Improve hotel profitability and direct bookings by using data
06/16/2021|12:31:11 PM|Fornova

Is your hotel facing challenges around distribution health and business intelligence?

The hotelier’s challenge

One of the biggest challenges hoteliers face is that the distribution landscape is evolving constantly and with this, the relationship between hotels and OTAs. 

We see hotels dealing with OTAs undercutting them on a regular basis, a large number of technical issues, and almost 50% of wholesaler revenue on static rates coming from ‘Leakage’. So does this mean ‘direct is best’? Not necessarily. We truly believe OTAs give hotels a real advantage in many ways with their reach and scale, allowing for hotels to reach massive amounts of travellers, as well as providing the hotels with online expertise. 

The challenge comes from ‘a wholesaler leakage spiral’, whereby OTAs reduce the brand ranking and visibility and turn instead to 3rd party distribution channels, creating a billboard effect. Consequently, hotels end up paying higher OTA commissions to be kept in a good position. As a result, hotel sales teams will try and solve the occupancy gaps created by the OTAs with more wholesaler deals. Direct conversions will keep dropping and the brand strength will decline. The result: Profit for owners and net REVPAR will continue to decrease. 

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