Online Distribution Channels for Hotels

Online hotel distribution channels refer to various digital platforms used to market and sell hotel rooms to a global audience. These channels include hotel websites, Online Travel Agencies (OTAs), social media platforms, and specialized booking websites. They are crucial for hotels as they expand market reach, increase booking opportunities, and offer efficient, wide-scale exposure to diverse customer segments. Thus, they ultimately drive revenue growth and enhance brand visibility.

Key Takeaways

  • Hotel’s Own Website: Essential for direct sales without commission, emphasizing mobile optimization.
  • Online Travel Agents (OTAs): Provide extensive exposure and are popular for mobile bookings despite higher commission costs.
  • Global Distribution Systems (GDS): Offers worldwide reach and is used mainly by travel agents for consolidated bookings.
  • Metasearch Engines: Important for visibility and price comparison, attracting price-sensitive travelers.
  • Wholesalers and Tour Operators: Target markets and tap into specialized travel agencies for bulk bookings.

Introduction

The distribution channels that hotels use and invest in can have a significant bearing on their revenue management strategy, and their overall success. These days, many hotels receive more internet bookings than offline travel agents. Meanwhile, more recent advances in smartphone technology have made online distribution channels more important than ever, as consumers now expect to book a hotel room easily, from anywhere in the world, at the touch of a few buttons. So, what are the most important online distributions for hotels?

1. Your Hotel’s Own Website

The most obvious online distribution channel for your hotel is your website, and this is also one of the most cost-effective marketing tools your business will have at its disposal. After all, once initial development fees have been paid, the cost of maintaining the website and hosting it is relatively small.

Your website provides an ideal platform to convey your brand values and deliver a marketing message that appeals to your target audience. At the same time, websites offer an excellent way to increase your hotel’s overall visibility, especially when SEO is carried out effectively, and fresh content is added regularly.

Of course, a hotel’s website is the only online distribution channel where they can generate direct sales without paying a commission to a third party. For this reason, it pays to try to generate as many bookings through your website as possible, which is why many hotels offer incentives for direct bookings.

Today, many people rely almost entirely on mobile and tablet devices to browse the internet. According to the Search & Website Traffic Report by Statista, 54% of global website traffic now comes from mobile devices. Therefore, hotel websites must be mobile-optimized.

The article “Tips To Gain More Bookings With Your Hotel Website” provides more tips about creating a perfect hotel website.

2. Online Travel Agents (OTAs)

Another important online distribution channel for your revenue management strategy is online travel agents (OTAs). Some of the most famous OTAs include Booking.com, Expedia, Orbitz.com, Hotels.com, and Priceline.com. Although this is usually the most costly distribution channel for hotels, there are numerous benefits.

The primary benefit for your business is the extra exposure that OTAs generate. This allows your hotel to attract guests who might not have found you through other channels. For example, according to the Most Popular Travel & Tourism Websites Worldwide Report by Statista, Booking.com had around 565 million visits in January of 2024. OTAs are also the most popular distribution channel for mobile users.

Depending on whether you are a hotel chain or an independent hotel and the location of your property, a commission system of between 15 and 25 percent will usually be in place. Therefore, online travel agents may be the distribution that produces the least revenue per room. Nevertheless, the incremental business can make it worthwhile, and with the right incentives, customers can be encouraged to book directly in the future.

To get the most out of OTAs, it is important to keep the information you provide them with up-to-date and ensure you also give them accurate room descriptions and high-quality photographs. Moreover, you should aim to respond to customer reviews as quickly as possible to limit the impact of any negative feedback.

Important Online Distribution Channels Hotels - Online Travel Agents

3. Global Distribution Systems (GDS)

Finally, a global distribution system, or GDS system, is a network primarily used by travel agents to book airline seats, hotel rooms, and car rentals for their clients and customers. These services are usually consolidated through a GDS, making the booking process far easier. The main GDS systems are Amadeus, Travelport, and Sabre.

In most cases, a GDS will cater to a global market of travel consortia (e.g., American Express, BCD, Carlson Wagonlit, and ABC). This particular distribution channel remains important for hotels and can allow you to foster positive relationships with travel agents, resulting in greater commercial demand for your hotel rooms.

Generally speaking, a global distribution system requires a small initial setup fee, followed by transaction fees for each booking. For hotels, the trick is to balance room rates so that they are low enough to maintain positive relationships with travel agents and generate custom but high enough to offset the fees.

The primary benefit of a GDS is the opportunity to attract demand from all over the world. Once again, the key to success with this distribution channel is keeping information up-to-date so that rates remain competitive.

With internet bookings overtaking many other types and the ever-increasing popularity of smartphones, online distribution channels are now more important than ever. For hotel owners, there are three main channels to be aware of – hotel websites, online travel agents, and global distribution systems. Each of these channels has its plus points and drawbacks. While most hotels should carefully consider all three as part of their revenue management strategy, it is usually best to encourage as many direct bookings as possible. You can read more detailed information about global distribution systems and the benefits for hotels in the article “Global Distribution System (GDS): What Are the Benefits for Hotels?”

4. Metasearch for Hotels

Metasearch engines compile and compare hotel, flight, and car rental data from multiple sources, helping users find the best deals by showcasing options, prices, and amenities in one place. For hotels, visibility on these platforms is key to attracting potential guests and driving bookings. The table below explores how to effectively utilize metasearch engines for hotel bookings, highlighting their key functionalities and providing strategies to enhance hotel visibility and attract more guests.

Metasearch Engine Functionality Tips for Maximizing Visibility and Bookings
Google Hotel Ads Displays hotel prices and availability directly in Google search and Maps results. Optimize your Google My Business listing; use competitive pricing and high-quality images.
Trivago Aggregates rates from various booking sites to help users find the best deal. Ensure rate parity across channels; actively manage your hotel profile on the platform.
TripAdvisor Besides reviews, it allows users to compare prices and book hotels directly. Encourage guest reviews; respond actively to feedback; utilize TripAdvisor’s promotional tools.
Skyscanner Offers a comprehensive search across hotels, flights, and car rentals, focusing on the best deals. Use dynamic pricing strategies; maintain updated and accurate hotel information.
Kayak Compares prices across different travel sites and includes filters for users to narrow down options. Participate in Kayak’s marketing programs; use keyword-rich descriptions.
HotelsCombined A price comparison service that searches other travel sites to compare hotel rates. Monitor your competitive set; offer exclusive deals to stand out on the platform.

Video: Essential Hotel Distribution Strategy

How to Manage Your Online Distribution Channels?

A hotel distribution channel manager is an online management solution that allows you to centralize all your distribution channels and manage operations connected to them from the same place. The article “Hotel Distribution Channel Manager: What Are the Advantages?” provides more information about distribution channel managers.

Important Online Distribution Channels for Hotels FAQs

The three most significant online channels used in the hotel industry are a hotel’s website, online travel agencies (OTAs), and social media. These can assist with marketing, sales, and customer service.

An internet distribution system, or IDS, is a software application or system that allows hotels to distribute hotel inventory across various online platforms. These online platforms may include the hotel’s own website, online travel agencies, global distribution systems, and hotel metasearch engines.

Distribution channels are vital within hospitality and tourism because they allow businesses to maximize reach and increase visibility, generating more business. For instance, hotels can use different distribution channels to target different market segments and advertise room availability.

A hotel’s own website is important for direct distribution because it offers an easy method for customers to complete a booking while also allowing hotels to avoid the commission fees associated with third-party platforms. Avoiding commission fees can enable hotels to offer discounts on direct bookings or simply keep more of the money. Hotels can also control messaging and gain direct access to guest data, assisting with personalization and re-marketing.

Hotel bookings can be divided into direct and indirect bookings. A direct booking is made between the customer and the hotel without the involvement of a third party. It may occur online, over the phone, or in person. Indirect bookings are generated for the hotel by third parties, including travel agents or OTAs. They are typically subject to commission fees, listing fees, or other charges.

More Distribution Tips to Optimize Revenue

The distribution mix that hotels choose to use significantly impacts their revenue management strategy and overall success. In the following articles, you will find more distribution strategies to optimize your revenue:

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This article is written by:

Martijn Barten
Hi, I am Martijn Barten, founder of Revfine.com. I am specialized in optimizing revenue by combining revenue management with marketing strategies. I have over 15 years of experience developing, implementing, and managing revenue management and marketing strategies and processes for individual properties and multi-properties.