Industry Leaders Outline 5 Steps to Refine Hotel Distribution

THE NEWS: OTA commission fees of 15–20% or more can significantly erode margins for independent hotels, the article explains.

DETAILS:

WHY IT MATTERS: High OTA commissions reduce net revenue, making a well‑designed distribution strategy essential for independent hotels to control expenses, preserve margins, and allocate inventory effectively across direct and third‑party channels.

FAQ

What is a hotel distribution strategy?
A hotel distribution strategy is a plan that determines where and how a property sells its rooms across booking channels. It specifies which platforms to list on, how to price each channel, and when to open or close availability, guiding the hotel’s overall sales approach.

Why does a distribution strategy matter for independent hotels?
For independent hotels the strategy matters because online‑travel‑agency (OTA) commissions typically run 15 % to 20 % or higher, which can significantly erode profit margins. Understanding and managing distribution helps owners control costs, preserve revenue, and allocate inventory strategically across direct and third‑party channels.

What OTA commission rates do independent hotels face?
OTAs usually charge commission fees of between 15 % and 20 % of the room revenue, and in some cases the rate can exceed that range. These fees are deducted from the booking value before the hotel receives its net income, directly affecting the property’s bottom line.

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