Independent Hotel Revenue Management Trend – Direct Booking

The latest Revenue Management Trend in Hotel Industry – Direct Booking. Direct Booking could increase your hotel profit margin. But why now but not earlier? Prior the Software-As-A-Service (SAAS) era, it’s very costly to own your instant booking engine (IBE) on your official website. An IBE could cost a hotel easily MYR 10,000 (approx USD 3,000) one-off and MYR 2,000 (approx USD 600) per year subsequently.

Like any other hoteliers of international chain hotels, hotelier from independent hotels are always seeking ways to increase sales. Prior 2017, most of the independent hotels’ hoteliers rely on Online Travel Agencies (OTA) like Agoda, Expedia, Booking.com etc to distribute their inventories online but things have changed since.

Many hotels have pickup Instant Booking Engine (IBE) on their official website to accept Direct Bookings.

Why Direct Booking Matters?

As the OTA commission hike, profit margin will be greatly reduce; this is not a big issue for large international hotel chains where they have revenue management and income from direct bookings with better profit margin. But this is not so for independent hotels who relies solely on the bookings from OTA!

Refer below for the list of the commission charges by each OTAs on average to independent hotels:

  • Booking.com – from 15% onward
  • Agoda.com – from 17% onward
  • Expedia.com – from 25% onward

Some discussion of Booking.com’s commission on Quora – https://www.quora.com/How-much-commission-is-booking-com-charging-their-partner-hotels

Malaysia-Hotel-Scene-2015

[Percentage of Hotel In Malaysia with IBE against Hotel without IBE]

But, Why Now?

Prior the Software-As-A-Service (SAAS) era, it’s very costly to own your instant booking engine (IBE) on your official website. An IBE could cost a hotel easily MYR 10,000 (approx USD 3,000) one-off and MYR 2,000 (approx USD 600) per year subsequently.

But things has since change, thanks to the internet and cloud technology. Instead of one-off Continue reading “Independent Hotel Revenue Management Trend – Direct Booking”