Hotel distribution costs are on the rise, as the march towards travel industry consolidation continues. Indeed, four brands – Expedia, Priceline, Orbitz Worldwide and Travelocity – dominate 95% of the OTA market share in the US alone. Meanwhile, Booking.com, Australia’s fastest-growing OTA, saw a 160% increase in mobile bookings in 2013 with revenues of $8 billion (nearly triple from the year before).
As Google continues to dominate search, there are concerns rankings will bias users in favour of prominent advertisers, further increasing the costs of customer acquisition. While online channels are driving higher booking volumes, steep commissions and pricing transparency are putting competitive downward pressure on rates. So, if you’re feeling the pinch, here are four tips for lowering your hotel distribution costs, commissions and overheads.
1. Don’t put all your eggs in one basket
Statistics from HSMAI show 76% of independent hotel room nights are reserved through OTAs, costing hotels billions in commissions every year. In order to increase direct bookings, hotels need to think about their overall web presence, not just OTAs. By having an Internet booking engine (IBE) on your branded website and investing in social and mobile technologies to drive sales, you can reduce the amount spent on third-party commissions. In particular, you should be looking to leverage the native capabilities of mobile and social platforms as a means of communicating with consumers, providing information and facilitating transactions – not just promoting last-minute deals.
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