U.S. hotels set for earnings bump from robust travel even as costs weigh

U.S. hotel operators are expected to post a rise in first-quarter profit even as they pour in money to lure travelers to make bookings directly through their websites, instead of turning to travel agencies.

While bookings have been getting a boost from increased business and leisure travel, the investments hotels have made to reduce their reliance on online travel agencies (OTAs), which tend to have higher marketing budgets, is eating into the gains.

Last year, U.S. hotels received about $49 billion from online direct bookings and $57 billion from OTA bookings, according to travel market research firm Phocuswright.

"During uncertain economic times, when travelers are looking to stretch their dollars as far as possible, OTAs can help drive demand," Phocuswright's senior analyst Madeline List said.