As we step into 2026, the relationship between hotels and Online Travel Agents (OTAs) requires a "strategic reset." Despite the digital sophistication of the industry, many properties still remain over-dependent on third-party channels.
Following the insights from late 2025, it is clear that while rate parity clauses have fallen, OTAs have responded with opaque schemes that continue to threaten hotel profitability.
To reclaim profitability this year, hoteliers must shift from a passive OTA-supplier mindset to one of active OTA strategy management. Here are 10 specific risks you must manage to protect your Direct Booking Strategy in 2026.
1. "Hidden" Discount Stacking
A major threat to rate integrity in 2026 remains the stacking of discounts in OTAs, where we increasingly see layering like "Genius" rewards on top of "mobile-only" discounts. Without strict oversight, this can result in your rates being slashed by over 40% without your strategic consent. This drastic undercutting trains guests to undervalue your product, especially direct on your website, and erodes your bottom line.
2. Wholesaler Leakage
Rates intended for B2B packages (FIT contracts) are surfacing on public metasearch engines via third-party sites more frequently. Platforms like Agoda, Guest Reservations or obscure "travel clubs" often undercut official websites using these rates. For 2026, if you do not have strict clauses in your contracts forbidding this leakage, your direct channel will be constantly undermined by your own inventory.
3. The Shift to the Merchant Model
Watch out for the subtle shift from the agency model to the merchant model, where OTAs are taking the payment. This reduces transparency, often hiding the true selling price from the hotel. Under this model, OTAs can effectively sell at whatever price they want by shaving their own margin to be more competitive, completely obscuring your actual Cost Per Acquisition (CPA).
4. Unapproved Promotions
Be wary of "discount campaigns" that you did not explicitly opt into. OTAs frequently launch promotions - such as flash sales, summer deals, or value-adds like free taxi transfers - that can undermine your direct offers. These are often set as default "opt-out" schemes, meaning you are automatically enrolled unless you actively navigate often complex extranet options in order to leave.
5. Guest Data "Lock-In"
Data is the currency of the 2026 digital economy, and OTAs are hoarding it. By using masked email addresses and limiting data sharing, they deliberately prevent hotels from owning the guest relationship. This "lock-in" hinders your ability to market to these guests post-stay and thereby convert them into loyal direct bookers. Always get your guests’ emails at check-in if they have come via an OTA.
6. Unexpected Distribution Networks
When you sign up for programs like "member rates" or package paths, your inventory may be distributed far beyond the primary OTA site. Your discounted rates can end up on a vast B2B network of thousands of travel agents or even appear on competitor sites, diluting your control over who sells your rooms and at what price.
7. Multi-Sourcing Listings
It is common for OTAs to "multi-source" listings, mixing in rates from other OTAs, "partners," and sometimes the GDS. This ensures they always show a price, even if you have closed out that specific channel, creating a chaotic pricing environment where you are effectively competing against your own partners.
8. Ranking Suppression
The "pay-to-play" nature of OTAs is becoming more aggressive. Hotels that do not participate in special programs like "Preferred Partner" or "Visibility Boost" often find themselves algorithmically pushed down the rankings. This pressure forces hotels to pay higher commissions just to remain visible, further eroding the profitability that a good Direct Booking Strategy seeks to protect.
9. High Cancellation Rates
OTAs often make it easy - and sometimes implicitly encourage - guests to book multiple properties and cancel unused ones later. This ties up your inventory during peak booking windows, preventing you from selling those rooms via your lower-cost direct channel, only to have them dumped back into inventory at the last minute.
10. The "Small Supplier" Trap
Perhaps the biggest danger is the psychological one: accepting the status quo. Hotels often act as passive "small suppliers" to the OTA "supermarkets," accepting term changes and commission hikes without challenge. A robust strategy in 2026 requires you to treat these platforms as services you hire, not masters you serve.
Reclaiming Control in 2026
To counter these risks, you must differentiate your product, not just your price. Stop giving OTAs access to your entire product portfolio. Keep high-value room types, such as suites and family rooms, exclusive to your website.
Furthermore, consider applying a price supplement to OTA rates to cover commission costs, which is what smart hoteliers do since the removal or rate parity. This ensures that your direct channel is always the financial winner for the guest. As noted in recent industry discussions, focusing on direct is ultimately the best antidote to OTA dependence.
Note: For a masterclass on data-driven direct strategy, review the insights from Paul Gallagher's interview, which remain highly relevant for the 2026 strategy landscape.
Rigorous Monitoring is Key
You cannot manage what you do not measure. A proactive routine is your only defence. Successful hoteliers spend time making random test bookings and using VPNs to check pricing from international markets to spot "hidden" undercutting.
Promote Your Advantage
You can’t just expect customers to book direct out of some sense of loyalty, or sympathy with your position.. In many cases, the only argument hotels seem to have around book direct is that it is better for them, the hotel, if customers book direct - without any reasoning given for why it must also be better for the guest!
The best strategy is to show that the direct product is different/better AND to show that it is verifiably cheaper. And the key here is to show it and state it very obviously on your website so that there is no doubt in the customers’ eyes.
You need a strategy that (A) makes direct better by default in all cases in terms of price and benefits, which is never undercut anywhere for any reason and (B) tells customers about it at every single opportunity. Without that conviction and discipline, you are allowing OTAs to appear better than you and allowing them to develop customer loyalty at your expense using your product.
