Hotels have to be spot-on with their online distribution strategy because how the guest has made his booking can make a big difference to a hotel’s bottom line. Hoteliers have to focus on their operating efficiency via appropriate rate distribution management. The idea is to work out a channel mix to optimize maximum output with maximum profit. The focus is on cutting down distribution costs and improving the top line revenues by strengthening their marketing and distribution reach. The new fashions that are evolving, increased role of Channel Management Solution is a prominent factor for today’s revenue manager to succeed.
“Defining what inventory to sell where and at what price has become a critical step in running a profitable hotel business”
The emergence of Google and new startups coupled with the growth of mobile platform means hotels couldn’t be complacent in 2016 by simply relying on growth from existing partners. Instead, they have to plan for the future and start counting on relatively new distribution options. Those who did so are more likely to witness increased revenue flowing in and respond better to market needs in the coming years.
Listed below are a few tips for hoteliers to improve their online Hotel Channel Distribution:
1. Keep your target guest in mind, while designing your hotel channel distribution strategy
Hotels should focus on supporting channels based on the customer profile they want to target, e.g. Are you targeting the “price conscious” category, or you are looking to tap the customers looking for “best value” or some other category apart from these. Accordingly, design your strategy and budget for inventory distribution.
2. Work in partnership with your OTAs
Distribution through OTAs is usually the least profitable channel, but you cannot ignore the fact that it has great efficacy when it comes to reaching out to brand agnostic customers. Additionally, don’t overlook to quantify the ‘billboard’ effect by getting listed on third-party distributors’ sites. Keep your General Manager, Revenue Manager and other staff updated about new channels and strategies, as hotels can have more leverage if they are striving for the same goals and objectives.
3. Be watchful of mobile apps and social media
Mobile can now be clearly called the mainstream platform for booking, and social media is also picking up as a major distribution methodology.
Mobile App is gaining ground across the travel & hospitality space, driven by the stair step effect created by better smart mobile devices and enhanced mobile apps/mobile sites.
A big plus for travel is the increased ease of researching and booking on the go, which is needed given how often travel plans change on the fly. In this respect, hotels can adapt how some of the successful travel intermediaries are performing and operating.
As an e.g., consider the instance of Kayak’s mobile apps. It has been downloaded over 20 million times. Kayak’s 3Q app downloads and queries increased at a tremendous pace and its revenue per 1,000 mobile queries is $62, growing by 63% over Q3 last year. “For Kayak specifically, the growth rate is largely a function of a smaller baseline and that kind of growth is unsustainable long-term. Mobile’s currently lower RPM is likely to grow as consumers get more comfortable with a buying a broader range of travel on mobile devices,” says Lincoln Merrihew, managing director of Automotive and Travel at Compete
4. Last Minute deals on Mobile Platform
Many hotels are comfortable with offering last minute exclusive deals to third-party mobile platforms, but certain revenue management and distribution officials believe such practice can weaken the value proposition of the brand and their brand website, and other partner channels too.
Hotels need to take a call whether this can be a workable strategy. And if they decide to take a dive, then they would need to find ways to safeguard their brand and price integrity. Hotels need to gauge areas such as cancellations for mobile bookers in order to strengthen their rate and guarantee policies.
5. Don’t ignore the role of other channels like Google Hotel Finder & Room Key
Hotels can’t ignore the prowess of Google Hotel Finder as a traffic source amongst others like Room Key, etc. Important factors would be keeping a tab on CPC rates on Hotel Finder and how they are faring against Google AdWords keywords, plus how the click-to-book ratios are shaping up; what sort of impact the tool is going to have on the reliance of hotels on indirect distribution channels etc.
Any online search engine that directs booking traffic back to your own branded website is always advantageous. The value for guests is essentially more choice, much like what OTAs offers.
6. Last but not the least clasp innovation
Hotel companies need to shape up functionalities on their sites or partners with those who understand how customers are likely to book or what gets them going from the scratch for their booking. There has been a dialogue of selling experiences rather than just a room, talks about how does a consumer think and how can technology facilitate this to make their experience better and more convenient. So it entails coming up with an ingeniously designed search interface that lets a consumer get closer to a booking.
We hope this culmination of research and tips on distribution practices & landscape, and hotel performance based on the online distribution channel mix would help you define your distribution strategy. For more information, download our Ultimate Playbook to Select The Right Hotel Channel Manager. Happy Distributing!!!
