A case study on the benefits of an Affiliate program and how shifting just a small percentage of room nights to the direct channel drives a significant revenue increase.

1. Benefits of FIT Bookings
Converting an OTA Reservation to Direct Reservation
$225
$279
$75
$-
$50
$100
$150
$200
$250
$300
$350
Before (via OTA) After (with Affiliate
Program)
Agency Fee (2%)
Affiliate Commission (5%)
OTA Commission (25%)
Revenue to Hotel After
Expenses
 This hotel improves room profit by $54 (+24%) by moving a guest from an
OTA booking to the direct channel
*Assumes $150 ADR &
2 Night Stay, total
$300.
+$54 Hotel
Profit

2. Case Study:
Decreasing the OTA Channel from 30% to 20%
(125 room hotel, $105 RevPAR, $0 ancillary revenue, 30% EBITDA Margin.
Before = 30%* OTA Bookings; After = 20% OTA & +10% Direct Bookings via Affiliate Program)
($000’s)
Before
(OTA = 30%)
After
(OTA = 20%,
Direct =
+10%)
Impact Impact %
Revenue $4,791 $4,791 $0 0%
Expenses $3,353 $3,272 ($81) -2.4%
EBITDA $1,437 $1,519 +$81 5.7%
EBITA Margin 30% 31.7% 170bps
Asset Value $20,121 $21,161 +$1,140 5.7%
*Average Reliance on OTA’s is 32% of room notes per HSMAI. Rounded to 30% for simplicity.
• Assumes all OTA’s are on 25% commission. If converting from net rates, then the impact is even more beneficial
 At a 14x EBITDA multiple, the $81k annual savings generated from a 10%
channel shift from OTA to Direct is worth $1.14M in hotel asset value