Distribution
Which distribution channels?
For now the hotel, in their distribution (so getting customers and occupancy in the hotel) mainly relies on its own sales. So in the variable costs you will see no costs for this at all.
This situation doesn't really match reality anymore. Looking at the market as a benchmark, it would be more realistic to have:
- 30% directly from the own reservation system (CRS), royal customers, website etc.
- 20% via agents (OTA, travel companies, partners etc), who would get 10% commission on an average: mega partners like Expedia.com
- 30% via aggregators like Bookings.com, or who would get 10% commission on an average in many cases more.
- 15% via affiliate links, who you would pay (cost per sale) commission would be like 5% on an average.
- 5% via Daydeal sites like Groupon
Some alternative for Bookings groups, being the biggest payer, are sites like Hotels.com and others.
There is initiatives, like Moonback setting up a more 'fair' system, starting from a steward-ownerships structure.
Interesting read on Hospitality net is The economic impact of OTAs in the EU: summary report.
So looking ahead at the future, using these partners would also mean having the prices go up a bit, to compensate for the commissions to be paid. Or, having a higher occupancy rate to compensate for the additional costs.
Models in operating a hotel
Read the interesting article on profit-models, ownership and distribution White paper in Hospitality Management,
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