The future of hotel distribution

Hotels are responding to the growing OTA dominance with a creative, multi-channel distribution strategy to attract customers cost-effectively

The hotel distribution landscape is undergoing a major shift, with OTAs now dominating and squeezing hotel margins, while metasearch engines make properties indistinguishable. Additionally, alternative lodging growth threatens hotels' market control.

Amidst this disruption, savvy hoteliers find opportunities in emerging technologies for customized guest experiences, strategic partnerships for local affinity, and targeted social media to expand reach.

Key takeaways

• OTAs now make up over 35% of global hotel bookings, exerting substantial influence with their reach and budgets. Distribution costs through OTAs are soaring, with commissions hitting 30% or more and some hotels paying up to 40% after discounts;
• Alternative accommodations like extended stay rentals and unique properties are challenging traditional hotels for leisure and business guests. Airbnb, for example, has gained significant market share in major cities, as shown in the chart below;
• Despite these challenges, hotels can seize opportunities by adopting an innovative omni-channel approach. By leveraging technologies to enhance guest conversion, hotels can gradually reduce their reliance on OTAs and regain market share.

Get the full story at EHL Insights