The Real Price of Rate Disparity: How OTA Undercutting is Inflating Your Advertising Costs
🏨 In a study tracking over 27 million CPC impressions, hotels allowing OTAs to undercut direct rates paid 47% more per click for their own brand name. Rate parity strategies still resulted in a nearly 36% CPC increase. This competitive bidding drives up marketing costs and diverts funds from other guest services. OTAs are not the villain; they help fill rooms and offer broad exposure. However, the key for hotels is to maintain rate integrity, ensuring the best prices on their own websites and fostering direct guest relationships. Industry trends indicate by 2030, direct bookings may surpass OTA reservations, highlighting the importance of prioritizing direct rate attractiveness for future business sustainability.
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