The hotel industry is undergoing a profound restructuring in how it manages distribution channels, collects data, and prioritizes technology investments. This is clearly reflected in the second annual State of Distribution report, recently released by the Hotel Electronic Distribution Network Association (HEDNA), in partnership with NYU and RateGain.
The report, based on data from more than 21,000 hotels in 310 cities and 700 brands, reveals profound shifts in booking behaviors, the internal operations of hotel organizations, and ongoing technology gaps.
Bookings: Direct and OTA share 42%
Direct online bookings via brand.com websites and bookings via OTAs (e.g. Booking, Expedia) share the same share: 21% each. Distribution via GDS also reaches 20%, while bookings via walk-ins and group bookings follow with 19%. Direct telephone bookings cover the remaining 18%.
The increase in direct bookings seems to come from improvements to brand sites, the strengthening of meta-search engines, and the development of loyalty programs. However, at the same time, hoteliers are reducing the sizes of distribution teams, giving more resources to marketing teams. This suggests a strategic shift: fewer distribution technicians, more investment in strengthening the direct relationship with the customer.
The Achilles heel of direct bookings
Despite the ambition to increase direct bookings, around 66% of hotels rely on external social media and PR agencies to build their image, while 57% turn to digital marketing companies. This reflects a general lack of in-house expertise in key areas such as targeted online visibility, the use of customer data, and strategic placement on digital channels.
The demand for “understanding deficit”
Indicative of the situation is that distribution teams spend more than two working days a week on manual reporting, time that is deprived of more strategic initiatives. The problem is most acute for independent hotels, where 80% say they are unable to monitor changes in demand in real time. While the largest brands have enterprise-level tools and contracts, they say they do not have a deep understanding of customer intent. Integrating systems and gathering actionable insights remain challenges, especially for mid-sized chains that often lack well-integrated platforms.
Limited investment in technology despite challenges
Despite increasing complexity, less than 20% of hotels say they are willing to invest in technology right away. Instead, there is a clear trend to consolidate existing systems in an effort to reduce duplicate costs, data breaches, and the need for repeated billing audits.
In the area of ??revenue management, the problems are exacerbated by data incompatibility between different technology providers. 82% of large chains report insufficient visibility into data from marketing campaigns, while 76% report difficulty evaluating new distribution channels. Mid-sized players (89%) suffer the most from a lack of data, due to limited human resources for analysis.
Even when data is available, leveraging it remains a challenge. 53% of independent hotels admit they lack the analytical capacity to interpret it and act strategically.
AI and innovation on the sidelines
AI and other innovative tools are not high on the investment agenda. Most hoteliers prioritize simplifying and consolidating existing solutions to gain better control over data, reduce operational costs, and enhance security.
- The second annual State of Distribution report highlights that the hotel industry is at a crossroads: with increasing demands in terms of channels, data, and customer behavior, but with limited appetite for investment in innovation. The coming months will show whether hoteliers can bridge this gap between ambition and capability, or whether the gap will widen further.
