Call them secondary online travel agencies (OTAs), non-major OTAs, fourth-party channels—whatever the label—they have one thing in common: They’re a headache for many hotels that are increasingly seeing their rates being undercut across the internet.
Hotels have many channels to choose from when selling their rooms online. Originally, the focus was through major OTAs, such as Expedia and Booking.com, then hotels were encouraged to focus on direct sales, made possible via better software.
Recently there’s been a “channel shift” back to the OTAs and other digital sources. But the problem is hotels are starting to lose control of their rates. In many cases, they are undercut on so-called secondary OTAs (meaning those aside from Expedia
and Booking.com).
“Obviously, hotels still want their customers to book direct, but I sense a feeling people are drifting more back to the OTAs. Maybe they don't like the work they're putting into their own brand,” said Steve Collins, vice president of digital marketing
at SHR Group. “It suits some hotels, and it doesn't suit others."
Overexposed
Independent upmarket hotels, and those in smaller chains in competitive, urban locations, are more at risk. They can’t rely on Hilton or Accor marketing to sell rooms or their own brand power for direct bookings. So, in some cases, they work with wholesalers
and bed banks.
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These rates are increasingly being shown lower prices than hotels’ own rates by “non-major OTAs”—that’s the term used in the monthly World Parity Reports from 123Compare.me, which analyzes the evolution of price parity in the global hotel industry.
Its May 2025 report points out independent hotels are more exposed to price aggressiveness from non-major OTAs.
“Independent hotels or those in smaller chains face greater OTA price pressure when their rates are positioned above the average for their market,” the report reads. “This increased aggressiveness is especially apparent among smaller OTAs, underscoring
the need for closer monitoring of these intermediaries, as price disparity tends to intensify in high-price contexts.”
More than rate leakage
Unauthorized distribution isn’t necessarily a new phenomenon. But these secondary OTAs are multiplying.
“It feels like there's one popping up every single day,” said Collins. “They’re pulling rates from somewhere—God knows where.”
The issue is also on the radar of Joe Pettigrew, group chief commercial officer at L+R
Hotels, which has a hotel portfolio of more than 22,000 rooms.
“There are some OTA partners who will distribute your rates to the small OTAs,” he said, adding that the onus is then on the hotels to bring the issue up with their OTA partners.
“Affiliate marketers are good at popping up all these kinds of blogs to just generate traffic with an affiliate link, to collect commissions. There are large scale affiliate marketing companies that do that really well,” he said.
Unauthorized distribution isn’t necessarily a new phenomenon. Last year Peter Kern, then CEO Expedia Group, spoke out about wholesale rates being misused online at the Americas Lodging Investment Summit.
Like Kern, Mohamed Al Kaddouri, reservations and revenue support manager at ReviseHub Hospitality Solutions, also sees this as a growing problem.
“Many of these platforms pull inventory through wholesaler reselling or via loosely managed affiliate programs, then undercut on price, often without the hotel’s knowledge,” he said.
Last month, Booking.com terminated its affiliate partnerships with a number of bloggers and content creators. Meanwhile, hotels that allow OTAs to undercut their rates pay nearly 50% more for pay-per-click (PPC) leads, according to SHR’s Digital Strategy Secrets for Hospitality report published in January.
Many of these platforms pull inventory through wholesaler reselling or via loosely managed affiliate programs, then undercut on price, often without the hotel’s knowledge.
Mohamed Al Kaddouri, ReviseHub Hospitality Solutions
“It’s both unfair and counterproductive,” Al Kaddouri said. “When hotels invest in direct channels, whether through SEO, PPC, or member incentives, they often see their cost-per-click soar or get undercut on OTAs. It’s a closed loop that punishes independence.”
Closed
off
To make matters worse, another development where hotels may discover prices lower than their own comes in the form of OTA member rates. Expedia, for example, has come under fire for its One Key program.
Jeff Low, CEO and founder of Stash Hotel Rewards, suggested in
a LinkedIn post that this program “now consistently undercuts” hotels' Best Available Rates, “rendering traditional rate parity irrelevant.”
PhocusWire contacted Expedia for comment.
A spokesperson for Booking.com told PhocusWire: “It is important to highlight that our partners set their own prices, and so while Booking.com offers a wide range of tools and data-driven insights to help our partners optimize their pricing strategies,
the final decision on pricing and any additional fees rests with the accommodation providers themselves.
“We focus on balancing the interests of our accommodation partners and our customers, exploring ways to help deliver demand to our partners, while providing cost savings and additional benefits to customers. On some occasions, for instance, we offer customers
the option to book discounted rates on our platform, where Booking.com covers the discount amount but still guarantees that accommodation partners get paid the original full price they have chosen to list on our platform.”
Looking
for solutions
So, what can a hotel do if it wants to increase its B2B sales, for example, without having to turn to B2B distribution partners?
L+R’s Pettigrew said hotels need to work with travel management companies or local corporates, as well as factor in group
bookings and even engage with destination management companies.
And if a hotel can reach a tipping point with direct bookings, it should be able to take back control, according to Al Kaddouri.
It's making sure that if you have a member rate, it is a much better offer than the official or OTA rate.
Steve Collins, SHR Group
“Once a hotel consistently drives around 50% to 60% of bookings directly, it starts to regain control of pricing and guest relationships. But getting there requires sustained investment, typically 5% to 7% of revenue, into digital marketing, CRM tools
and compelling offers,” he said.
“At one 80-key hotel I worked with, shifting even 10% of OTA bookings to direct over six months resulted in a 12% uplift in net RevPAR. It’s not instant, but it’s achievable with the right focus on digital channels and guest targeting.”
If a hotel isn’t doing it already, it should offer its own member rates or advanced purchase rates.
“It's making sure that if you have a member rate, it is a much better offer than the official or OTA rate,” said SHR’s Collins. ”We have member rates that we build into our booking engines.”
Meanwhile, a new foundation has been set up by Brian Reeves, founder of Avvio, to “counter OTA dominance.” He recently launched Roomangel, whose mission is to “remove intermediaries, their persuasion and commission
bias—giving customers a better, fairer search and booking experience.”
Reeves warns of “brand jacking and mirror marketing,” where OTAs will mimic a hotel website.
“What you'll find is that anyone can set up as an affiliate,” he said.
Window
to the world
Ultimately, hotels can bypass a lot of issues with exceptional service and ensuring guests leave reviews. For Resident
Hotels, the OTAs remain a valuable distribution partner.
“Whilst our direct bookings account for around 50% of our total bookings, we also recognize that the OTAs are part of our window to the world, alongside our website,” said David Orr, CEO of Resident
Hotels.
“We also recognize that our high reputation on OTA and TripAdvisor and Google environments are a key aspect of guest research. So, working with OTAs in a mutually respectful way is aligned with our values as much as it’s aligned with our business
interests, which is how it should be.”