Understanding the true cost of hotel distribution
Two bookings at the same room rate can contribute very different amounts to the business. A useful channel strategy starts with understanding the full cost of acquiring and servicing each booking.
Look beyond the headline commission
Commission is only one input. Depending on the channel, costs may include booking fees, marketing spend, payment processing, programme participation and discounts. Direct bookings also have acquisition costs; they should be measured rather than assumed to be free.
Compare like with like
Review net revenue by segment, season and length of stay. A channel that performs well during low demand may be less attractive on compression dates. Cancellation patterns and booking windows also change the value of a booking.
Build a balanced channel mix
The objective is to secure suitable business at a sensible cost. OTAs, corporate accounts, wholesale, GDS and direct channels can each have a role. Decide how each supports your positioning and commercial plan.
Make the review actionable
Agree which costs will be included, check data quality and review regularly. Use the findings to adjust availability, offers and investment without losing visibility of total demand.
How does this apply to your hotel?
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