Distribution
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Which distribution channels?
At the moment, the hotel mainly relies on its own sales, in their distribution (so getting customers and occupancy in the hotel) . 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 (costs) 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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