Distribution cost is everything a hotel pays to acquire bookings, including OTA commissions, GDS and channel fees, metasearch spend, booking engine costs and loyalty discounts. It is typically one of the largest controllable cost lines.
Measuring it per channel changes decisions. A channel with modest commission but heavy ancillary fees, or a direct channel loaded with advertising spend, may cost more than assumed. The useful figure is total acquisition cost as a share of revenue per channel.
The goal is not minimizing cost to zero, since cheap channels with no volume do not fill rooms. It is optimizing the mix, pushing incremental demand toward channels with the best net revenue after all costs, and remarketing to guests already acquired.
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