Online Travel Platforms’ Positive Impact on Profitability of Hotels

A 2022 study entitled “The Indirect Distribution Dilemma: Assessing the Financial Impact of Participation in Booking.com for Hotels,” published in the Tourism Review, explored how using Online Travel Agencies (OTAs) affects the profitability of Belgian hotels. Belgium was chosen for its unique legal requirement that all companies, including SMEs, publish detailed annual financial reports. The study focused on return on assets (ROA) to evaluate the net economic outcome of OTA participation.

The study showed that smaller hotels particularly benefited from an OTA arrangement. These properties, often owner-managed with limited marketing resources, gained broader market exposure through Booking.com. This wider distribution allowed them to find customers they would otherwise find difficult to reach, leading to revenue growth. The study noted, “The costs of doing so, traditionally perceived as prohibitive, increase at a slower rate than resulting revenues, leaving participating properties in a more favorable net position.”

The findings suggest listing on digital platforms significantly boosts the financial performance of hotels, leading to improved profitability.

This is an excerpt from the book, The Titans of Travel: How small businesses shape Europe's accommodation industry in 50 charts, the eBook is available to download for free.