With the recent (19 September of 2024) removal of best price clauses from Booking.com and other OTAs in the European Economic Area, the hotel industry is entering an era of unprecedented flexibility. European Court of Justice (ECJ) states that Booking.com’s restrictions against hotels offering lower rates on their websites are not necessary. Τhis change represents a significant opportunity to rethink pricing strategies and focus on maximizing direct bookings, enhancing profitability, and reducing dependency on OTAs.

The Importance of This Change in Pricing Strategy

The end of rate parity clauses means hotels are no longer bound to offer the same or lower prices on OTAs compared to their direct booking channels. This is a game changer. Until now, many hotels were locked into a restrictive pricing environment where OTAs like Booking.com dictated pricing terms. As a result, hotels could not offer better deals to guests who booked directly through their websites, limiting the potential for higher-margin bookings and more personalized customer experiences.

Now, without the pressure of rate parity, hotels can:

• Control pricing: Set competitive rates on their own websites without worrying about OTA restrictions.
• Increase profitability: By shifting bookings from OTAs (which charge up to 30% commission) to direct channels, hotels can capture more of the revenue.
• Build guest loyalty: Direct bookings allow hotels to build personal relationships with their guests, offering tailored offers and upsells, which OTAs generally do not facilitate.

Impact of Pricing on Booking Rates

Let’s analyze the effect of pricing strategies on the look to book rate (users that proceed to a booking divided by the total users that enter to your booking engine) based on recent data. In this data-driven analysis, we explore how price parity and differentiation affect hotel conversion rates. Below are the key findings from a study that analyzed over 67,000 availability searches across various hotel segments.

Based on observed data, hotels that offer higher prices on their websites compared to OTAs like Booking.com or Expedia experience significantly lower booking rates. When a hotel’s direct price is higher than OTAs, the booking rate averages around 2.98%. Offering the same price as OTAs improves the booking rate to 4.66%. However, offering a lower price on the website significantly boosts the booking rate to 7.3%. This underscores the importance of competitive pricing in driving direct bookings and maximizing revenue from digital marketing investments.

You can also see the detailed table and graph provided, showing the impact of pricing strategies on booking rates

Pricing Strategies to Drive Direct Traffic

• Optimize Your Website and Booking Engine: Ensure that your website and booking engine are user-friendly, fast, and optimized for both desktop and mobile devices. A slow or complicated booking process will discourage potential guests, especially if they can find the same room at the same price on an OTA. Simplify the checkout process and offer a seamless booking experience to increase conversions.
• Dynamic Pricing with Direct Discounts: Use dynamic pricing tools to adjust rates based on demand, but always ensure that your website offers exclusive discounts to guests booking directly. Even a small difference in price can motivate guests to choose your website over OTAs. Offer limited-time promotions, early bird discounts, or packages that include extras like breakfast or spa access to make direct bookings more attractive.
• Best Price Guarantee Badge: Display a Best Price Guarantee badge prominently on your website. This badge should link to a dedicated page (similar to Angsana’s Best Price Guarantee) where you explain that your website offers the best available rates, guaranteed. This builds trust and ensures potential guests feel confident that they are getting the best deal when they book directly.
• Exclusive Perks for Direct Bookings: Offer perks that guests won’t find on OTAs, such as free Wi-Fi, room upgrades, complimentary breakfast, or late check-out. Make sure these benefits are clearly highlighted on your website, reinforcing the value of booking directly.
• Price Matching Tools: Implement price-matching technology, to ensure that your direct rates are competitive with OTAs. This allows you to instantly adjust prices on your website if an OTA lists a lower rate. In addition, display a notification on your website when your rates match or beat those on OTAs, providing confidence to guests that they’re getting the best value.
• Mobile-Only Discounts: Encourage mobile bookings by offering exclusive discounts or perks for guests who book directly through your website on their smartphone or tablet. With the growing trend of mobile research and bookings, offering a slight discount for mobile users can help capture this segment and drive more direct bookings.

Revenue Management Tactics for 2025

1. Use OTAs as a Marketing Channel: While reducing reliance on OTAs is important, they still play a critical role in visibility. OTAs act as a “billboard” for your property, helping attract new guests who may not have otherwise found you. Utilize OTAs for this exposure, but focus on converting those guests into loyal, repeat customers through your direct channels.
2. Leverage Data for Personalized Offers: Use customer data from your CRM to create personalized offers and marketing campaigns. For example, guests who booked directly should receive tailored promotions for future stays. Personalization enhances guest experience and boosts repeat bookings.
3. Revenue Management Software: Automating your pricing adjustments using revenue management software is key to staying competitive. Ensure your rates are responsive to changes in market demand, competitor pricing, and special events. Software tools like channel managers can help you synchronize your pricing across multiple platforms, ensuring your direct rates remain attractive.

Tips for Planning 2025

1. Monitor Competitors’ Rates: Ensure you stay competitive by regularly tracking OTA listings and making adjustments. Use tools that alert you when OTAs undercut your direct pricing.
2. Focus on Long-Term Guest Relationships: Consider launching or enhancing your loyalty program to reward repeat bookings. This not only fosters long-term relationships but also encourages guests to book directly for future stays.
3. Automate Marketing: Personalize your marketing efforts using segmentation tools to send tailored offers based on guest preferences. Marketing automation Tools like have shown success in helping hotels increase direct bookings by up to 77% YoY.

In conclusion, 2025 presents a tremendous opportunity for hotels to capitalize on direct bookings and reduce reliance on OTAs. By leveraging dynamic pricing, personalization, and strategic use of OTAs as marketing tools, hotels can drive profitability and strengthen guest relationships. This shift in strategy is not just about reducing commissions but about creating a sustainable, guest-focused model that prioritizes long-term revenue growth.

Let’s make 2025 the year of direct bookings!