The True Cost of Hotel Distribution

Why can’t you still get a straight answer when you ask which channels actually make you money?

Because hotel distribution today is basically like an investment portfolio, and most hotels are pretending it’s a spreadsheet.

Every day you’re shuffling money between OTAs, Brand.com, corporate, wholesale, meta, ads, and voice. You have 14 dashboards, and none of them tells you if a booking is actually profitable.

• You don’t have real customer acquisition costs (CAC).
• You don’t know which channels are high-yield and which are eating your margins.

And here’s the painful part:
You’re optimising distribution based on accounting numbers, not economic reality.

Which is how you end up with:

• Overfunding “cheap” channels that silently leak margin,
• underfunding “expensive” channels that actually deliver incremental demand,
• chasing direct bookings you can’t afford,
• and negotiating corporate accounts that look stable on paper but destroy contribution.

Why? Because you don’t have visibility.

The Real Reason Hotel Distribution Is a Mess

Ask yourself: 

What’s my OTA commission?
“18%, easy”.

What are my direct costs?
“4–6% — I’ve got this”.

Wholesalers?
“10–15%.”

And what about the true cost of each channel?
…long pause, slight panic…

Here’s the reality: The invoice cost is the small cost. The hidden economic cost is the real margin killer.

What’s Destroying Your Hotel Margins (And Isn’t on the Invoice)

1. Incrementality loss

A channel that drives bookings isn’t necessarily driving incremental bookings.

10–30% of OTA bookings can displace direct bookings. This means you’re paying commission for business you would’ve gotten anyway. That’s a total leakage.

How Juyo Analytics helps: The Channel Cost widget exposes how your direct-channel economics shift over time.

By visualising commissions, markups, and pass-through fees, it highlights where incrementality is eroding so you can course-correct your Brand.com strategy.

2. Demand-dependent CPC inflation

Your direct “cost per booking” explodes during high demand. You’re paying €35–€45 for a meta click-through in peak season while screaming that OTAs are “too expensive.”

Here’s how distribution cost actually behaves:

• Low demand: OTAs drop CAC because they subsidise demand creation.
• High demand: Meta and pay-per-click (PPC) spike, making direct suddenly more expensive than OTA.

How Juyo Analytics helps: The Market Insight by Lighthouse widget shows demand surges before your CPC inflates. 

This lets you anticipate when advertising gets expensive and adjust budgets dynamically instead of reactively.

3. Rate integrity erosion

Forget “best rate guarantee.”
Rate integrity is about protecting the price ladder that drives your most profitable channels.

When wholesalers leak, or OTAs push discounted rates:

• Direct conversion drops.
• Corporate RFP audits fail.
• BAR compression accelerates.
• Revenue forecast accuracy collapses.

It’s rare to see the total impact because it’s diffused across revenue lines, but it can cost you 4–9% of annual room revenue, silently.

How Juyo Analytics helps: The Market Share Overview widget gives you a real, competitive view of rate integrity — not just your ADR in isolation, but how it performs relative to the market around you.

The key metric is Average Rate Index (ARI), which measures your ADR against your comp set’s ADR, giving a clear picture of whether your rates are holding strong or eroding relative to the market. 

It answers the question: “Is my pricing power holding, or am I silently discounting to stay full?”

If ARI drops while MRI (occupancy) holds, your rate integrity is eroding. You’re filling rooms at the wrong price.

4. Cancellation behavior

Cancellation is a cost multiplier.

Channels differ massively in:

• Cancellation rate
• Rebooking probability
• Last-minute cancellation exposure
• Operational impact
• Forecasting distortion

But remember: A channel with cheap acquisition but 35% cancellation isn’t cheap.

How Juyo Analytics helps: The “Cancellation widget” exposes cancellation behaviour by segment and channel.

It shows key metrics including ADR, revenue impact, cancellation count, fees collected, and the overall share of cancellations — long before they distort forecast and margin.

5. Displacement cost

How much revenue do you lose if you accept a group booking at the expense of other types of bookings?

If your “strategic” corporate client is blocking a €400 ADR OTA booking during a major concert in your destination, you’re losing opportunity.

How Juyo Analytics helps: The Daily Breakdown widget reveals the exact nights where displacement occurred.

It shows when you:

• Accepted low-yield business too early,
• filled with the wrong mix before compression, and
• missed high-paying demand because inventory was already gone.

This is the foundation of accurate displacement cost analysis.

The Real Story of Distribution

Remember:

• Direct isn’t always cheaper.
• OTA isn’t always expensive.
• Corporate isn’t always strategic.
• Wholesale is almost never “base.”
• Loyalty isn’t free.
• Meta isn’t predictable.
• Voice is labour.

You wouldn’t invest blindly in equities just because they “feel” like they perform better, right? You’d look at yield, volatility, the return on the next dollar, displacement impact, and risk.

Distribution deserves the same level of discipline.

But you can’t do that using Excel, PMS exports, OTA dashboards, Google Ads reports, and your gut feeling.

And that’s where Juyo Analytics comes in. 

It gives you what every hotel is missing: a clear, contextual, economic view of every channel — not what they cost, but what they do to your profitability.

Juyo shows you:

• How much revenue each channel actually retains.
• Where you’re leaking margin.
• How demand affects acquisition cost.
• Where displacement happens.
• How cancellation behaviour affects risk.
• How your pricing power holds relative to your comp set.

In other words: the economic context you need to make investment-like decisions.