Both the number of ways of booking a hotel and the costs of delivering a hotel booking through each of these channels has changed dramatically in recent years. In the early 1990s hotels relied on phone calls from their direct customers, business travel agents (as they were then called) and other intermediaries, with bookings confirmed by fax, telex or snail mail. Of course the internet changed everything, fragmenting the number and range of channels through which a hotel can receive a booking, and the rates applied to those channels. TMC and HBA commissions, GDS and switch fees are nothing new, whilst the rise of Online Travel Agents (OTAs) with higher commission charges (compared to the traditional 8 or 10%) plus VAT have all eroded the hotelier’s margin. In fact, from a gross booking value of £100, the hotelier can lose as much as £30 in distribution and channel fees. Distribution management means tracking and assessing conversion ratios, revenue- to-cost models and ancillary spend for both direct channels (i.e. the phone and hotels’ own website) as well as third parties, all adding to the cost of managing and monitoring these disparate revenue streams. But whilst the distribution landscape itself may be evolving, the challenge for the hotelier remains the same; to identify the channels that produce the best yield in terms of occupancy and rate. The internet is now a mature booking channel; 2014’s business and leisure traveller demands real-time pricing, availability and a lowest rate guarantee. Traditional pricing promotions can be counter-productive in a channel where a lower rate is only a couple of clicks away. Meta-search technology has given rise to price comparison sites who are all offering the same value proposition – the lowest rates on the market. And yet hotels have been slow to adapt their distribution strategies to the fragmented landscape. Some have opted not to work with the OTAs during peak periods, but still turn to them when occupancy is down. Download the full report at HRS (free registration)