Independent hotels hit by weaker demand & OTA pressure

Cloudbeds has published its 2026 State of Independent Hotels report, based on 90 million bookings across 180 countries.

The study tracks performance in 2025 and points to weaker demand, heavier reliance on online travel agencies and marked regional differences. It draws on booking data from tens of thousands of independent properties.

Global occupancy at independent hotels fell 0.6% year on year, according to the report. Average daily rate declined 5.8%, while revenue per available room dropped 5.4%.

Those trends contrasted with branded hotel performance over the same period and suggest independent operators faced growing pressure on pricing and room revenue as distribution patterns shifted.

Regional split

Performance varied sharply by region. EMEA was the only region to post gains, with ADR up 6.0% and RevPAR rising 3.9%.

Asia Pacific recorded the steepest declines, with ADR down 16.2% and RevPAR falling 17.5%.

North America showed more modest overall declines, but performance was uneven within the region. Canada posted RevPAR growth of 6.0%, while the US recorded a 4.4% decline.

The report describes this as a widening divergence in market conditions for independent hotels. Some operators benefited from local demand and resilient pricing, while others faced a softer trading environment and weaker returns.

OTA pressure

Distribution was another area of change. OTA share of independent hotel bookings rose to 63.4%, and in some markets approached 80%.

Cancellation rates also varied significantly by channel. OTA bookings had a cancellation rate of 21.8%, compared with 10.6% for direct bookings.

That gap matters for operators trying to manage inventory and forecast revenue. A higher share of third-party bookings can increase volatility even when overall demand remains steady.

Booking patterns

Traveller behaviour also shifted. In 2025, guests booked an average of 40 days in advance, up from 38 days in 2023.

North America and EMEA had the longest booking windows, at 48 days and 47 days respectively. The average cancellation window also lengthened to 39 days, compared with 35 days in 2023.

Longer lead times can give hotels more time to respond to changes in demand. They can also create a wider window to resell cancelled rooms, although that depends on local market conditions and channel mix.

Short stays remained the dominant pattern, with more than two-thirds of bookings for one to two nights.

At the same time, bookings of seven nights rose 25% year on year, pointing to growing interest in longer stays as many operators try to balance occupancy with rate discipline.

The report includes regional breakdowns, country-level snapshots and analysis of booking behaviour. It also offers recommendations for independent hotel operators based on shifts in pricing, demand and distribution.

Adam Harris, Chief Executive Officer of Cloudbeds, said the data showed diverging conditions across the sector. "2025 told many different stories for independent hotels, and that divergence is only the beginning," said Harris.

"With AI reshaping discovery, OTA dependence deepening, and margin pressure mounting, independent lodging has never needed clarity more. This report gives operators the sharpest view yet of the forces reshaping their market and, most importantly, provides a path forward," added Harris.