Hotels are reporting a significant recent drop-off in sales from online travel agencies (OTAs), particularly Booking.com, after “leaning” away from them in recent years, alongside other broader industry trends.
The relationship with Booking.com has especially soured in Europe as the embattled OTA faces a lawsuit from 10,000 hotels seeking compensation after its parity clauses
were found to have breached EU competition law.
That number could rise following the extension of a deadline to join the collective action.
Direct selling drive
Hotels have of course been making strides in boosting direct sales thanks to the emergence of
sophisticated platforms. But in the past year, many are noticing a significant decline from the OTAs, including Expedia and Booking.com.
A survey of 700 hotel brands found that OTAs generate 22% of bookings, down from 30% the previous year. And 63% of hotels have reduced their distribution teams in favor of marketing. The findings were part of report from The State of the Distribution Report 2025, published by RateGain, New York University and the Hotel Electronic Distribution Network Association (HEDNA).
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“One of the reasons behind the decline
in bookings through major channels like OTAs can be attributed to the efforts hoteliers are making to strengthen their marketing teams,” said Fritz Müller, head of Europe at RateGain.
Phocuswright Research revealed in its Europe Travel Market Report 2025 that hotel gross bookings from the direct channel would increase from €32.5 billion in 2025 to €41.3 billion in 2028 while gross bookings for the online travel agency channel will increase from €43.1 billion to almost €49 billion in the same period.
One revenue specialist believes the Booking.com drop is not just seasonal, but consistent across multiple months and market types.
“From what we are seeing across our hotels in Europe, direct bookings are up roughly 8%-15% year on year, while Booking.com is down five to 12 percentage points,” said Thibault Catala, founder and CEO of Catala
Consulting.
Conversely, sales through Expedia had risen by up to 300% in some markets.
Posting a poll on LinkedIn, Catala quizzed peers on whether they saw a similar decline, with 45% responding
that they had seen a noticeable drop, and 26% reporting a slight decrease.
“The result of the poll does not surprise me,” said Kathrin Swadzba, founder of Swadzba
Hospitality Consulting in Germany. She pinpoints a stronger performance from direct channels or other channels that hoteliers are intentionally driving to diversify the channel mix.
But she also said hoteliers were seeing a decline due to supply growth on the Booking.com platform, whether that be alternative accommodation or simply more hotels in a market.
“This will also go some way in explaining why individual hotels are seeing declines from Booking.com specifically when other channels are stable,” she said.
Catala added hotels were increasingly experimenting with different channels, tactics and strategies to offset the shortfall in Booking.com bookings.
“For some hotels, that has meant leaning harder into metasearch and paid search; for others, building stronger loyalty offers, refining direct booking funnels or adjusting OTA availability in peak periods,” he said.
Expanding supply, tougher markets
The growth in “alternative accommodation” supply is proving another contributing factor to dips in OTA sales for hotels, particularly in the U.S., and explains how OTAs are overall reporting relatively healthy results.
Vacation rentals maintained a revenue per available room advantage over hotels in every U.S. region in the second quarter of 2025, according to Key Data’s Q2 U.S. Vacation Rental Index, which is based on 13 million listings.
“Hotels are contending with slower recovery in key segments such as corporate, group, government and international travel, which is likely contributing to the performance gap,” said Melanie Brown, vice president of data and analytics at Key Data.
“Vacation rentals are tapping into a different demand base, driven by leisure-led, flexible trips from domestic travelers, often in drive-to and outdoor destinations. This difference in demand mix is a key reason why vacation rentals are holding their
ground more effectively.”
Hotels are contending with slower recovery in key segments such as corporate, group, government and international travel, which is likely contributing to the performance gap.
Melanie Brown, Key Data
OTAs are clearly capitalizing on this. In the second quarter of 2025, Booking.com reported total room nights booked grew by 8%, with gross bookings up 13%. Its global accommodation supply now spans over
8.4 million listings in alternative stays, such as vacation rentals, apartments and non-hotels—which is up 8% on 2024—alongside 30 million hotel rooms.
And compared to the first quarter of 2024, alternative accommodation room nights sold increased by a low double-digits percentage, outpacing the company’s growth in traditional hotels.
Expedia reported booked room nights went up by 7% in the second quarter this year, compared to the equivalent 2024 quarter, while vacation rental room nights grew roughly in line with the
market.
However, global apartment operator Cheval
Collection uses OTAs only as a means to acquire new customers.
“OTAs are in the minority when it comes to share of bookings,” said CCO Nick Pilbeam. “We use them as a customer acquisition tool, with the goal of converting these guests into regular customers.”
Klaus Kohlmayr, chief evangelist and development officer at IDeaS, thinks hotels have now successfully reclaimed control of their demand.
“The growth in Booking.com’s alternative accommodation listings isn’t just diversification, it’s a strategic response to hotels doubling down on direct channels,” he said.
Diversification strategies
On the topic of diversification, OTAs are making notable progress and focusing on other lines of business besides lodging.
For Booking.com, the dream of the “connected trip” edges closer.
“We reached a milestone with connected trip transactions, where customers choose to book more than one travel vertical with us, representing a low double-digit share of Booking.com’s total transactions and up over 30% year over year,” Booking Holdings CEO Glenn Fogel said
recently.
Expedia has its eyes on the activities sector too.
“As people go on trips, they want to have an activity often. So, we think about how we use activities as a way to attach to the full trip. Now, it's a growing business for us. We talk a lot about it as a team of where are the areas we do want to double
down,” said Expedia Group CEO Ariane Gorin during a call discussing the OTA’s first-quarter 2025 results.
The gatekeeper effect
Another area for the perceived drop-off in Booking.com’s presence in Europe could be linked to its designation as a “gatekeeper” under the Digital Markets
Act (DMA) by the European Commission in May last year.
“In EU countries, Booking’s pricing behavior shows a clear shift following the enforcement of the DMA,” said Jordi Serra, CEO and co-founder of pricing tool 123Compare.me, recipient of last year’s
PhocusWire EMEA Travel Innovation Award.
Between October 2023 and July 2025, the percentage of cases where Booking appears with a lower price than the hotel’s direct channel dropped from 19.3 % to 12.6 %, 123Comapre.me's World Parity Monitor found.
“This trend suggests a gradual adjustment in Booking’s strategy, likely influenced by the new regulatory framework and stronger institutional oversight,” Serra said.
In EU countries, Booking’s pricing behavior shows a clear shift following the enforcement of the DMA.
Jordi Serra, 123Compare.me
“Outside the EU, Booking’s pricing pressure remains high and steady:
The percentage of times it undercuts the hotel’s direct price stays close to 21%. This highlights how progress in price integrity across the EU is being driven not only by regulation but also by stronger, more deliberate strategies from hoteliers
themselves,” Serra said.
However, while the DMA may be one factor, customer booking behavior plays a key role, Amsterdam-based revenue director Dave Overeem van Elferen said.
“While questions arise about Europe-specific trends related to the DMA regulations, I don't believe compliance is the primary factor. The decline appears more fundamentally driven by increased traveler caution and price sensitivity.”
Overall, the discussion around Booking.com's decline across European markets reflects broader industry challenges hotels are experiencing in the Amsterdam region, he said.
“We are observing an overall decrease in travel demand, which naturally impacts Booking.com, alongside other distribution channels, especially as Booking.com is one of the biggest OTAs in our market. However, I don't believe this represents a fundamental
structural decline specific to Booking.com,” he said.
“What we're witnessing is market contraction, where reduced demand must be distributed across existing booking channels, creating intensified competition for a smaller market share.”
A spokesperson for Booking.com told PhocusWire: “We’ve continued to see demand for travel with bookings up across a range of verticals on our platform.
“Partnering with hotels and alternative accommodations enables us to meet our goal of offering travelers the widest choice possible so they can experience the world in the way that they want. Stays combined with other travel, flights, car rental, is part
of our vision for the connected trip, where customers can seamlessly travel to experience the world.
“We are actively investing in AI advanced capabilities, accelerating our ability to meet the evolving needs of travelers and partners. During the (second) quarter, we continued to see developments that are allowing us to better inform travelers by creating
more personalized and responsive experiences. In turn, this is supporting growth in bookings across a range of verticals on the Booking.com platform.”