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.


IHCL Expands Presence in Chennai with New Taj on ECR

IHCL Expands Presence in Chennai with New Taj on ECR

By Manu Vardhan Kannan

Published on November 7, 2025

The Indian Hotels Company Limited (IHCL), India’s largest hospitality company, has announced the signing of a new Taj hotel on East Coast Road (ECR) in Chennai, Tamil Nadu. This greenfield development further strengthens IHCL’s presence in the city, known for its dynamic mix of business and leisure travellers.

Spread across 13 acres of pristine beachfront land, the 151-key Taj ECR Chennai will offer spectacular views of the Bay of Bengal. Designed to seamlessly blend leisure and business, the hotel will feature an all-day dining restaurant, two specialty restaurants, and a bar. Guests can experience holistic rejuvenation at Taj’s signature J Wellness Circle, along with a state-of-the-art gym, swimming pool, and other recreational amenities.

The resort will also serve as a premier destination for large-scale events and conventions, offering two banquet venues of approximately 10,000 and 5,300 square feet, multiple meeting rooms, and expansive beachfront lawns.

Commenting on the signing, Ms. Suma Venkatesh, Executive Vice President – Real Estate & Development, IHCL, said,

“Chennai’s hospitality landscape is shaped by its strong corporate base, anchored by the automobile industry and a thriving IT ecosystem. Driven by its cultural richness and infrastructure, the city also benefits from a steady influx of leisure travellers and a growing MICE segment. The signing of this new Taj hotel on ECR is a strategic move to tap into this multi-dimensional demand. We are delighted to partner with MGM Healthcare for this project.”

Mr. M.K. Rajagopalan, MGM Healthcare, added,

“We are excited to collaborate with IHCL. This development will offer a world-class experience to guests in Chennai.”

A city celebrated for its rich culture, classical arts, and coastal beauty, Chennai offers visitors attractions like Mahabalipuram, Marina Beach, and Fort St. George. With this addition, IHCL now has 16 hotels in Chennai, including six under development, reinforcing its leadership in the region’s hospitality landscape.

About the Owner:

MGM Healthcare is a diversified venture led by Mr. M.K. Rajagopalan, operating hospitals in Chennai and Vizag, with additional projects underway in Chennai. He also serves as the Chancellor of a renowned university managing medical colleges in Puducherry and Chennai.


Lemon Tree Hotels Expands Footprint with New Property in Bhavnagar, Gujarat

Lemon Tree Hotels Expands Footprint with New Property in Bhavnagar, Gujarat

By Manu Vardhan Kannan

Published on November 7, 2025

Lemon Tree Hotels Limited, India’s fastest-growing mid-scale and premium hotel chain, has announced the signing of its latest property, Lemon Tree Hotel, Bhavnagar, Gujarat. The new hotel will be managed by Carnation Hotels Private Limited, a wholly-owned subsidiary of Lemon Tree Hotels Limited.

The upcoming property will feature 70 rooms, a restaurant, banquet hall, meeting room, and recreational facilities such as a swimming pool and spa, offering both business and leisure travellers a refreshing and value-driven experience.

Located in the historic coastal city of Bhavnagar in the Saurashtra region, the hotel will cater to travellers exploring the city’s unique blend of tradition and modernity. Bhavnagar, once a princely state capital, is known for its vibrant trade, culture, and maritime heritage, along with attractions like Takhteshwar Temple, Nilambag Palace, and the nearby Blackbuck National Park in Velavadar.

The property enjoys excellent connectivity, situated approximately 217 km from Rajkot International Airport and around 6 km from Bhavnagar Railway Station, with well-developed public and private transport links.

Speaking about the new signing, Vilas Pawar, CEO - Managed & Franchise Business, Lemon Tree Hotels, said,

“With this signing, we will expand our leisure and business portfolio in Gujarat, a state where we have 10 operational and 18 upcoming properties in addition to this one. The state, with its booming commerce, distinct culture and unique geography with a long coastline, is the perfect destination for hospitality. While expanding its footprint across the country across cities of all tiers, this signing by Lemon Tree Hotels perfectly aligns with the company’s vision of offering refreshing and comfortable stays across all destinations.”

This addition further strengthens Lemon Tree Hotels’ presence in Gujarat and reflects the group’s steady growth strategy to reach travellers across India with comfort, consistency, and a fresh approach to hospitality.


Espire Hospitality Signs New Country Inn Hotel in Dehradun

Espire Hospitality Signs New Country Inn Hotel in Dehradun

By Manu Vardhan Kannan

Published on November 7, 2025

Espire Hospitality Limited, one of India’s fastest-growing hospitality companies, has announced the signing of a new Country Inn Hotel in Dehradun, further strengthening its footprint in North India’s leisure and business travel market.

Expected to open in February 2026, the upcoming hotel will offer guests a perfect blend of comfort, convenience, and warm hospitality, hallmarks of the Country Inn brand. Designed to cater to both business and leisure travellers, the property will feature 61 well-appointed rooms, making it the largest in the city. It will also house a multi-cuisine restaurant and three large banquets spread over more than 10,000 sq. ft., accommodating up to 600 guests.

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Commenting on the announcement, Mr. Akhil Arora, CEO & Managing Director of Espire Hospitality Limited, said, “We are truly delighted to bring the Country Inn experience to the soulful city of Dehradun, a place that beautifully blends nature’s tranquility with a spirit of progress. Dehradun holds a special charm that makes it both, a leisure traveller’s choice and a thriving urban centre. Our new Country Inn hotel will celebrate this harmony, offering guests a combination of warmth, comfort, and heartfelt service that reflects the very essence of the city.”

This new signing marks another milestone in Espire Hospitality Limited’s rapid expansion journey, becoming the 9th signing in the last three months. The group has expanded its footprint across high-potential destinations with recent signings in Rishikesh, Udaipur, Jalandhar, North Goa, Dehradun, and Varanasi, moving closer to its vision of achieving 30 operational hotels by FY26.

Building on its strong and diversified portfolio, Espire Hospitality Limited continues to grow across multiple segments, from its boutique luxury brand, ZANA Luxury Resorts, to the popular Country Inn Hotels & Resorts. The company’s impressive growth journey, which began with the landmark debut of Six Senses Fort Barwara in partnership with InterContinental Hotels Group, today stands as one of the most inspiring success stories in Indian hospitality.

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