Hotel Revenue Glossary · Distribution

Distribution Channel

A pathway through which rooms are sold to guests. Major channels include the hotel's own website (direct), online travel agencies (OTAs), global distribution systems (GDS), and offline channels (phone, walk-in).

Why it matters: Each channel has different costs (commissions, fees), reach, and guest quality. Optimizing your channel mix — shifting bookings from high-cost to low-cost channels — directly impacts net revenue without changing your room rates.

Worked example: An A$230 room night nets A$230 booked direct, A$195.50 through an OTA charging 15%, and A$212 through the GDS once a 5% travel-agent commission and a A$6.50 transaction fee come off. Shift 250 room nights a year from the OTA to direct and you keep 250 x A$34.50 = A$8,625 - the same money as selling roughly 37 more rooms at A$230.

Common mistake: Crowning the OTA because its gross ADR looks higher. Those reservations often show the higher gross rate precisely because they are the late, flexible ones. Compare net of commission, and count the loyalty discount, the booking engine and the metasearch click on the direct side so the comparison is honest both ways.

All glossary terms Market Segment BAR (Best Available Rate) ADR (Average Daily Rate)