As a hotel owner, distribution can truly be a daunting challenge. How should hotels distribute their properties? How much should they spend on marketing their property? Should they focus on OTA’s or direct selling? And after all these questions have been answered, how do you toggle room inventory across the numerous distribution channels?
Well to simplify things for you, hotel distribution doesn’t have to be so complicated. There are 3 main online distribution channels that hotels need to evaluate: websites, GDS and OTAs. For hotels to retain customers and generate new bookings, these are the three main online distribution channels that they should focus on.
Hoteliers can measure how effective each of these channels are for them by calculating the customer acquisition costs (CAC) and customer lifetime value cost(CLV) for each channel. Distribution channels should then be optimized by focusing on the channels which provide the best possible yield for the hotel (i.e. lowest CAC and highest CLV).
The Hotel Website:
Hotel websites are an extremely powerful distribution tool. The website has to be marketed well and also should be easy to navigate and use. The website should have relevant, engaging and accurate information.Direct booking via a website enables a hotel to interact with their guests on a one to one base and offer a more personalised service to them. It also allows the hotel to collate data regarding their guests which helps them finesse their marketing plans based on demographics, preferences, behaviours etc. Hotels should provide lucrative incentives to their guests to book directly with them to drive website bookings.
In this day and age it is imperative that hotels invest a mobile version of their website since a majority of bookings nowadays are done via a Smartphone. Guests should not have an excuse to deviate away from the hotels website because of a slower process.
Invest in online marketing and SEO’s and aim to achieve higher conversion booking rates.
Global Distribution Systems (GDS)
GDS increases the global exposure of a hotel and can be a major source of business for them. Hotels should just ensure that they keep a track on the effectiveness of GDS for their property.
Data mining via the GDS providers enables them to maximize their bookings by evaluating the popular seasons, time of bookings, and demographics.
Hotels should just ensure that the data and information provided to the GDS is accurate and constantly updated and they can reward agencies that deliver consistent business to the hotel. Thsi can ensure that the hotel receives consistent bookings via this channel.
Online Travel Agents
OTA’s also increase the marketing exposure for a hotel, but in turn it can be the highest cost for hotels since the commission structure can range from 15 to 30 % of revenues generated.
Hotels should evaluate the commission structures of the various OTA’s and see which works best for their property, higher commissions need not mean higher expenses especially if that OTA can generate better business for the property.
OTA’s can be a lucrative channel for hotels; they should just manage them well.
Hotels should just ensure that their hotel data is accurate and that their room inventory is regularly updated so as to avoid double bookings or loss of room nights.
A hotel’s website generally offers the best yield for a hotel but that doesn’t mean that OTA’s and GDS should be scrapped as a mode of distribution. OTA’s and GDS enable hotels to reach out to a much larger marketplace and increase the online visibility of a property.
But does managing 3 channels still seem a little overwhelming? The best and most effective option for a hotel would be to invest in an effective PMS with an integrated distribution channel. This would completely simplify distribution for a hotel. From a single dashboard, a hotel can manage the numerous distribution channels. Tariffs, room inventory, hotel information can be regularly updated and that too in real time across all the channels via one platform only. Hotels can maximise their profit as well as their online global presence via an integrated distribution system and thus get the best of all 3 worlds.