Hotels Focus on Direct Bookings, Struggle with Data

The Hotel Electronic Distribution Network Association (HEDNA), New York University (NYU), and RateGain have released the second annual State of Distribution report for 2025, offering insights into how hoteliers are managing booking channels, data challenges, and technology investments. Drawing on survey responses from over 21,000 properties representing 700+ brands across 310 cities, the report highlights both progress and persistent roadblocks in hotel distribution strategies.

According to the findings, direct online bookings and online travel agency (OTA) reservations each account for 21% of hotel bookings, followed closely by global distribution systems (20%), walk-ins and group bookings (19%), and direct calls to the hotel (18%). The uptick in direct online bookings is credited to enhanced brand.com platforms, stronger metasearch connectivity, and loyalty program growth.

Despite this momentum, hotel distribution teams are shrinking, while marketing and sales departments are expanding. Olena Ciftci, clinical assistant professor at NYU’s Tisch Center of Hospitality, suggested this shift may be driven by a desire to grow direct bookings. However, many hotels are outsourcing marketing due to internal skill gaps, with 66% relying on PR and social media agencies and 57% using digital marketing agencies to boost direct booking performance.

A lack of internal marketing and data expertise remains a major obstacle. “They generally stated that they cannot drive the direct online booking by themselves,” Ciftci noted, describing the issue as widespread across all hotel types. The report further found that distribution leaders—regardless of hotel size—struggle to track real-time demand signals and understand emerging channels. While large chains face challenges with tracking traveler intent even with enterprise tools, midsize chains lack integration capability, and independent hotels are overwhelmed by complexity.

Manual reporting continues to drain resources, with four out of five hotels spending up to two days per week compiling data. Distribution and marketing teams are often left piecing together insights from disparate sources, as most reporting platforms are designed for revenue management rather than distribution. This insight gap slows decision-making and limits strategy.

While AI could potentially address many of these inefficiencies, it remains a low investment priority across the board. Instead, hotel tech budgets are shifting toward unifying systems and strengthening data governance. “Hotels still have problems with integration and optimization of existing technology,” Ciftci said, adding that organizing and securing data is a necessary precursor to implementing AI tools effectively.

Revenue management also faces critical data challenges. Large chains are hindered by poor vendor insights and limited visibility into demand streams from marketing. Midsize hotels struggle even more with fragmented data and lack internal resources to manage it. Although independent hotels report fewer issues with data accuracy, more than half say they lack the expertise to analyze it effectively.

The report paints a picture of an industry aiming to modernize through better systems and smarter strategies but still bogged down by fragmented tools, labor-intensive processes, and a cautious approach to emerging technologies like AI. As distribution continues to evolve, hotels will need to invest not only in technology but also in skills, integration, and cross-functional coordination to remain competitive.

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Hotels Focus on Direct Bookings, Struggle with Data

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