift.
While the OTAs are still coming out on top, the tide is beginning to shift, signaling good news for hotels’ bottom lines in the future…
According to Skift Research’s Hotel Distribution Outlook 2024, “by 2030, direct digital channels will surpass OTAs as the primary booking source for hotels, generating $409 billion in gross bookings, compared to $333 billion from OTAs.”
While this is a development that is just starting to take shape, it demonstrates a shifting preference among travelers for booking direct, likely because of the hard work that hotels have done in improving their direct rates, offering more personalized experiences, providing additional value and the development of loyalty programs that add even more value for repeat guests.
Hoteliers that don’t prioritize improving their direct booking channels will lose valuable business to savvy hoteliers who have already updated their revenue and reservation management strategies accordingly.
What can you do today to boost your direct bookings?
First, hotels must use a CRS with a built-in booking engine to offer the best booking experience to guests, while optimizing their reservation management and front-office operations. To encourage guests to book directly, hotels should offer value-added services, such as free breakfast, discounts on on-site amenities, free airport transfers or room upgrades.
Obviously, your website and booking engine needs to offer a frictionless booking experience, both on desktop and mobile, but that’s no longer enough. Integrated AI chatbots on your website can enable better customer service by automating the process of answering repetitive questions, making it possible for your staff to do more, with less.
Create a loyalty program that will provide exclusive incentives to members to encourage repeat customers and consider upselling pre-stay options, room upgrades, etc., thereby creating a new revenue stream.
Finally, retargeting previous guests (or those who visited your website previously) with social media ads and emails can also dramatically increase conversion rates and maximize the revenue earned via your direct channel.
TREND #2: Guests are looking for more flexibility in booking and payment terms
Immediately after the pandemic, last-minute bookings were at an all-time high but, today, hotels are experiencing a guest preference towards a longer booking window, averaging guests booking 32 days in advance. With that increase in advance booking, guests now expect more flexibility in hotels’ cancelation policies to minimize their risk. While offering flexible cancellation terms may feel risky to hoteliers, recent statistics show that it’s a worthwhile risk as “cancellations are now falling below 20%” and, based on an industry report, “more than half of [guests] are willing to pay extra for a hotel that offers free cancellation… [with] nearly 1 in 5 [saying] they’d pay $50 or more.”
In addition to flexibility in cancellation, guests are also looking for flexible payment options that enable booking without paying upfront or which offer price alerts (and the ability to change the reservation) if the price of the hotel room decreases during the cancellation window.
If your property isn’t already offering flexible booking and payment options, you should update your policies across all channels to maximize conversions. Finally, making it easy for guests to modify or cancel their reservation online (if necessary) will go a long way towards encouraging guests to book early, as it will minimize their stress levels.
TREND #3: Modern revenue management strategies for modern guests
Revenue management is becoming more sophisticated every year, especially at the group level where cluster revenue management is being deployed with a few clicks across an entire portfolio of properties, enabling the implementation of brand-wide (rather than property specific) revenue management strategies.
Today’s guests are willing to be brand loyal, if they are offered valuable incentives to do so innovative cluster revenue managers should implement strategies to ensure that brand-specific strategies cultivate loyalty over the long term.
In the luxury and all-inclusive market, we’ve seen a growing trend of membership- or subscription-based travel, in which a guest earns stays at any of a group’s properties by paying a subscription or membership fee, either to get free stays at different locations or to receive a discount on all hotel bookings. For example, Accor implemented a subscription program in 2023, called Accor Plus, which gives members discounts of up to 50% on dining and hotel stays (with one free stay per year) at more than 1,000 participating Accor properties (under their various brand names) in 20 countries around the world.
If properly marketed and promoted, the subscription- or membership-based revenue model could prove very valuable for hotels because it incentivizes repeat guests (the guests who spend the most during their stay) and frequent travelers to fill rooms, especially valuable if implemented during slower travel periods.
Also, groups can leverage a brand-level revenue management strategy by offering portfolio-wide packages to loyalty members to book within a hotel group rather than switching to competitors’ properties when they visit a new destination.
Today, the guest booking journey is constantly evolving and hotels must evolve along with the trends to stay competitive. Hotels that don’t prioritize innovating to match guests’ changing needs, risk losing bookings and revenue to more savvy competitors.
So, is your property’s direct booking channel ready to welcome today’s modern guests?
