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The hospitality industry relies heavily on two primary booking channels: direct and indirect. Each channel offers distinct advantages and challenges, and understanding the difference is crucial for hotels to optimize their distribution strategy.
Direct booking refers to a reservation made directly with a service provider, such as a hotel, without involving a third-party booking agent or intermediary. This means guests book their stay through the hotel’s own website (e.g. booking engine), by phone, or in person.
Indirect booking refers to the process of a guest making a reservation for a hotel room or other travel product through a third-party platform rather than directly with the hotel or service provider.
These third-party platforms, often referred to as intermediaries, act as a middleman between the guest and the accommodation provider.
Common Indirect Booking Channels:
In the age of online travel agencies (OTAs), the importance of direct bookings has never been greater. While OTAs play a crucial role in hotel distribution, there are significant advantages to booking directly with a hotel.
Online Travel Agencies (OTAs) have revolutionized the way hotel guests book accommodations. However, for hotels, partnering with OTAs comes with a price: fees. These fees can significantly impact a hotel’s bottom line.
OTAs generate revenue primarily through commission fees. This is a percentage of the total booking value charged to the hotel for each reservation made through their platform.
While OTAs offer significant exposure to a global audience, their fees can erode a hotel’s profit margins. To mitigate this impact, hotels must carefully evaluate their OTA partnerships and implement strategies to optimize revenue.
High commission rates directly reduce the amount of revenue a hotel retains from each booking.
Maintaining consistent rates across all channels can be difficult, especially when dealing with different commission structures.
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