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What is online distribution for hotels? 

Written by Marijke Remmelzwaan | August 31, 2020

Do you ever wonder how hotels got their hotel rooms fully booked before the dawn of the internet? Or do you miss the times where hotels didn’t depend on online channels to generate revenue? Whether you long for the good old days or get excited about all the available hotel technology, creating a solid online distribution strategy for your hotel is unavoidable.  

Online distribution for hotels is defined by the transfer of guest and reservation data between (online) booking platforms and hotel systems. This data includes reservation delivery and availability/rate updates, but also guest and payment information. In an online distribution strategy, you decide how and where to sell your rooms online profitably. You create the right mix of indirect booking channels (OTA’s, GDS, Wholesalers) and direct booking channels (IBE, Metasearch) and adjust your offers (e.g. rooms, pricing, packages) accordingly. With the right online distribution mix, your hotel will generate more visibility, drive more revenue, increase the occupancy, and attract the right segment of travellers.  

 

So, what type of online distribution channels are out there for hotels?

 


Indirect booking channels  

  1. OTA

    OTA stands for Online Travel Agency, or in straightforward terms: booking site. For those who are not yet familiar: an OTA displays your rooms, arranges the traveller’s booking process and is the primary point of contact for your guests. There are many OTA’s to choose from, and they come in different shapes and sizes. The most famous OTA’s are, of course, websites like Booking.com, Expedia and Priceline. But a genuinely effective OTA mix should also include regional or niche market OTA’s.

    Learn more about OTA’s >>

  2. Wholesaler

    Wholesalers (or Bedbanks) are companies that make annual contracts with hotels where they buy hotel rooms in bulk. The wholesaler then resells these rooms to third parties such as travel agencies, airlines, or booking sites that the hotel does not have a contract with. A wholesaler only works business-to-business; this means that they will never sell rooms directly to guests.

    Learn more about Wholesalers >>

  3. GDS

    GDS stands for Global Distribution System.  It’s an old, gigantic computer network that transmits the availability and prices of airlines, car rental companies and hotels to travel agencies (both physically and online). A GDS provider (e.g. HotelREZ) will connect the hotel directly to all major GDS systems (Amadeus, Sabre, TravelPort) and will also take care of the sales and marketing activities.

    Learn more about GDS >> 


Direct booking channels  

  1. Hotel website & OBE

    OBE stands for Online Booking Engine. Sometimes it’s also called an IBE (Internet Booking Engine). An OBE is a booking tool that is placed on the hotel’s website so that guests can make reservations directly with the hotel. An OBE is necessary for any hotel that wants to be less dependent on the indirect channels, pay less on commissions per bookings and provide guests with a personalised booking experience.

    Learn more about OBE’s >>

  2. Metasearch

    Metasearch websites are online price comparison sites. A booker can search for a hotel stay via a metasearch website, just like on a booking site. The only difference is that the search results will show the prices of all online booking channels for that hotel. To be listed, the hotel must contact the metasearch website directly.   

    Learn more about Metasearch>>  

 

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About SmartHOTEL

For more than 16 years, SmartHOTEL has been helping hoteliers navigate the exciting world of online distribution. From our office based in the Netherlands and the United Kingdom, our team serves independent hotels, hostels and chains worldwide by providing channel management and tailored online distribution solutions. A lot has changed over the last years, but our goal remains the same: simply connect hotels to the world. For any questions regarding our services, please contact us at sales@smarthotel.nl or call +31 (0)182 75 11 18.
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