How hotels can use AI and marketing to win the competition for bookings

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The tug-of-war between direct channels and online travel agencies (OTAs) has entered a new phase post-COVID-19. While the pandemic initially tipped the scales in favor of direct bookings due to safety concerns and the need for flexible booking options, inflation has driven travelers back to third-party sites in search of better deals. Ta. Data shows that direct bookings peaked at 67% in March 2021, but fell to 47% in Q3 2023, according to the latest figures from Skift Research.

Despite these changes, hotel chains that leverage brand recognition continue to secure more direct customers. SkiftX spoke with Michael Bennett, president and CMO, and Tina Markowitz, Cendyn's president and CMO, and Tina Markowitz, vice president of global digital strategy, to find out how industry leaders are recalibrating their strategies and expanding both direct bookings and third-party sites. We explored ways to utilize this information to meet travelers on the spot.

SkiftX: How has the hotel booking landscape changed in recent years and what are the key trends driving these changes?

Tina Markowitz: One of the biggest changes we've seen is that hotel bookings are becoming increasingly crowded. It's amazing to see how resilient the travel industry has been through the pandemic. However, this increased demand has led to an increasingly fragmented landscape, the introduction of new vendors and technology partners, and the complexity of how travelers book travel.

Michael Bennett: Hoteliers are now having to rethink how they capture that demand, and it shows no signs of slowing down. But what has become clear is Google's role in travel. It is now the most dominant force, not necessarily in terms of reservations, but in terms of influence and influence. When talking about impact, people tend to think of Booking.com and Expedia as the key drivers. However, while it may lead to conversions, Google's role has quadrupled in influence and influence when it comes to how people research travel and destinations.

SkiftX: What are the biggest challenges hotels face when competing with OTAs for room bookings?

Bennett: The biggest challenge for hotels is the sheer size of their investment in OTA marketing. Hotels will never match that. Instead, you should take a strategic, thoughtful, and targeted approach to understanding your audience.

Additionally, compared to other industries such as retail and entertainment, which are not afraid to test and invest in digital technology, the hospitality industry has been slow to adopt technology. There is much we can learn about digital acceleration from these industries. The hospitality industry needs to be more open to learning from other sectors and applying those lessons to improve the use of technology and data management.

SkiftX: What strategies do you recommend for hotels to attract and retain customers in this new normal post-pandemic?

Markowitz: One of the best strategies is to engage in paid media and marketing to find new guests while continuing to drive loyalty from existing guests. Hotels need to emphasize their overall experience and destination in their messaging, not just facility features like rooms and meeting space. Pricing strategy is also important. Hotels need to offer the best price to maximize visibility on Google, where around 90% of bookings are made.

Bennett: The single biggest competitive advantage hotels have is that they own their data. Gain access to rich guest profiles so you can tailor your marketing across channels like email and your website. Repeating what publications like The Economist and Forbes have said, “Data is now even more valuable than oil.” It will be difficult for hotels to compete with OTA spend and brand power without leveraging first-party data.

By connecting the dots and combining first-party data with the right marketing and media strategy, hoteliers can find new guests, drive direct bookings, and grow revenue.

SkiftX: How can hotels leverage digital channels and AI to better understand and meet the needs of today's travelers?

Bennett: First, AI and machine learning can help hotels understand customer insights and behaviors. For example, if a customer is constantly viewing the golf page on the hotel's website, the hotel's website should adjust its services to feature golf packages rather than spa services. . The industry has long struggled to effectively utilize such data.

AI-driven marketing across platforms like Google and Meta can also optimize ad reach by targeting specific audiences and creating lookalike models that attract similar potential guests. This strategy has become smarter, faster, and more accessible for hotels of all sizes, not just those with big budgets.

There are also missed opportunities in how hotels communicate with guests during check-in and check-out to capture and respond to feedback in real-time. This feedback should be integrated into the guest profile for a personalized experience both during the stay and in future interactions.

Markowitz: One of the smartest ways hotels can leverage AI is by analyzing reviews and feedback to identify key themes. This provides actionable insights for hotels to make informed changes. This is a cultural shift in leveraging technology to improve decision-making and guest satisfaction.

A great example of this is a call center application. AI can manage simple and straightforward customer requests and questions, freeing up hotel staff to focus their time on more in-depth conversations over the phone or in person. The AI ​​technology we use to do this is so sophisticated that customers often think they are talking to a real human, saving hoteliers a huge amount of time and labor costs.

SkiftX: How is Cendyn helping hotels create a value proposition so they can choose direct bookings over third-party options?

Markowitz: Our main focus is providing hotels with tools to find more guests, drive direct bookings, and grow revenue. This provides hoteliers with further automation and more effective marketing capabilities to their guests. Consider what your customers want when making a reservation. Typically, customers want a website that speaks about their experience, assures customers that their data is safe, answers questions, and is easy to navigate. Our website CMS product allows hotels to do just that. Whether you need to customize your service, build a new page, or create content that answers people's questions, we can help you facilitate the direct booking process.

Maintaining rate parity is also important for conversion. Our metasearch and pricing tools help hotels offer the lowest rates with the right message when advertising. That leads to conversions and ultimately direct bookings.

SkiftX: What new features and services can hotels expect from Cendyn's upcoming rebranding?

Bennett: We are excited to be launching our new brand at ITB in Berlin this week. Cendyn has been busy acquiring companies in recent years and is focused on a unified platform strategy. This includes a single CRM, CRS, CMS, and robust DMP (data management platform) through the acquisition of WIHP, a well-known hotel metasearch and technology company. Our goal with Cendyn's new brand positioning is to bring everything together and provide industry-tailored solutions.

We are now in a position to serve hotels of all sizes, from small independent hotels in Europe to large luxury collections in the US and Asia. While hotels can still purchase individual services, our new strategy focuses on integrated solutions that leverage first-party data to drive value.

The commercial dynamics of the industry have evolved post-pandemic. Traditional departments between sales, marketing, and revenue management are becoming more integrated, reflecting a deeper understanding of their interdependencies. At Cendyn, we have responded by providing a solution that holistically addresses these areas. We focus on comprehensive commercial strategies that deliver tangible results, such as increasing revenue, building email lists, and improving return on advertising spend, not just individual strategies. This holistic approach is a huge evolution for us and we're very excited.

SkiftX: How do you think the balance between direct and third-party bookings will change in the hospitality industry in the future?

Markowitz: Ideally, the industry's view of OTAs should change. They are integral to the landscape and provide a one-stop-shop experience that appeals to consumers seeking simplicity in a fragmented market. However, the goal is to move away from thinking of OTAs as the primary booking channel and instead use his OTAs as a starting point for guests to consider their options. The challenge lies in ensuring that travel does not end with his OTA, but returns to the hotel's own channels, where a compelling story and competitive pricing drive direct bookings.

SkiftX: As the industry continues to evolve, what is the next frontier for hotels to optimize their direct booking channel?

Bennett: AI and machine learning are enablers, but first-party data is truly the next frontier. Here, hotels have a unique advantage over his OTAs and can directly help drive business by understanding and expanding their database, enriching guest profiles, and increasing engagement across channels. Masu. 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. This means more than just collecting emails, every interaction with a guest is an opportunity to collect valuable data. By asking simple questions, you can enhance your guest profile and improve their overall experience. Hotels should also consider lead generation to collect information on prospective guests even if they have not yet made a reservation. A mindset shift toward database growth and data health is essential for hotels to remain competitive and reduce dependence on OTAs.

For more information about Cendyn, please visit: cendyn.com.

This content was created with the help of: Sendin Skift's Branded Content Studio; skift x.