Hotel Distribution Channels

Hotel Distribution Channels

  • Posted by: Revenue by HRM

Hotel Distribution Channels

Last week we have looked at the process of setting up and connecting the systems to be able to easily distribute the hotel’s bedroom stock. Today we will look at the different channels available.

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This channel is key for hotels as it showcases the property and the offerings to the customer. It is crucial to have a website that speaks to the target market, provides the information the customer needs, and entices people to book. As this channel is commission free, the NET Revenue is higher than other channels.


For most hotels, these channels produce the highest number of bookings as their reach and authority in the marketplace are very high. There are many smaller OTAs, but the two main ones are and Expedia. Having up-to-date images on these websites can put the hotel ahead of the competition. These OTAs have extranets, which must be updated and kept 100% as this is influencing the ranking. Hotels that show up on the top of the relevant search results will naturally receive more bookings than the ones which fall on page 2 and so on. It is great to receive so many bookings through these channels without much effort, but the hotel must keep in mind the commission payable in return. A system which set up correctly can handle channel close-out, so when the hotel knows they can sell all rooms directly, they can close these channels and achieve higher NET Revenue.


The GDS system connects the hotel with the airlines and travel agencies. When customers purchase a package deal with the airline, those bookings come through the GDS channel. These tend to be lower-rated bookings, but the advantage is the rates are opaque, so the hotel can sell distressed inventory without discounting the rate publicly. GDS is also used by corporate travel agents, like Carlson Wagonlit, to book for business travellers. These rates tend to be higher, so they compensate for the GDS switch fee payable for all bookings.


Trivago is an aggregated search engine. It will search hotels in the area, and it will also search the prices for the same room on different channels. These channels are used by savvy customers, who want to make sure they get the best price for their chosen property. It is essential that the rate pulled from the hotel’s website is the lowest (most likely the same as many other OTAs). If the price is not the lowest, the hotel will lose the booking to an OTA leading to unnecessary commission payments.


The most well-known review website is TripAdvisor. This site is used by many travellers to ensure the hotel has good feedback from previous guests. TripAdvisor also implemented a booking engine with an aggregated search function to monetize their site visitors. Hotels can connect directly to TripAdvisor or via OTAs.


The newest channel is social media which can be used to showcase the hotel and set up direct booking links, like Facebook to Own Website. Since the changes in the news feed of Facebook, the organic conversion has declined, but the right paid adverts can lead to many bookings with lower overall cost than the commission paid to the OTAs.


There are many more channels out there, but more is not necessarily the best when it comes to hotel distribution. Each channel needs to be set up and managed to perform well, so a channel that delivers 10 bookings a year, costs more for the hotel to set up (payroll) than the value it creates. The revenue manager must be mindful of many factors when deciding which channels to use. For example, hotels with many Chinees tourists must set up Agoda, as that is the channel used mainly in Asia. On the other hand, hotels with many American visitors must concentrate on Expedia, the most popular OTA in the US.


Having the right distribution strategy which is executed to precision is essential to every hotel that wants to level the playing field and ensure revenue maximization.

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Author: Revenue by HRM

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