How Can a Unified Distribution Strategy Help Hotels Optimize Room Inventory?

When you start investing your money, the first thing a financial adviser should tell you is not to put all your eggs in one basket. You should diversify your asset portfolio so that if one investment fails or underperforms, you won’t lose all your money. The same applies to a hotel’s distribution strategy. If you put all your eggs in one basket – in this case a single channel – you risk losing a huge chunk of your revenue.

The Value of a Multi-Channel Distribution Strategy

Many hoteliers rely mainly on online travel agencies (OTAs) because they are proven booking-generation resources. Using a single booking channel is risky, though. If something goes wrong, you could lose your entire marketing platform.

The solution is to spread out your marketing efforts over as many channels as possible, which will make generating bookings easier and reduce the cost per booking, thereby improving the bottom line.

The Challenges of a Multi-Channel Distribution Strategy

When using multiple booking channels, managing room inventory can be complicated, especially if everything is being done manually, as errors are more likely to occur. This leads to another problem – that of manpower. Small and mid-sized hotels might not have the resources or manpower to manage multiple booking channels.

Another issue is rate parity. Hoteliers need to ensure they maintain rate parity across all their distribution channels, which can be a serious challenge. When rates are updated, they need to be updated across all channels, virtually at the same time. A single mistake can lead to disastrous consequences, affecting your image and your bottom line.

Implement a Unified Distribution Strategy to Eliminate Challenges

A unified distribution strategy relies on an automated system that will keep track of room inventory, regardless of the source of the reservation. This way, hoteliers can pool their rooms and create a single inventory, thereby eliminating double bookings and ensuring all rooms can be sold for the best price.

At the heart of an effective unified distribution strategy lies a property management software (PMS). This type of software ensures that all your channels are communicating with each other (including offline ones) because it centralizes all your room information on one system, offering real-time updates and significantly reducing the risk of error.

In essence, it combines all channels into one, at least from an operational standpoint. Thus, a hotel can distribute rates, packages, and deals across all channels at the same time, without having to manually update individual platforms.

A PMS also ensures that you aren’t relying on a single channel because it eliminates the need for additional manpower to run individual channels. Furthermore, things like cancellations and overbookings are no longer issues. For example, if a cancellation is made on one channel, that room immediately becomes a selling opportunity on all other channels, and, thanks to the pooled inventory being managed automatically, you are better able to maximize occupancy.

To really make your multi-channel marketing work effectively, you need to analyze which channels are performing best and increase your spending in those areas, while reducing or eliminating those channels that aren’t performing. A PMS can help you do that because it can generate reports of the performance of each channel, room occupancy trends, and more.

Rooms are your product, and a poorly managed inventory can cause you to lose business. This can also happen if you stick to a single marketing channel, like OTAs. If you really want to optimize your room inventory, then you need to take a multi-channel approach based on a unified distribution strategy. This way your room inventory will be managed effectively, booking costs will be reduced, and your bottom line will improve significantly.