Rising OTA Commissions Push Hotels Toward Direct Bookings

Rising OTA Commissions Push Hotels Toward Direct Bookings

By Manu Vardhan Kannan

Published on March 4, 2025

For years, online travel agencies (OTAs) have dominated the hotel booking industry, controlling pricing, customer data, and charging commissions as high as 40%. However, hotels are now reducing their reliance on OTAs and embracing direct distribution channels to regain control and build stronger guest relationships.

With the rise of new technology, evolving consumer behavior, and regulatory shifts, the hospitality industry is set to redefine its distribution model. The future of hotel bookings lies in a balanced, guest-centric approach that prioritizes direct bookings, personalization, and innovation.

Key Industry Shifts

Healthier Channel Mix

  • Rising OTA commissions have made direct bookings a priority.

  • By 2030, direct digital bookings are expected to surpass OTAs, generating over $400 billion in revenue.

Personalization & Differentiation

  • Travelers are seeking more customized experiences, shifting focus from generic stays to experiential travel.

  • AI and data analytics are enabling hyper-personalized guest journeys and targeted marketing.

  • Loyalty programs are evolving beyond traditional point systems to offer personalized rewards based on guest preferences.

Customer-First Approach

  • OTAs often prioritize hotels that pay higher commissions, which limits true consumer choice.

  • Regulatory measures like the EU’s Digital Markets Act (DMA) are pushing for fairer distribution ecosystems by promoting transparency and competition.

End of Rate Parity Clauses

  • Legal rulings, including the EU Court of Justice decision, now allow hotels to set their own rates.

  • Hotels must invest in direct booking strategies using advanced pricing models and competitive technology.

Rise of Mobile Bookings

  • Over 50% of hotel bookings now come from mobile devices, making mobile-first design a necessity.

  • Previously, only OTAs and major hotel chains leveraged mobile apps, but new disruptive platforms are emerging to bridge this gap.

AI’s Role in Hotel Distribution

  • AI-powered tools such as chatbots, price optimization software, and personalized marketing solutions are driving direct bookings.

  • AI-driven platforms like D3X.ai and Allora.ai are already transforming the industry with intelligent booking systems and automated guest engagement.

The Future of Hotel Distribution

With hotels regaining control over pricing, data, and guest relationships, the industry is moving toward a more transparent, guest-friendly ecosystem. Direct booking strategies, AI-driven personalization, and mobile-first innovations will define the future of hotel distribution, ensuring a more sustainable and competitive marketplace.


ELIVAAS Crosses 620 Villas, Targets Portfolio Expansion in 2026

ELIVAAS Crosses 620 Villas, Targets Portfolio Expansion in 2026

By Manu Vardhan Kannan

Published on February 4, 2026

Luxury villa hospitality platform ELIVAAS has scaled its operational portfolio to approximately 620 villas within two years of launch, positioning itself among the fastest-growing organised players in India’s villa hospitality segment.

Since its inception, ELIVAAS has hosted over 3 lakh guests, with guest volumes growing 2.7 times between December 2023 and December 2025. This growth has been largely driven by increasing demand for group travel, private celebrations, and corporate offsites, as travellers seek exclusive and experience-led accommodation formats.

Despite rapid expansion, ELIVAAS has maintained stable operational performance. Around 95 percent of guest stays have received five-star ratings, reflecting consistency across service delivery, property management, and overall guest experience. The company attributes this performance to a balanced approach towards scaling supply while strengthening operational processes.

image

Commenting on the growth journey, Ritwik Khare, Founder and CEO, ELIVAAS, said, “Scaling supply without compromising operations is the biggest challenge in villa hospitality. For a sustainable business, the three wheels of supply, demand, and guest experience and operations have to scale at the same pace. Guest feedback at this level gives us confidence as we move into the next phase of growth.”

ELIVAAS currently has a strong presence across North and West India, which continue to account for the majority of bookings. Alongside geographical expansion, the platform has focused on enhancing experience-led offerings across its portfolio. Most villas support services such as private chefs, spa treatments, customised décor, live entertainment, and concierge-led experiences, catering to leisure travellers as well as event-led stays.

Looking ahead, ELIVAAS plans to more than double its portfolio to over 1,200 villas in 2026. The expansion will be supported by sustained demand and deeper penetration across key leisure destinations and event-driven markets, reinforcing the brand’s long-term growth strategy in India’s evolving luxury hospitality landscape.


Union Budget 2026 Sparks Mixed Reactions Across Hospitality and Allied Sectors

Union Budget 2026 Sparks Mixed Reactions Across Hospitality and Allied Sectors

By Manu Vardhan Kannan

Published on February 4, 2026

The Union Budget 2026-27 has drawn varied responses from hospitality professionals and industry leaders, reflecting a balance between short-term operational challenges and long-term structural benefits. While the Budget signals continued support for infrastructure and domestic value chains, experts note that certain cost-related measures may impact pricing and margins within the hospitality ecosystem.

Anuj Mittal, Founder of Paprika Park, described the Budget as having a mixed impact on the food and beverage sector. He noted that select duty reductions could support domestic production and processing, while other measures may increase operating costs for eateries and cafes.

image

“Indian Union Budget 2026-27 had a mixed impact on the food & beverage (F&B) sector: some production inputs and processing equipment became cheaper due to duty reductions (e.g., seafood processing inputs and microwave parts), supporting domestic value chains, while costs rose for others most notably commercial LPG for kitchens and imported coffee machines now facing higher duties which could push up prices for cafes and eateries. The Budget also continues to support broader agri-food infrastructure and supply-chain improvements, benefiting long-term F&B competitiveness.”

From a manufacturing and allied industry perspective, Suraj Mehta, Chief Strategy Officer at HNGIL, highlighted the positive implications of tariff rationalisation for India’s glass manufacturing sector, especially in the export market.

image

“This tariff cut from 50% to 18% is a game-changer for India's glass manufacturing sector, particularly for container glass exports to the US, where demand in food & beverage, pharmaceuticals, and cosmetics packaging is robust. It levels the playing field against subsidized imports from other countries like China, potentially increasing our export volumes by 20-30% in the coming years.”

He further added that the move could encourage capacity utilisation, sustainable investments, and job creation across manufacturing hubs, aligning with India’s broader export ambitions.

Taken together, the reactions suggest that while hospitality and allied sectors may face selective cost pressures in the near term, the Union Budget 2026-27 lays the groundwork for long-term competitiveness, stronger supply chains, and global market integration. The coming months will reveal how businesses adapt these policy signals into growth strategies.


Thomas Cook India & SOTC Travel Sign Strategic MoU with Government of Tamil Nadu to Boost Tourism

Thomas Cook India & SOTC Travel Sign Strategic MoU with Government of Tamil Nadu to Boost Tourism

By Manu Vardhan Kannan

Published on February 4, 2026

Thomas Cook (India) Limited, India’s leading omnichannel travel services company, along with its group company SOTC Travel, has signed a strategic long-term Memorandum of Understanding with Guidance, the nodal agency of the Government of Tamil Nadu, and the Directorate of Tourism, Government of Tamil Nadu. The partnership aims to unlock Tamil Nadu’s tourism potential by accelerating visitation, enhancing destination awareness and delivering seamless, enriched travel experiences for Indian travellers.

The MoU was signed on February 2, 2026, at the Tamil Nadu Global Tourism Summit 2026 held in Mahabalipuram. The agreement was formalised by Mr. Abraham Alapatt, President & Group Head – Marketing, Service Quality, Value Added Services & Innovation, Thomas Cook (India) Limited and SOTC Travel; Dr. Darez Ahamed, IAS, Managing Director & CEO, Guidance Tamil Nadu; and Ms. J. Innocent Divya, IAS, Commissioner of Tourism, Government of Tamil Nadu.

image

This strategic collaboration brings together Thomas Cook India and SOTC Travel’s strong pan-India presence and expertise across leisure, MICE, business and B-Leisure travel segments with Tamil Nadu’s diverse tourism offerings. The partnership focuses on co-creating differentiated travel products, integrated marketing campaigns, and targeted consumer activations to drive sustained tourism growth across the State.

Working closely with the Department of Tourism, the collaboration will promote Tamil Nadu’s cultural, spiritual, wellness, nature and experiential tourism offerings through a mix of online and offline initiatives. Guidance Tamil Nadu will act as the nodal agency to ensure effective coordination, stakeholder engagement and alignment with the State’s long-term tourism development and destination branding strategy.

Commenting on the partnership, Mr. Rajeev Kale, President & Country Head, Holidays, MICE, Visa – Thomas Cook (India) Limited, said,

“Tamil Nadu is one of India’s most compelling and culturally rich destinations, offering an exceptional spectrum of experiences, from heritage and spirituality to wellness, nature, cuisine and contemporary urban culture. Through our strategic MOU with the Government of Tamil Nadu, we are delighted to partner in strengthening the State’s tourism proposition for the domestic market. Leveraging our omnichannel reach, powerful customer segments and deep market expertise, we aim to co-create distinctive products, enhance awareness, and drive sustainable visitation across leisure, MICE and business travel segments.”

Mr. SD Nandakumar, President & Country Head – Holidays & Corporate Tours, SOTC Travel, added, “We are pleased to collaborate with the Government of Tamil Nadu to unlock the State’s immense tourism potential. Tamil Nadu’s diverse offerings resonate strongly with evolving Indian traveller preferences—not only from metro markets, but also from Tier 2 and 3 cities. Our partnership will focus on innovative product development, education and training initiatives, and integrated marketing to elevate destination visibility and deliver enriching, experience-led travel for our customers, while creating long-term value for the State’s tourism ecosystem.”

The partnership marks a significant step towards strengthening Tamil Nadu’s position as a preferred domestic travel destination while supporting sustainable tourism growth and long-term economic development.

Stay up-to-date with the latest Hospitality news and trends in the Hospitality industry!

Subscribe to Hospitality news e-magazine for free and never miss an issue.

By clicking subscribe for free you agree to the Terms & Conditions and acknowledge our Privacy Policy.

Advertise With Us

We have various options to advertise with us including Events, Advertorials, Banners, Mailers, etc.