Online travel agencies are massively outspending hotels in online marketing and customer acquisition, and their aggressive online and TV campaigns are driving consumer traffic to their websites, away from hotel’s official websites.
Specialized hotel OTAs do not only outspend hoteliers, they also seem to be outsmarting hoteliers with strategies to drive prices down and commissions up.
Prices are kept low by increasing available accommodation inventory with speciality lodging (bed and breakfasts, serviced apartments, hostels) and even thousands of individual apartments that can be rented on a daily basis.
“According to a spot check at some of our customers, we estimate that over the last two to three years average commissions paid by hotels to OTAs in markets like London, Barcelona or Lisbon have gone up from 20% to 30%.”
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