Velocity Ventures, which invests in travel and tourism businesses, has called out a new reality where independent hotels are facing greater distribution challenges.
Speaking at ITB Asia in Singapore last week, Abizer Lashkari, analyst at Velocity Ventures, noted that hotel distribution now requires “staying visible in a world where attention is fragmented and competition is global”.
“Distribution isn’t just about selling rooms anymore,” he remarked.
While OTAs remain indispensable, powering nearly half of hotel bookings worldwide, they draw 15 to 25 per cent commissions, which bite into hotel margins.
Yet, hotels cannot afford to walk away, as the benefit is “reach, trust, and convenience”.
The future, Lashkari argued, demands that independent hotels rebalance their relationship with OTAs by embracing smarter, data-driven tools.
The second challenge Lashkari highlighted is fragmented technology stacks: 62 per cent of hotels still juggle disconnected systems for bookings, revenue, and guest management. Those that have made the leap to cloud-based, AI-enabled solutions are already seeing operational efficiency jump by up to 30 per cent.
The last challenge identified was the loyalty gap. Boutique hotels might not be able to compete with the likes of giant programmes Marriott Bonvoy and Hilton Honours, which comes with millions of members.
“Most independents rely on OTAs for new bookings, which means they never truly capture their guest. Once that state ends, will the relationship too?” questioned Lashkari.
On a positive note, he sees change coming fast, with AI-driven pricing, predictive analytics, and social media commerce rewriting the playbook. Emerging startups are helping boutique hotels harness AI-driven pricing tools that boost revenue by up to 30 per cent, and predictive analytics that anticipate demand before guests even start searching.
The rise of “embedded commerce”, where banks, airlines, and even super apps like Grab now sell travel, is redrawing the distribution map. Meanwhile, social media continues to drive inspiration and bookings in real time.
For small hotel players, Lashkari said the answer lies not in going at it alone, but to connect smarter by partnering strategically, integrating systems, and owning first-party data to build direct loyalty.
