Industry News
February 21, 20244 min read

D-EDGE Report Reveals the Impact of AI on Enhancing Digital Advertising and Direct Booking

D-EDGE Report Reveals the Impact of AI on Enhancing Digital Advertising and Direct Booking — Photo by D-EDGE Hospitality Solutions
Travel Technology Chatbots, Robotics & AI

A recent study highlights how advancements in artificial intelligence (AI) are transforming digital advertising, providing hotels with new opportunities to increase direct bookings and better compete with online travel agencies. This study, presented in a white paper by D-Edge Hospitality Solutions, shows that hotels using AI-driven ad campaigns, in combination with manual campaigns, have seen a significant rise in direct revenue.

Jean-Dominique Brivet, Chief Digital Agency Officer at D-Edge, emphasized the importance of this trend for independent and smaller hotel groups. He argued that relying solely on online travel agencies (OTAs) for bookings is not sustainable in the long term, and that direct distribution offers more control over pricing and sales. This perspective aligns with findings from other recent studies in the hospitality sector.

For instance, the 2023 Digital Hotel Operations Study by H2c revealed that a surge in online direct bookings is spurring innovation in the hotel industry by making guest data more accessible. Similarly, Siteminder's annual report observed a sustained increase in direct bookings post-pandemic, with travelers showing a preference for booking directly through hotel websites for personalized deals.

Another study by SHR Group noted a slight decrease in the proportion of direct bookings, excluding group and contract bookings, underscoring the growing competition for customer loyalty. SHR Group CEO Rod Jimenez highlighted the critical role of hotel technology in this competitive landscape, emphasizing the importance of personalization and guest profile ownership.

D-Edge's study, which analyzed over 1,200 independent hotels and hotel groups in Europe and Asia, found that digital marketing campaigns like keyword purchases significantly boosted direct booking revenues. Brivet noted that hotels engaged in digital advertising saw a 20% increase in direct revenue compared to those that did not.

The study also explored the effective use of AI in advertising, finding that a balanced approach between AI and manual campaign management yielded the best results. Additionally, it highlighted a decrease in the cost of ad-driven bookings, attributing this to factors like lower click costs and higher average hotel room rates.

Google emerged as a standout in the study, with its Performance Max tool leveraging AI to optimize ad campaigns across various platforms. Michael Trauttmansdorff, Google’s Director of Product Management for Travel Ads, praised AI's role in enhancing marketing strategies.

However, the upcoming compliance with the European Union’s Digital Markets Act could potentially disrupt the current dynamics in the online booking sector, according to Brivet. This act aims to ensure fairness in digital markets and could impact major players like Google and Meta.

The study concludes with a focus on pricing strategy, noting that while OTAs remain a significant revenue source, the growing trend towards direct booking and the use of sophisticated digital strategies is reshaping the hospitality industry's approach to marketing and customer engagement.

Access the full report

About D-EDGE

D-EDGE is a SaaS company offering leading-edge cloud-based e-commerce solutions to more than 17,000 hotels in over 150 countries. Combining technical excellence with digital marketing expertise, D-EDGE brings a holistic hospitality technology infrastructure under one roof. The integrated range of solutions covers all stages of hotel distribution which encompasses Central Reservation System, Guest Management, Data Intelligence, Connectivity Hub, Digital Media, and Website Creation. With a team of 500 experts located in over 25 countries, D-EDGE provides localised support, services, and tools. With its global network of 550+partners, D-EDGE’s ever-expanding ecosystem is a positive place to do business and grow. D-EDGE is a subsidiary of Accor, a world-leading hospitality group consisting of more than 5,300 properties and 10,000 food and beverage venues throughout 110 countries. For more information visit www.d-edge.com.

D-EDGE Hospitality Solutions

64-66, Rue des Archives
Paris75003
France

Phone: +33 (0)1 8721 3940
[email protected]
www.d-edge.com