If you ask any hotelier where their bookings come from, chances are they’ll say: “A mix of OTAs, direct reservations, and maybe some GDS.”
NB: This is an article from Staah
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But not all channels are created equal. Each plays a distinct role in a hotel’s revenue strategy, from giving your property global visibility, to driving loyalty, to securing high-value corporate stays. The trick isn’t choosing one over the others. It is knowing how to balance all three: online travel agents (OTAs), Global Distribution System (GDS), and direct bookings.
Let’s break down what makes each channel unique, where their strengths lie and why an optimal distribution mix is the foundation of a resilient hotel business.
Why channel mix matters?
Hotels often fall into the trap of over-relying on a single channel. Maybe it is OTAs, because they bring fast visibility. Or maybe it is direct bookings, because they seem more profitable. But leaning too heavily on one source leaves you vulnerable. OTAs can change their commission structures anytime. Direct bookings need significant investment in marketing and loyalty. GDS requires integration to be effective, but unlocks demand you can’t access elsewhere.
A balanced approach spreads risk, taps into diverse guest segments, and ultimately boosts both occupancy and profitability.
OTA bookings: reach and volume
Online Travel Agencies (Booking.com, Expedia, Agoda) are the go-to platforms for leisure travellers who want convenience and comparison shopping.
The biggest benefits of including OTAs in your channel mix include reach, marketing power and instant visibility to the highest intent online users. Millions of travellers browse OTAs everyday and they have strong marketing power, spending billions on advertising – something hotels (even independent ones) could build upon.
However, the online reach through OTAs comes at a cost – high commissions (15-25%), less control over guest relationships and lower ADR (average daily rate) compared to other channels.
OTAs are most suitable for filling rooms, reaching international leisure travellers and boosting occupancy during shoulder seasons.
Direct bookings: loyalty and profitability
Reservations made through your hotel’s website or direct contact (phone, email, walk-ins) come into the bucket of direct bookings.
The obvious benefits of direct bookings include zero commission fees, full ownership of guest data (crucial for loyalty building) and flexibility to offer tailored packages, upsells and promotions.
Direct bookings also come at a cost as boosting this channel requires consistent marketing (SEO, paid ads, social media). This channel has limited reach compared to OTAs and relies on a strong booking engine to get good online conversions.
Direct booking channel is best to attract repeat guests, loyalty members, locals and leisure travellers motivated by perks like discounts or added value.
