The transformation brought about by the digital era has modernized and refined the hotel industry landscape and factors contributing to its growth to a large extent. As a result, new, improved and effective hotel growth strategies have come into play to attract customers, increase occupancy and maximize revenue. One such powerful strategy is the hotel distribution strategy. Owing to its ability to reach a wide audience across the globe in real-time and optimize profits for hotel businesses, all hoteliers are making sure to reap its benefits.

This blog covers everything you need to know about hotel distribution strategies including its meaning, benefits, types of distribution channels and how to create an effective hotel distribution strategy to increase revenue for your business –
At a glance:
– What Is A Hotel Distribution Strategy?
– How Is A Hotel Distribution Strategy Different Than A Hotel Marketing Strategy?
– What Are The Benefits Of A Hotel Distribution Strategy?
– What Are The Different Types Of Hotel Distribution Channels?
– How To Craft An Effective Hotel Distribution Strategy
– Conclusion

What Is A Hotel Distribution Strategy?

In simple words, a hotel distribution strategy is a plan of action to sell rooms through a variety of channels, in the most profitable manner. These channels include a hotel’s website, online travel agencies (OTAs), metasearch sites, global distribution systems (GDS), wholesalers, etc. The goal is to boost visibility, drive bookings and maximize profitability by selecting the right mix of channels.

How Is A Hotel Distribution Strategy Different Than A Hotel Marketing Strategy?
While a hotel marketing strategy’s focus is limited to creating awareness about the hotel and generating demand, a hotel distribution strategy focuses on securing bookings and maximizing profits for the business.
What Are The Benefits Of A Hotel Distribution Strategy?
A powerful hotel distribution strategy can bring about exceptional results for the business. Listed below are some of its key benefits –
Enhance visibility
Target the desired segment
Increase bookings through direct and indirect channels
Maximize profits and
Boost overall business ROI
What Are The Different Types Of Hotel Distribution Channels?
Hotel distribution channels can be categorized into two main types – direct channels and indirect channels. Direct channels include a hotel’s website, walk-ins, reservations made via telephone, etc. while indirect channels include online travel agencies (OTAs), global distribution channels (GDCs), wholesalers, metasearch platforms, etc. Both these channels focus on attracting customers, engaging them and ultimately driving bookings for the busienss. Mentioned below is a brief explanation of all channels –

Direct Channels: These channels include a hotel’s website, walk-ins, reservations made via telephone, text messages, etc. Basically, it enables the customers to get in touch with the hotel directly to make a booking. Generally, direct channels yield the most revenue for properties and hotel as there are no intermediaries involved, which means that the hotel does not need to pay a commission or referral fee to a third party.
Online Travel Agencies (OTAs): Online travel agencies are online marketplaces that offer travel-related products and services to customers. This includes flights, transportation, accommodation, tours, local activities, etc. Some examples of leading OTAs are Expedia.com, Booking.com and Airbnb.com. These OTAs have access to a wide audience, and thereby assist hoteliers and property owners to boost visibility and capture bookings. While listing a property on an OTA is free, they charge a commission fee for every booking made via them.
Global Distribution Channels (GDS): A global distribution channel is a consolidated reservation network, primarily used by travel agents to reserve flights, hotels, rental cars, etc. for their clients in real-time. Some examples of global distribution channels include Amadeus, Sabre, Galileo, Pegasus, etc. Hotels are required to pay a fee to the GDS provider as well as a commission fee to travel agents.
Wholesalers: Wholesalers reserve hotel rooms in bulk well in advance and then resell them to OTAs, travel agencies and tour operators. Instead of charging on a commission basis, they get rooms at a highly discounted rate from the hotels. Typically, they work with large independent hotels and chains to maximize occupancy and guarantee a certain occupancy rate.
Metasearch Engines: Metasearch engines like Google Hotels, Trivago, TripAdvisor, Kayak, etc. enable consumers to view hotel room availability and rates from various sources on a single page. By getting access to all the necessary information in a consolidated form, customers can easily make comparisons and book property of their choice. As far as metasearch platforms are concerned, hotels pay a fee for every click.
About InnQuest
At InnQuest, we understand the importance of the challenges faced by businesses in the hospitality industry. InnQuest’s mission isn’t just to provide the best hospitality management system but to ensure hospitality businesses are supported whenever they need it. Our goal is not only to help manage your businesses more efficiently but also to provide ongoing support to engender growth and expansion.