Rethinking hotel distribution through dynamic budgeting

How hoteliers can move beyond commission comparisons to reclaim guest ownership

The debate on hotel distribution has long been trapped in a narrow calculation: OTA commissions versus direct acquisition costs. But this binary misses the bigger picture. Direct bookings are not just transactions — they are strategic assets tied to brand identity, guest data, and long-term loyalty. A new framework, "Dynamic Budgeting," urges hotels to shift their perspective from short-term cost comparisons to lifecycle-sensitive investment in visibility and guest relationships.

Key takeaways

• False clarity of commissions: Comparing direct acquisition costs to OTA commissions oversimplifies the economics of distribution and ignores the strategic value of direct bookings.
• Uneven marketing power: OTAs spend billions on marketing annually, far beyond what hotels allocate, making direct cost comparisons unrealistic and misleading.
• Dynamic Budgeting model: Hotels should invest proportionally, flexibly, and based on lifecycle stage — with higher acquisition spend justified for new properties and leaner budgets for mature ones.
• Guest ownership as the core issue: OTAs curate loyalty to their platforms, but true loyalty follows the hotel experience; reclaiming the guest relationship is the ultimate goal.
• Strategic reframing: Acquisition costs should be seen as long-term investments in sovereignty, not short-term expenses to be minimized.
• New success metrics: Hotels need KPIs that prioritize visibility sustainability, direct channel strength, and guest lifetime value over occupancy or ADR alone.

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