A new report by the Hotel Electronic Distribution Network Association (HEDNA), New York University (NYU) and RateGain has revealed that direct bookings and those made through online agencies account for 21% of total bookings.
The State of Distribution report, which helps hoteliers ‘compare changes in the industry across different functions, hotel sizes and property types’, is the result of data collected between December 2024 and March 2025 from more than 21,000 properties representing more than 700 brands across 310 cities.
Twenty per cent came through global distribution systems, with 19% coming from walk-ins and group bookings and 18% through calls directly to the hotel.
According to the report, the direct online bookings can be attributed to brand.com upgrades, metasearch connectivity and loyalty.
Additionally, hotels are expanding marketing and sales teams while distribution teams are contracting.
“Generally, it may be because hotels are focusing on direct bookings, and they hope the marketing department will be more useful in this case,” said Olena Ciftci, clinical assistant professor of hospitality technology at NYU’s Jonathan M. Tisch Centre of Hospitality.
“But what we found is that marketing teams rely on third-party agencies to help them with direct distribution,” she said, noting that approximately 66% of teams are using social media and public relations agencies to increase brand awareness, while 57% are using digital marketing agencies to promote direct online bookings.
According to Ciftci, this is likely occurring because hoteliers lack expertise in how to utilise the new marketing channels.
“They generally stated that they cannot drive the direct online booking by themselves, and it is a problem across all types of hotels.”
The report notes that across sizes, distribution leaders struggle with tracking real-time demand signals and deciphering emerging channels.
Large chains have issues with tracking user intent, even with enterprise contracts, while midsize chains “lack integration muscles” to address the issue, and independents are simply overwhelmed – four out of five said they can’t follow demand shifts.
The report also highlighted the “insight deficit,” with teams still spending full workdays putting together reports, effectively “starving teams of time for strategy.”
“We found that four out of five hotels spend up to two business days a week to create reports manually,” Ciftci said.
“Most reporting platforms focus on revenue management, forcing distribution and marketing teams to stitch data together manually, taking up valuable time in the decision-making process,” the report states.
At the same time, less than 20% of hotels said they’re willing to invest in technology and tools that could assist with this. Tracking traveller intent presents yet another pain point, negatively affecting advertising accuracy, Ciftci said.
In revenue management specifically, the report identified two main issues tied to data, namely disparate vendor data and limited visibility into marketing-driven demand streams.
For larger chains, the issue is scale, as they manage multiple vendors that don’t provide adequate insights (82%), while also struggling with understanding new distribution channels (76%) and existing channels such as travel management companies used by corporate travellers (65%).
Midsize hotels face similar issues with distribution channels and have more issues with data than large chains (89%), “reflecting fewer internal analysts to normalise feeds.”
Accurate data was less of a concern for independents (67%); however, they lack the expertise to analyse it (53%).
The report also revealed that investing in artificial intelligence (AI) tools is the lowest priority for hotels, regardless of size.
Tech budgets are decreasing as large and midsize chains and independent hotels focus on unifying technologies as the highest priority due to duplicate fees, data-breach risk and manual parity checks. Data governance and residency were also at the top of the priority list, Ciftci said.
“We know the industry. Hotels still have problems with integration and optimisation of existing technology, so this is priority number one,” she said.
“I think that because we see data governance and residency go to the top of the [priority] list, it’s a sign that those are getting prepared for AI tools because we cannot bring the AI tools to the operation if our data is not organized, if we don’t have a flow between the different systems.”
