introduction
Hotel operators face a crucial decision every day: where should they sell their rooms to maximise profitability? This choice has grown from a simple booking question into one of the most important strategic decisions in modern hospitality.
Hotels entering new markets often face unfamiliar guest behaviours, low brand recognition, and significant pressure to hit occupancy targets. Simply put, what drives bookings at home might not resonate abroad.
At DVS, we’ve observed hotels that approach channel management strategically, integrating pricing strategies directly with distribution capabilities, to consistently outperform their peers.
But why exactly does this matter?
Distribution as a Commercial Lever
Many hotels still view channel management operationally, asking “Where should we list our rooms?” or “How do we manage online travel agent (OTA) commissions?” The strongest players recognise it as something more powerful: a critical commercial lever that directly shapes margins, occupancy, and business agility.
Think of it like a retailer choosing which shops should stock their products. They wouldn’t choose randomly. They would consider which locations reach target customers, which partnerships offer the best profit margins, and which provide flexibility when market conditions change. Hotel channel management works on these same principles.
And this extends beyond where to sell — to how to spend.
Is it better to drop price by £1, or spend £1 on marketing to generate new demand? The answer isn’t simple. It depends on your channel mix, price sensitivity, ROAS, and cost to serve. But the implications are profound: one choice erodes margin; the other can grow contribution.
The savviest operators don’t choose one or the other — they test both, leveraging integrated tech to make smarter decisions that maximise ProfPAR, not just RevPAR.
Hotels that effectively align their distribution strategies with revenue management are best positioned to:
- Scale profitably to expand into new markets.
- Defend and increase margins through smarter control of channel availability and costs.
- Adapt quickly to respond to local market specifics and evolving guest booking behaviours
Conversely, poorly managed distribution strategies rapidly drain margins through excessive OTA fees or leave rooms empty due to channel mismanagement.
The Power of Integrated Systems
The real transformation happens when Revenue Management Systems (RMS), which forecast demand and set optimal rates, integrate seamlessly with Channel Management Systems (CMS), which manage distribution across all channels.
Here’s how it can make a difference:
- Dynamic Pricing: When RMS and CMS are integrated, it enables the opportunity for dynamic pricing, where optimal rates reach the right channels at the right time – RMS identifies optimal pricing; CMS ensures it reaches every channel in real-time.
- Inventory Yielding: Automatically restrict lower-margin OTA sales during peak demand periods to protect overall profitability.
- Tactical Promotions: When demand softens, targeted promotions may be deployed through specific channels to fill quieter periods without sacrificing margins.
- Channel Segmentation: Tailoring rates and promotions by channel to optimise profitability.
- Data-Driven Feedback Loop: Real-time booking data from CMS continuously informs RMS, enhancing forecasting accuracy and pricing strategies.
- Spend Efficiency: By connecting pricing and distribution, hotels can make smarter trade-offs — spending to attract high-converting direct traffic rather than discounting broadly and losing margin.
Results from the Industry
Across the industry, strategic channel management integration is already delivering significant, measurable results:
- An independent UK hotel increased direct bookings by 14% year-on-year through strategic channel management, significantly reducing OTA fees and boosting overall margins.
- A European boutique chain achieved a remarkable 39% increase in RevPAR by actively aligning their RMS and CMS strategies, driving higher direct bookings through carefully managed promotions.
These examples demonstrate how well-integrated channel strategy delivers far more than operational efficiencies. It creates genuine competitive advantage that translates directly to improved financial performance.
Where the Industry Is Headed: Integration and Flexibility
The hospitality landscape is shifting rapidly. Modern platforms like SiteMinder and Cloudbeds now allow real-time rate and inventory updates across all channels, while sophisticated analytics dashboards empower hotels to react instantly to market changes.
At the same time, regulatory developments – such as the EU’s ruling against Booking.com’s rate parity clauses – are giving hotels greater control to differentiate direct rates vs OTA rates and regain ownership of their distribution strategy.
This shift towards integration and flexibility isn’t optional. It’s the new baseline. Operators who adapt fastest will shape the market rather than simply respond to it.
Why Partner with DVS?
At DVS, we see the integration of revenue management and channel management as far more than an operational necessity. We see it as a growth lever that transforms how hotels compete and succeed. The hotel groups that treat it strategically scale faster, adapt better to market shifts, and build stronger, more profitable channel mixes.
Our approach combines commercial strategy with hands-on execution, supporting multi-site operators facing seasonality, shifting guest behaviours, and rising cost pressures. We help them fill rooms while protecting margins, because sustainable growth requires both.
Whether you’re entering new markets, managing a varied portfolio, or refining your distribution mix, integrating channel and pricing decisions should be at the heart of your commercial engine.
Connect with us today and let’s explore how you can turn distribution into your next strategic advantage.
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