When it comes to hotel performance, RevPAR (Revenue per Available Room) is one of the most important metrics to track. But if you’re only looking at your room rates or occupancy levels, you might be missing a crucial factor: your channel mix.
Your channel mix—how your bookings are distributed across direct channels, OTAs (like Booking.com or Expedia), metasearch, corporate, and others—plays a huge role in determining your overall profitability and RevPAR. Let’s dive into how it affects your bottom line and what you can do to make it work in your favour.
What Is Channel Mix in the Hotel Industry?
Your channel mix refers to the different platforms or sources through which guests book their stay at your hotel. Common examples include:
- Direct bookings (via your website or over the phone)
- Online Travel Agents (OTAs) like Booking.com, Airbnb, Expedia
- Metasearch engines like Google Hotel Ads or Trivago
- Wholesalers
- Corporate and GDS bookings
- Walk-ins
Each channel comes with its own cost, commission structure, and potential for profitability. A healthy mix can boost your occupancy and revenue. An unbalanced one? It can silently eat into your margins.
How Channel Mix Affects RevPAR
RevPAR is calculated as:
Revenue per Available Room = Total Room Revenue / Total Available Rooms
Or:
RevPAR = ADR (Average Daily Rate) × Occupancy Rate
While channel mix doesn’t feature directly in this equation, it influences both ADR and occupancy—the two variables that do.
You can calculate your RevPAR using our free hotel RevPAR calculator.
Let’s look at a few examples:
- High OTA reliance: These bookings may fill rooms, boosting occupancy, but the commission fees cut into your actual revenue—lowering ADR and ultimately your RevPAR.
- More direct bookings: These usually carry lower acquisition costs, so the revenue is more “pure profit.” A high direct booking ratio improves your net RevPAR (what you actually get to keep).
- Discount-heavy wholesaler bookings: These can keep your property busy but significantly reduce your ADR, dragging down your RevPAR.
In short: channel mix affects how much you earn per room—even if the room is full.
Why a Balanced Channel Mix Matters
A strong, diversified channel mix gives you:
- Better profitability: More direct bookings = less commission loss.
- Risk reduction: Relying too much on one channel (like Booking.com) is risky if they change policies, increase fees, or go down.
- More control: Direct bookings give you more power over the guest relationship, pricing, and upsells.
- Improved RevPAR: When you optimise toward high-ADR, low-cost channels, you’ll see a direct uplift in your RevPAR.
How to Improve Your Channel Mix (and Your RevPAR)
Use a Channel Manager to Diversify Smartly
With a good channel manager, you can list across multiple platforms without the risk of overbookings. This means you can increase visibility without hurting your operations.
Example: A small boutique hotel uses a channel manager to list on Booking.com, Airbnb, and Agoda. While OTA bookings rise, the hotel uses its direct booking engine to capture repeat guests at lower cost.
Tip: Tools like Preno’s built-in channel manager make this process seamless—integrating real-time inventory updates and automated rate adjustments across all platforms.
Prioritise Direct Bookings with a High-Converting Website
Your website should be optimised to convert traffic into bookings. This means fast load times, mobile responsiveness, trust signals, and an easy-to-use booking engine.
Example: A guest finds your property on Expedia, then searches your name and lands on your website. If your booking process is smoother (and offers a small perk like free breakfast), they’ll book directly—saving you commission and increasing RevPAR.
Analyse Channel Performance Regularly
Don’t just set and forget. Check how each channel is performing monthly or quarterly. Look at:
- Conversion rates
- Cancellation rates
- Commissions paid
- ADR by channel
This data helps you make informed decisions—whether to drop a channel, shift your rate strategy, or invest in direct marketing.
Implement Dynamic Pricing
With a smart pricing tool or revenue management system, you can tailor rates by channel and optimise for high-value bookings.
Example: You might offer slightly higher rates on OTAs to offset commissions while offering an exclusive deal on your own site to boost direct bookings. This drives your ADR up while maintaining occupancy—raising your RevPAR overall.
Bonus tip: Preno’s dynamic pricing tools make this easy, helping you adjust rates automatically based on demand, channel, and seasonality.
Optimise Your Channel Mix, Maximise Your RevPAR
Channel mix isn’t just a marketing metric—it’s a profitability lever. If your RevPAR isn’t where it should be, it’s worth taking a hard look at where your bookings are coming from.
The goal isn’t to cut off OTAs entirely—they play an important role in visibility and reach. But balancing your channel mix and nudging more guests toward direct, high-ADR, low-cost channels will help you grow sustainably.
Ready to optimise your channel mix and increase RevPAR?
Try Preno’s all-in-one hotel management software with built-in channel manager, booking engine, and dynamic pricing tools. Start your free trial today.
