Online hotel distribution: Advice from experts

Online hotel distribution is a vast topic with countless nuances. The choice of sales and technology partners seems almost endless.  

What is the best option for your property? 

As is so often the case, the answer is not a simple one: There is, unfortunately, no one-size-fits-all solution that applies to all hotels.  

However, with the right knowledge, you can still make the best decision for your business.  

To do this, you first need find your way through the jungle of online distribution. To help with this, we invited three experts in this field to a live stream  

Together with Elisha and Marco from Hotel-Spider, Dominik Gisler, CEO of consulting firm COM.CIERGE, Martin Werlen, founder of the Bocco Groupe and Stefan Sächerl, Head of Hotel Cooperation at HotelCard shared practical tips and insights about online distribution. 

Here are the key discussion points to give you a better overview and help you optimize your approach. 

The current situation in online hotel sales 

According to a study by HOTREC and HES-SO, the number of direct bookings in Europe has been declining for years as more and more reservations were made through OTAs. This trend reversed slightly during the pandemic, but now it is shifting back in favor of online travel agencies.  

Of course, these are just average figures. The actual number of reservations varies significantly from hotel to hotel. In Switzerland, for example, 40% of hotels generate less than a fifth of their overnight stays through OTAs. About 15% receive over half of their reservations through OTAs. 

“The source of bookings often also depends on the type of hotel. City hotels usually rely heavily on OTAs and GDS, while holiday and luxury hotels often receive more direct bookings“, says Martin.  

It is also interesting to consider the respective positions of the individual OTAs. Booking.com is clearly the most important channel in Europe. On average, around 80% of OTA bookings are made through this platform. Expedia is a distant second with around 15%, followed by HRS with around 5%.  

Again, there is significant variation between hotels. This is partly because different target groups and source markets often prefer a specific channel.  

And this brings us to our first discussion point.  

Advantages of working with OTAs 

Although often criticized for being too expensive and influential, OTA partnerships offer great value for hotels. One of the key advantages is their role as a powerful marketing tool, providing greater reach and visibility. OTAs often connect you with guests who might never have heard of your property otherwise. This so-called billboard effect can even boost direct bookings.  

"But if you're looking to attract international customers, distribution partners are important.  Travelers from abroad are more likely to book through OTAs because they trust the established platform more than an unknown hotel. OTAs are also available in a variety of languages, making research and reservations easier, because all guests can understand the information about your hotel,” adds Dominik.  

The danger of dependence

When collaboration with OTAs is going well, a reliable number of reservations come in on a regular basis and commission costs are transparent.  

Despite these and other advantages of online partners, it's crucial not to become too dependent on these platforms or a single channel.  

“What if your main OTA suddenly decides to increase its commission? You will either have to absorb these costs or pass them on to your guests. But you have little room for negotiation because the distribution partners have more leverage,” warns Martin.  

OTAs also often severely limit hotels in terms of guest communication: “When a guest books through an online platform, they are, strictly speaking, the customer of that platform. As a hotelier, you can only communicate with this traveler in a limited and controlled manner. You also have less opportunity to shape your guests' experience before and after their stay and maintain long-term contact with travelers”, Elisha notes.  

To counteract these points, it's important to diversify your online distribution.  

Diversify sales – the right way 

For most hotels, a combination of direct sales and working with OTAs and GDS is ideal. The balance between these two options depends on the property, market and target group. The same goes when choosing OTA partners.  

“Be strategic when selecting third-party providers. Research their terms and conditions and the pros and cons of each one. If necessary, seek advice from an independent expert,” suggests Martin.  

“Many hotels use five to six common channels and are unaware of the many more options available. That is a pity, because it's worth investing some time to find suitable OTA partners," adds Marco.  

Dominik explains the reason: “Each OTA reaches slightly different target groups and source markets. This is especially true for niche OTAs. Look for partners who will attract the right guests for your hotel and help you build your presence in promising markets 

With a user-friendly channel manager like Hotel-Spider, you can easily go live with interesting, new channels. Then, measure outcomes such as booking volume and the profitability of reservations to decide whether to stick with this channel or try another.  

Balancing parity and promotions 

It's especially important to keep track of your pricing strategy when working with online partners. Ideally, you should offer the best rate on your hotel website If you prefer to maintain rate parity across all channels, you can still make direct bookings more attractive by offering added value, such as breakfast included.  

Sometimes, it might be tempting to launch offers and special discounts on distribution channels. However, Dominik strongly advises against this: “Always offer the same price across all OTAs. Otherwise, potential guests can become confused during their research, feel overwhelmed and, in the worst case scenario, lose interest.” 

Martin agrees: “It can get messy if you have different offers all over the place. It's better to do this on your own website. This way, you can also reward direct bookers.” 

It's hard to say which approach is ultimately best for your hotel. The best approach is to test different strategies and evaluate their results.  

“The challenge for many hoteliers is that there are too many options and not enough time to explore them all. Get external expertise for this. It saves time and gets you on the right track more quickly,” Stefan advises.  

Evaluate partnerships critically 

Even if you do everything right, there is a risk that distribution partners might not always play by the rules. Some, for example, might offer discounts for your hotel without asking or use the margin from commissions to manipulate prices. This can cost you revenue and cause you to lose customers or be penalized on other channels.  

“For these reasons, it's especially important to know the details of your contracts, keep an eye on your channels and address problems to resolve them as quickly as possible. If such incidents occur repeatedly, you may even consider ending the relationship,” says Stefan.  

Supporting innovation 

While many hoteliers would welcome more partner options, it's not easy for new OTAs to enter the market.  

Setting up the technology is complex and it can be a challenge for new platforms to access hotel inventories. This makes it difficult for innovative providers to establish themselves.  

“Working with channels that offer creative concepts and favorable conditions can bring many advantages to hotels, such as access to a lucrative target group or lower distribution costs. So new partners are definitely worth considering,” says Stefan.  

“And if we want innovation, we must be willing to give new channels a chance. Only then can we make progress in the long run,” Elisha adds.  

As you can see, there is no one-size-fits-all solution for optimal online distribution.  Each hotel must find its own path.  

"It all comes down to perspective. OTAs don't just incur costs. They are also valuable partners who can help you to significantly increase your revenue,” emphasizes Marco. 

“To tap into this potential, you need to be well-informed and make conscious decisions. How do you want to set up your distribution? What combination of direct sales and OTAs are you aiming for?” concludes Elisha.  

Once you have your goal in mind, it's time to get started. Implement your strategy, evaluate the results and optimize your approach. 

With the right distribution technology in the background, this all becomes much easier. It allows you to automate a lot of the work, save time and generate more reservations at the same time. 

For more information and to discuss distribution options specifically for your hotel, feel free to contact our team without obligation