The management of room inventory on both a hotel’s brand
site and through contracted online travel agency partners is at the core of an effective
But according to a new analysis by Fornova, some hotels are
mishandling opportunities to drive occupancy and profitability, and the
problems are most pronounced during periods of low or high demand. Fornova provides tools for hotels to monitor and manage distribution.
The findings are based on data gathered from brand websites
and contracted OTAs for 7,600 properties around the world during a two-month
period beginning in September. In its report, Fornova says it calculated demand
as a function of room rate – when rates were below the median, it considered it
to be a low-demand period and when rates were higher than median it considered
it high demand.
The data shows that hotels are not allocating enough inventory
to OTAs during low-demand periods, which can result in those properties being
excluded from search results on those channels and potentially impacting the
ranking of those properties on adjacent stay dates.
Subscribe to our newsletter below
And the issue is most pronounced for last-minute searches of
three days or fewer. During that window, the percentage of hotels with at least
one allocation issue is 76%, compared to 48% of hotels in all other lead
At the other end of the spectrum – during sell-out periods –
Fornova found OTAs continuing to show availability when brands sites have no
availability, increasing the risk of overbookings. And again the problem is
most pronounced for bookings within three days of stay.
But the problems are concentrated in a small percentage of
hotels. On average across all chains, about 15% of the hotels within the chain contribute
to 50% of the allocation issues. And for availability issues, only 2%
contribute to 50% of the issues.
“Though relatively only a small percentage of the inventory
is affected by these issues - they can have a ripple effect,” says Fornova CEO Dori
“Poor allocation management can hurt hotel rankings on OTAs.
It also creates a poor guest experience, which can then impact brand perception
These issues of allocation and availability are
least pronounced for hotels in North America. Fornova found in less than 1% of
shops, North American hotels show no availability when their contracted OTAs show
rooms available. In contrast, hotels in both Europe and the Middle East have at
least twice as many sold-out dates on their brand websites when their
contracted OTAs are still selling rooms.