![QA-How-Hotels-Can-Leverage-AI-and-Digital-Marketing-to-Win-the-Direct-Booking-Race.png Q&A: How Hotels Can Leverage AI and Digital Marketing to Win the Direct Booking Race](https://portalmap.com/wp-content/uploads/2024/03/QA-How-Hotels-Can-Leverage-AI-and-Digital-Marketing-to-Win-the-Direct-Booking-Race.png)
Skift Take Rising competition in the hotel bookings landscape is pushing the industry towards the smarter use of technology. Hotels that leverage first-party data to drive AI strategies can win the race against OTAs for guest attention and loyalty. This sponsored content was created in collaboration with a Skift partner. The tug-of-war between direct channels and online travel agencies (OTAs) has entered a new phase post-COVID. The pandemic initially tipped the scales in favor of direct bookings due to safety concerns and the need for flexible booking options, but inflation has led travelers back to third-party sites in search of better deals. Data shows that direct bookings peaked at 67 percent in March 2021, only to recede to 47 percent in Q3 2023, according to the latest figures from Skift Research. Despite this shift, hotel chains that leverage brand recognition continue to secure more direct customers. SkiftX spoke to Cendyn’s President and CMO, Michael Bennett, and Vice President, Global Digital Strategy, Tina Markowitz, to explore how industry leaders can recalibrate their strategies and capitalize on both direct bookings and third-party sites to meet travelers where they are. SkiftX: How has the hotel booking landscape shifted in recent years, and what are the key trends driving these changes? Tina Markowitz: One of the biggest shifts we’ve seen is that the hotel booking landscape is increasingly crowded. It’s amazing to see how resilient the travel industry has been through the pandemic. However, this growth in demand has resulted in an increasingly fragmented landscape that has introduced new vendors and technology partners and complicated how travelers book their trips. Michael Bennett: Hoteliers now need to rethink how they capture that demand, which shows no signs of slowing down. But what’s become glaringly obvious is Google’s role in travel. It’s now the most dominant force, not necessarily in terms of bookings, but in terms of impact and influence. When we talk about impact, people tend to think of Booking.com and Expedia as the major drivers. However, while they may lead in conversions, Google’s role has quadrupled in impact and influence when it comes to how people research travel and their destinations. SkiftX: What are some of the biggest challenges hotels face when competing against OTAs for guest bookings? Bennett: The biggest challenge for hotels is the sheer scale of OTA marketing investment — hotels will never be able to match that. Instead, they must adopt a strategic, thoughtful, and targeted approach to understanding their audiences. Additionally, the hospitality industry has been slow to adopt technology compared to other sectors, such as retail and entertainment, which are not afraid to test and invest in digital technologies. There’s a lot we can learn about digital acceleration from these industries. Hospitality needs to be more open to learning from other sectors and applying those lessons to improve technology use and data management. SkiftX: What strategies do you recommend for hotels to attract and retain customers in this post-pandemic new normal? Markowitz: One of the best strategies is to engage in paid media and marketing to find new guests while continuing to drive loyalty with existing ones. Hotels need to ensure their messaging highlights not just the property’s features, like rooms or meeting spaces, but its overall experience and destination. Pricing strategies are also key. Hotels need to offer the best price to maximize visibility on Google, where approximately 90 percent of bookings originate. Bennett: The single biggest competitive advantage hotels have is owning first-party data. Access to rich guest profiles allows them to tailor their marketing across channels like email and websites. Echoing what publications like The Economist and Forbes have said, ‘data is now even more valuable than oil.’ It’ll be difficult for hotels to win against OTAs’ spending and brand power without utilizing first-party data. Connecting the dots and coupling first-party data with the right marketing and media strategies allows hoteliers to find new guests, drive them book direct, and grow revenue. SkiftX: How can hotels leverage digital channels and AI to better understand and meet today’s travelers’ needs? Bennett: Firstly, AI and machine learning help hotels understand customer insights and behavior. For example, if a customer consistently browses golf pages on a hotel’s website, the hotel’s website should tailor its offerings to feature its golf packages rather than its spa offerings. The industry has long struggled to leverage such data effectively. AI-driven marketing across platforms like Google and Meta can also optimize ad reach by targeting specific audiences and creating look-alike models to attract similar potential guests. This strategy has become smarter, faster, and more accessible for hotels of all sizes, not just those with large budgets. There’s also a missed opportunity in how hotels communicate with guests at check-in and check-out, capture feedback in real-time, and react to it. This feedback should be integrated into the guest’s profile for a personalized experience in both in-stay and future interactions. Markowitz: One of the smartest ways hotels can leverage AI is by analyzing reviews and feedback to identify key themes. This can provide actionable insights for hotels to make informed changes. It’s a shift in culture towards leveraging technology to improve decision-making and guest satisfaction. A great example of this is in call center applications. AI can manage straightforward, simple, customer requests and questions so hotel staff can focus their time on more detailed conversations by phone and in person. The AI technologies we’ve seen doing this are very sophisticated — a customer often thinks they’re speaking to a real person, and they’re saving hoteliers an immense amount of time and labor cost. SkiftX: How does Cendyn help hotels create a value proposition for guests to choose direct booking over third-party options? Markowitz: Our primary focus is providing hotels with tools to help them find more guests, drive direct bookings, and grow their revenue. Through this, we offer hoteliers more automation and the ability to market to guests more effectively. Consider what customers want when booking: Usually, they want a website that speaks to the experience, assures customers their data is safe, answers their questions, and is easy to navigate. Our Website CMS product allows hotels to do just that. Whether they need to customize their offerings, build new pages, or create content to answer people’s questions, it helps facilitate the direct booking process. Maintaining rate parity is also important for conversion. Our metasearch and rate tools help hotels offer the best rates with the right messaging when advertising. That leads to conversions and, ultimately, direct bookings. SkiftX: What new features or services can hotels expect from Cendyn’s upcoming brand relaunch? Bennett: We’re excited about our new brand launch at ITB in Berlin this week. Cendyn has been busy acquiring companies in the past few years and is focused on a unified platform strategy. This includes a single CRM, CRS, CMS, and a robust DMP (data management platform), thanks to acquiring WIHP, a well-known hotel metasearch and technology company. Our goal with the new brand positioning for Cendyn is to bring everything together and offer tailored solutions for the industry. We’re now positioned to serve hotels of all sizes, from small independents in Europe to large luxury collections in the U.S. or Asia. While hotels can still purchase individual services, our new strategy focuses on integrated solutions that enhance value through leveraging first-party data. The industry’s commercial dynamics have evolved post-pandemic. The traditional divisions between sales, marketing, and revenue management are becoming more integrated, which reflects a deeper understanding of their interdependence. At Cendyn, we’ve responded to this by offering solutions that address these areas holistically. Our focus is not just on individual strategies but on a comprehensive commercial strategy that drives tangible results, whether increasing revenue, building an email list, or improving return on ad spend. This holistic approach is a major evolution for us and something we’re incredibly excited about. SkiftX: Looking forward, how do you see the balance between direct and third-party bookings evolving for the hospitality industry? Markowitz: Ideally, we should see a shift in the industry’s perspective on OTAs. They’re integral to the landscape and provide a one-stop shop experience that appeals to consumers looking for simplicity in a fragmented market. However, the goal is to move away from viewing OTAs as the primary booking channel and instead use them as a starting point for guests to explore options. The challenge lies in ensuring that the journey doesn’t end with OTAs but leads back to hotels’ own channels, where compelling stories and competitive pricing encourage direct bookings. SkiftX: What’s the next frontier for hotels in optimizing their direct booking channels in the context of ongoing industry evolution? Bennett: AI and machine learning are the enablers, but first-party data is the real next frontier. Hotels have a unique advantage over OTAs here that can help them drive direct business by understanding and growing their database, enriching guest profiles, and refining engagement across channels. First-party data isn’t just nice to have — it’s essential for hoteliers moving forward. Markowitz: Hotels need a strategic approach to database growth. It’s about more than just collecting emails — every guest interaction is an opportunity to gather valuable data. Asking simple questions can enhance guest profiles and improve the overall experience. Hotels should also consider lead generation to capture potential guest information, even if they haven’t booked yet. This mindset shift towards valuing database growth and data hygiene is essential for hotels to stay competitive and reduce reliance on OTAs. For more information about Cendyn, visit cendyn.com . This content was created collaboratively by Cendyn and Skift’s branded content studio, SkiftX . Have a confidential tip for Skift? Get in touch Tags: AI in travel, Digital Marketing, direct booking, hospitality, SkiftX Showcase: Hospitality, SkiftX Showcase: Technology Up Next Loading next stories
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