Building a Profitable Hotel Strategy: Direct Channel Distribution

In today’s competitive hospitality landscape, hotel distribution channels are critical to connecting hotels with potential guests. These channels include online travel agencies (OTAs), global distribution systems (GDS), metasearch engines, bedbanks, and direct bookings, among others.
 

Thanks to the wide range of channels at their disposal, independent hotels and small chains have the opportunity to compete with global hotel brands. However, success depends on using these distribution channels effectively, rather than trying to use them all at the same time. Selecting the right mix of channels that align with a hotel’s goals is crucial.  
 

In this article, we'll explore direct channel distribution, its current landscape, key benefits, and future projections for 2024–2025. Additionally, we'll discuss how hotels can optimise direct bookings while complementing their B2B distribution strategy with platforms like Hotelbeds. 

How Does a Direct Distribution Channel Work?

The direct booking channel allows hotels to sell rooms directly to guests through their own platforms, such as the hotel website, phone, email, live chat, or messaging apps. This channel is particularly attractive to hoteliers because it removes commission fees, for example. As a result, hotels retain more revenue per booking, while maintaining full control over pricing, guest relationships, and branding.
 

Recent data shows that while 60% of hotel bookings are made online, only about 20% are completed directly on hotel websites, according to a report by Amadeus. In contrast, OTAs still dominate the market. This disparity can be attributed to OTA marketing budgets, consumer trust, and the convenience of booking through well-established third-party platforms.  
 

A report by Phocuswright forecast that, throughout 2024, direct bookings would grow modestly, due to technological improvements and increased guest preferences for personalised service. However, the direct channel still has many competitors, which offer strong customer acquisition capabilities, particularly in emerging markets.  
 

Hoteliers must invest in user-friendly technology, marketing, and guest experience enhancements to capture more direct bookings. For example, studies indicate that by 2025, direct bookings could grow by 10-15% if hotels optimise their digital strategies and focus on personalising guest journeys.
 

Benefits of Leveraging the Direct Channel Distribution

Direct bookings offer hoteliers numerous advantages beyond avoiding OTA commissions. These benefits include cost savings, enhanced guest experiences and brand control.  
 

• Higher Profit Margins: By eliminating the OTA commissions, which can be as high as 25%, direct bookings significantly improve a hotel's profitability. A HSMAI report found that hotels could improve revenue per booking by up to 18% through direct channels, contributing to better bottom-line performance.  
   
• Stronger Guest Relationships: The direct channel provides hotels with the opportunity to interact with guests from the beginning. This enables more personalised communication, which fosters loyalty. According to Skift, hotels that focus on direct bookings have the potential to increase their guest retention rate by 8-10%, as they offer custom experience.  
   
• Complete Control Over Brand and Guest Experience: Through direct bookings, hotels control the entire guest journey—from pre-booking to post-stay engagement. This level of control ensures that the hotel can provide a consistent brand experience, personalising every touchpoint, such as emails, booking confirmations, and follow-ups, which contributes to long-term guest loyalty.  
   
• Revenue Management and Data Insights: Direct channels offer better insights into customer behaviour, allowing hotels to refine their pricing and marketing strategies. Access to direct customer data enables hotels to implement targeted marketing campaigns, helping increase RevPAR (Revenue per Available Room).

Why Is the Direct Channel the Perfect Complement to B2B Distribution?

While direct booking channels are a powerful tool for hotels to increase profitability and control, they work best when complemented by a solid B2B distribution strategy. For example, Hotelbeds provide hotels with access to over 60,000 travel trade distributors globally, which allows them to reach high-value, long-haul customers and niche markets that may not be easily accessible through direct channels.  
 

By integrating the direct booking channel with a robust B2B platform like Hotelbeds, hotels can reduce their dependence on other distribution channels with higher commissions while maintaining high visibility across multiple markets.  
 

Hotelbeds is part of HBX Group, a global network of interconnected products and services that serves the needs of global travel players. The group also includes Roiback, the brand specialised in direct distribution. In this way, through the HBX Group offering, we enable hoteliers to integrate their revenue streams with both B2B and direct distribution channels, balancing short- and long-term goals.  
 

Essential Features for an Effective Direct Booking Channel

There are certain components that you could include in your direct booking strategy in order to achieve faster results and streamline your operations. Listed below are those we recommend for effective distribution:
 

• Booking Engine: A fast, user-friendly, and secure booking engine integrated into the hotel’s website is essential. It should offer real-time availability, flexible payment options, and seamless navigation to encourage bookings.  
   
• Loyalty Programmes: Offering rewards and perks for direct bookings helps build long-term relationships with guests and encourages repeat stays.  
   
• Digital Marketing: Hotels must invest in a comprehensive digital marketing strategy that includes search engine optimisation (SEO), pay-per-click (PPC) campaigns, social media marketing, and email marketing to drive traffic to their website.  
   
• Multilingual Support: To appeal to international travellers, it’s crucial for the direct booking channel to offer content in multiple languages. This not only improves accessibility for global customers but also increases conversion rates by making it easier to navigate the site and book rooms.  
   
• Flexible Payment Options: Providing various payment methods, including local currencies and different payment gateways (such as PayPal, Apple Pay, and international credit cards), ensures that guests from all regions can complete their bookings easily.  
   
• Integrated Customer Support: Incorporating live chat, chatbot support, or a direct messaging option helps answer potential guests’ questions in real-time. This reduces booking friction by addressing concerns or questions immediately, leading to higher conversion rates.  
   
• Advanced Analytics and Personalisation Tools: Hotels should use data analytics to track customer behaviour, allowing them to offer tailored packages, special discounts, and personalised recommendations. Data-driven insights help increase conversion rate and guest satisfaction.
   

How to Improve Direct Channel Performance?

While the direct booking channel eliminates commission fees, it comes with its own costs, such as technology investments and marketing expenses. Therefore, optimising this channel requires strategic planning and execution. Here are some actionable steps hotels can take to improve their direct booking channel performance - whether they have external assistance or not.

Boost Online Visibility  

• SEO Best Practices: Optimise your hotel’s website for search engines by using relevant keywords, creating high-quality content, and ensuring fast load times. Higher visibility on search engines will increase organic traffic and drive more direct bookings.  
   
• Presence on Metasearch Engines: Metasearch engines like Google Hotel Ads, TripAdvisor, and Trivago allow travellers to compare rates and options from various providers, including OTAs. For hotels, appearing on these platforms increases brand visibility and price competitiveness, directing more traffic to the hotel’s official site. This approach can capture high-intent users already at the booking stage, converting them into direct bookings. 
   
• Mobile-Friendly Design: With more than 50% of bookings made on mobile devices, ensuring your website is mobile-responsive is critical. A mobile-friendly design enhances user experience, encouraging higher conversion rates.  
   

Diversify Marketing Strategies  

• Cross-Channel Advertising: Implement a paid advertising strategy that spans search engines, display networks, and social media platforms. This will boost your hotel's visibility, occupancy rates, and RevPAR.  
   
• Email Marketing: Use email campaigns to engage with past guests and potential new customers. Offer personalised discounts, exclusive deals, and news about upcoming events to drive repeat bookings.  
   
• Influencer and Affiliate Marketing: Partner with influencers and affiliates to promote your hotel to their audience, leveraging their reach to boost direct bookings.  
   

Optimise the User Journey  

• Compelling Visuals and Virtual Tours: Guests rely heavily on visuals when choosing a hotel. Ensure your website includes high-quality images, videos, and virtual tours of your property to highlight its unique selling points.  
   
• Personalised Messaging: Tailor your marketing and website content to specific guest segments—families, business travellers, or couples—with personalised offers and messaging.  
   
• Membership and Loyalty Programmes: Offering exclusive perks, such as discounted rates or complementary amenities, will encourage guests to choose your direct channel. 
   

Maintain Rate Parity  

• Maintain Rate Parity: Maintaining rate parity across distribution channels, including OTAs and metasearch engines, is essential for maintaining trust and avoiding potential penalties from third-party platforms.

These are just a few areas to pay attention to and invest in to maximise your direct channel value. The responsibility of handling all these tasks can become exhausting and time-consuming, and if you also feel this way, consider partnering with companies like Roiback from HBX Group, specialised in the direct channel, who will help you.  
 

Final Thoughts: Maximising Bookings with a Balanced Distribution Strategy            

In conclusion, exploring and investing in direct channel distribution is an essential step for any hotelier aiming to diversify their distribution strategy. While the direct channel offers many advantages—such as improved profit margins, strengthened guest relationships, and greater control over branding—it requires strategic investment in technology and marketing to ensure it is fully optimised for sustainable, medium- to long-term results.
 

When combined with a robust B2B distribution strategy, such as the one offered by Hotelbeds, hoteliers can significantly increase bookings while achieving stronger profit margins than with many other distribution channels. The reach of Hotelbeds’ global network, alongside a well-developed direct channel, allows hotels to maximise their visibility in diverse markets and increase profitability.
 

Register your property with Hotelbeds today to discover the extensive benefits of B2B distribution. To learn more, download our visual guide showcasing the complete range of products and services available to support your property’s growth and efficiency.