Hotels could be losing up to 20% of room revenues on some bookings due to high OTA commissions, rate discrepancies and gaps between key distribution systems, according to analysis from hotel technology providers Net Affinity and Smarthotel.
The companies, which provide booking technology and digital marketing solutions to hotels across the UK and Ireland, said revenue leakage is becoming an increasing concern as hotels face a more competitive booking landscape.
OTA commissions can range from 15% to 25%, the analysis found, creating a significant gap between the headline value of a booking and the revenue ultimately retained by the hotel. The impact can be compounded by mobile-only discounts, member rates and redistributed wholesale inventory that can undercut a hotel’s direct booking channel.
The analysis also highlights changing guest behaviour, including shorter stays and an increase in last-minute bookings. Static length-of-stay rules, outdated minimum-stay restrictions or delays in updating availability could result in hotels missing profitable booking opportunities.
Mobile is also playing an increasingly important role in the booking journey, making the performance of direct booking channels particularly important. Slow websites, unclear offers or complicated checkout processes can encourage customers to book through OTAs instead.
Net Affinity and Smarthotel are encouraging hotels to review their online booking journeys, channel mix and distribution setups to identify potential sources of revenue leakage. This includes assessing direct booking competitiveness, mobile performance, rate visibility, length-of-stay rules, booking engine performance and the net contribution of each channel after commission and acquisition costs.
Fiona Cooper, client solutions and integration consultant at Net Affinity, said: “Hotels are working incredibly hard to optimise their rates and drive demand, but too often revenue is lost in the gaps between systems, channels and booking journeys. The most visible booking is not always the most profitable one. Once commission, discounts, redistribution and booking journey performance are taken into account, hoteliers need to look closely at the true value of each channel.
“Direct bookings remain one of the strategic routes to profitable growth, but they need to be actively protected. That means having a fast, mobile-first booking journey, clear value for guests and confidence that rates and restrictions are aligned across every platform. Small friction points can have a major impact on revenue. A delayed rate update, an outdated restriction or an extra step in the booking journey can be the difference between a direct booking and a lost guest.”
Hotels could be losing up to 20% of room revenues on some bookings due to high OTA commissions, rate discrepancies and gaps between key distribution systems, according to analysis from hotel technology providers Net Affinity and Smarthotel.
The companies, which provide booking technology and digital marketing solutions to hotels across the UK and Ireland, said revenue leakage is becoming an increasing concern as hotels face a more competitive booking landscape.
OTA commissions can range from 15% to 25%, the analysis found, creating a significant gap between the headline value of a booking and the revenue ultimately retained by the hotel. The impact can be compounded by mobile-only discounts, member rates and redistributed wholesale inventory that can undercut a hotel’s direct booking channel.
The analysis also highlights changing guest behaviour, including shorter stays and an increase in last-minute bookings. Static length-of-stay rules, outdated minimum-stay restrictions or delays in updating availability could result in hotels missing profitable booking opportunities.
Mobile is also playing an increasingly important role in the booking journey, making the performance of direct booking channels particularly important. Slow websites, unclear offers or complicated checkout processes can encourage customers to book through OTAs instead.
Net Affinity and Smarthotel are encouraging hotels to review their online booking journeys, channel mix and distribution setups to identify potential sources of revenue leakage. This includes assessing direct booking competitiveness, mobile performance, rate visibility, length-of-stay rules, booking engine performance and the net contribution of each channel after commission and acquisition costs.
Fiona Cooper, client solutions and integration consultant at Net Affinity, said: “Hotels are working incredibly hard to optimise their rates and drive demand, but too often revenue is lost in the gaps between systems, channels and booking journeys. The most visible booking is not always the most profitable one. Once commission, discounts, redistribution and booking journey performance are taken into account, hoteliers need to look closely at the true value of each channel.
“Direct bookings remain one of the strategic routes to profitable growth, but they need to be actively protected. That means having a fast, mobile-first booking journey, clear value for guests and confidence that rates and restrictions are aligned across every platform. Small friction points can have a major impact on revenue. A delayed rate update, an outdated restriction or an extra step in the booking journey can be the difference between a direct booking and a lost guest.”
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It is a long established fact that a reader will be distracted by the readable content of a page when looking at its layout. The point of using Lorem Ipsum is that it has a more-or-less normal distribution of letters, as opposed to using ‘Content here, content here’, making it look like readable English. Many desktop publishing packages and web page editors now use Lorem Ipsum as their default model text, and a search for ‘lorem ipsum’ will uncover many web sites still in their infancy.
The point of using Lorem Ipsum is that it has a more-or-less normal distribution of letters, as opposed to using ‘Content here, content here’, making
The point of using Lorem Ipsum is that it has a more-or-less normal distribution of letters, as opposed to using ‘Content here, content here’, making it look like readable English. Many desktop publishing packages and web page editors now use Lorem Ipsum as their default model text, and a search for ‘lorem ipsum’ will uncover many web sites still in their infancy.
It is a long established fact that a reader will be distracted by the readable content of a page when looking at its layout. The point of using Lorem Ipsum is that it has a more-or-less normal distribution
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