Distribution Mix
In hotel revenue management, distribution mix is the share of your room nights coming from each booking channel: your own website, the OTAs, travel agents, corporate accounts, the phone and the front desk.
It is the largest controllable driver of the gap between the revenue you report and the money you keep, and at most independent properties nobody ever decided what it should be.
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What is distribution mix?
A breakdown of where your business comes from, expressed as percentages that add to 100.
The channels are usually grouped as direct (your booking engine, phone and walk-in), OTA (Booking.com, Expedia and the rest), corporate or negotiated accounts, wholesale and tour operator, and group. How finely you split them matters less than splitting them the same way every time.
You can count by room nights or by revenue, and the two give different answers. Room nights tell you where the volume comes from. Revenue tells you where the money comes from, and because channels carry different rates, a channel can be 30 percent of your nights and 22 percent of your revenue. Most properties should look at both, starting with room nights.
The part that makes the metric matter is cost. Every channel has an acquisition cost, and they are not close to each other. An OTA takes a commission that commonly sits between 15 and 25 percent. A wholesaler buys at a net rate that can be 20 to 30 percent below your published one. A direct booking costs you a booking engine fee of a few percent plus whatever you spent on marketing to earn it. Net ADR yield is how you attach a real number to each.
So distribution mix is two things at once: a description of demand, and a description of cost. Reading it as only the first is the common mistake.
Resources: Direct booking · Net ADR yield · GOPPAR
How distribution mix works in practice
Pull room nights by channel for a full trailing year, because anything shorter is dominated by season.
Worked example. A 46-room inn sells 11,400 room nights over a year at a $164 average rate, so about $1.87 million in room revenue. Its mix is 54 percent OTA, 22 percent direct, 14 percent corporate, 6 percent wholesale and 4 percent phone and walk-in. Moving ten points of volume from OTA at 17 percent commission to direct at a 3 percent booking engine fee shifts 1,140 room nights, worth roughly $187,000 of revenue, and saves about 14 percent of that, or $26,200 a year. Nothing about the published rate changed.
That figure is why the metric earns a place in a quarterly review at a property with no revenue manager. Twenty-six thousand dollars is a meaningful number at that size, and it does not appear on any report the property currently runs.
The everyday use is watching for drift. Mix moves on its own, because OTAs invest continuously in being the easiest place to book and your own site does not. A property that does not measure the mix will find it has migrated several points a year in the direction of whoever is spending the most on acquisition.
Read it by season and by day of week as well as in total. Most independents find their OTA share is highest exactly where they least need it, on the dates that would have filled anyway, and lowest on the midweek dates where incremental demand is genuinely worth paying for.
Resources: Occupancy rate · RevPAR
Why distribution mix matters for independent hotels
Because an independent has no brand channel to fall back on.
A chain property arrives with a loyalty programme, a central reservations system and a name people search by. An independent has a website most travellers will never find unless an OTA shows it to them first. That asymmetry is real, and it is why the answer is almost never to cut OTA share to zero.
What it does mean is that the trade is worth pricing. OTAs deliver demand you would not otherwise see, and they charge for it. That is a fair exchange on the dates where the demand is genuinely incremental, and an expensive one on the dates where the guest would have found you anyway. Knowing which dates are which is most of the work.
The other reason is that mix is the mechanism behind the RevPAR and GOPPAR divergence that catches so many owners. Three years of revenue growth with flat profit is almost always a mix story, and because the industry talks in RevPAR it stays invisible until somebody goes looking.
Resources: Revenue management for independent hotels
How to manage distribution mix at your property
- Measure before you change anything. Room nights by channel for a trailing twelve months, from your PMS or channel manager.
- Attach a cost to each channel. Net ADR yield per channel turns a share into a number you can act on.
- Read it by season and weekday, not just in total. The blended figure hides where the cost is actually falling.
- Set a target, not a direction. "Less OTA" is not a plan. "Direct from 22 to 30 percent within a year" is.
- Protect the channels that fill your hard dates. Cutting OTA exposure in your low season is how properties trade commission for empty rooms.
- Review quarterly. Mix drifts slowly enough that annual review catches it late and monthly review reads as noise.
What distribution mix will not tell you
It cannot tell you which bookings were incremental. An OTA booking from a guest who would have found you directly cost you commission for nothing, and a booking from a guest who had never heard of your property was worth every point. The report shows both as one line.
It says nothing about what a guest is worth after arrival. Channels differ in length of stay, spend on food and drink, cancellation behaviour and likelihood of returning, and a channel that looks expensive on commission can look different once those are counted.
And it is a share, so it moves when the denominator moves. A quarter where direct bookings held flat while OTA volume grew will read as a fall in direct share, which is a different problem from direct bookings actually declining.
How ampliphi approaches distribution
Ampliphi prices rooms. It is not a channel manager and it does not move business between channels, so it does not change your distribution mix directly.
Where it touches the problem is consistency. The everyday rate suggestion is demand-based, built on booking pace and occupancy, and once ampliphi is in place it becomes the single source of truth for rate. Most accidental mix drift at small properties starts with a rate that reached three channels and not the fourth, which quietly made one channel the cheapest place to buy your room. Removing that failure mode does not improve your mix, but it stops it moving for reasons nobody chose.
The suggestion covers your base rate and the differential between room types. Approved rates publish through your existing channel setup, you approve every rate before it publishes, and ampliphi runs on top of the PMS you already use.
Key takeaways: distribution mix
- The share of room nights coming from each booking channel, expressed as percentages adding to 100.
- Count by room nights and by revenue. They give different answers and both are useful.
- The point of the metric is cost. Channels differ by 15 to 25 points in what they take.
- Ten points of volume moved from OTA to direct is worth roughly $26,000 a year at a 46-room property.
- It drifts on its own, toward whoever spends most on acquisition, unless somebody is watching.
- It cannot tell you which bookings were incremental, which is the question that decides whether a commission was worth paying.
Frequently asked questions about distribution mix
What is a good distribution mix for an independent hotel?
There is no target figure that applies across properties, and anyone quoting one is guessing.
What a healthy mix looks like depends on your market, your season, how much direct demand your location generates on its own and how much of your business is group or corporate. A city property with strong walk-up demand and a rural property that lives on weekend leisure should not have the same mix.
The useful question is not what number to aim for but whether your current mix was chosen or inherited. Most independents discover theirs drifted there. Set a target from your own baseline, move it a few points a year, and measure the cost saved rather than comparing yourself to an industry average that does not describe your property.
How do I calculate my distribution mix?
Export room nights by booking source for a trailing twelve months from your PMS or channel manager, group the sources into a handful of channels, and divide each by the total.
Two practical traps. The first is source mapping: properties routinely find that the same OTA appears under three different source codes, or that direct bookings taken by phone are logged as walk-in. Clean that once and the report is reliable from then on. The second is the reporting period. Anything shorter than a year will be read as a mix change when it is really a season.
Then repeat the exercise on revenue rather than room nights. The gap between the two views tells you which channels are buying you volume at a discount.
Should I reduce my OTA share?
Only if you can say what will replace it.
OTA exposure is a cost, but it is also distribution you are not otherwise buying. A property that cuts its OTA presence without first building direct demand trades commission for empty rooms, and empty rooms cost 100 percent of the rate rather than 17 percent of it.
The sequence that works is to build the direct channel first, measure whether it grows the total or just moves the same guests, and reduce OTA dependence afterwards. Reasonable steps are a booking engine that works properly on a phone, a visible reason to book direct within whatever your rate parity clauses permit, and keeping in touch with guests who have already stayed.
How much does my distribution mix actually cost me?
Calculate net ADR yield per channel, multiply each by that channel's room nights, and compare the total against what the same volume would have earned at your direct yield.
That difference is your annual distribution cost, and for most independents it is the largest line item nobody has ever totalled. At a 46-room property running a 54 percent OTA share, commission alone commonly runs past $150,000 a year.
The number is not a problem by itself, because some of that spend bought demand you would not have had. It becomes a decision once you can see it.
How often should I review my distribution mix?
Quarterly, on a trailing twelve-month basis.
Monthly review reads as noise, because a single group booking or a quiet week can move a share by several points at a small property. Annual review catches drift a year after it started, by which time the habit is established on both sides.
A quarterly look at the trailing year smooths the noise and still gives you three chances a year to notice a channel gaining ground. Pair it with the same session where you check net ADR yield, since the two answer each other's questions.
Related terms
Direct booking
A reservation made without an intermediary. The channel with the lowest acquisition cost and the one every mix strategy is ultimately trying to grow.
Net ADR yield
The rate you actually keep after commission and distribution costs. It converts a channel share into money, which is what makes distribution mix actionable rather than descriptive.
Channel manager
The software that pushes rates and availability out to your channels and pulls reservations back. It is where mix is measured and where the failures that distort it usually happen.
Rate parity
Offering the same room at the same rate across every channel. Parity breaks move mix, always toward whichever channel accidentally became the cheapest place to book.
GOPPAR
Gross operating profit per available room. Distribution cost is one of the biggest inputs, which is why a property can grow RevPAR for years while GOPPAR stands still.