Distribution Foundations
Lesson 3 / 9The channel map

Why your real distribution cost is hidden

Ask a GM what their OTA commission is. They will say 15%. Ask what their distribution cost is. They will also say 15%. Both answers are wrong. Real distribution cost includes line items that never show up in a contract and never get added to the OTA commission line on the P&L — and those hidden lines often total another 3-7 points.

The visible cost

Booking.com base commission: 15% (for most properties). Expedia base commission: 18% in many markets. Direct booking engine fee: 1.5-3% of bookings processed. These are the numbers everyone tracks because they show up on the monthly statement.

The hidden costs that come with the OTA

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The hidden costs that come with direct

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The real number

Run the math for the last 12 months: total room revenue, total of every distribution-related line item across the P&L (commission, marketing, technology, payment processing, loyalty rebate). Divide. For a typical urban hotel the real number is 18-25%. For a resort with heavy tur operatörü it can be 28-35%. Once you know your real number, the conversation about whether to push direct is different — and so is the conversation with the OTA KAM at renewal.

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Why your real distribution cost is hidden · Distribution Foundations · OtelCiro Academy