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Tips to a Profitable Hotel Distribution Strategy

As the hotel distribution landscape continues to evolve and complexities and costs grow, effective hotel distribution and pricing strategies are more important than ever.

Profit- Media by WiX
Profit- Media by WiX

Gone are the days when travel booking and reservations were only possible by visiting travel agencies or ordering by phone. Travel websites and mobile apps have been making digital travel arrangements increasingly easy.

Online Distribution: A game-changer for the accommodation providers Driven by e-commerce and review sites, online travel has revolutionized the hospitality industry. Globally online travel sales have been growing substantially.

For current day travelers, it is almost unthinkable not to be able to independently plan and book travel arrangements beforehand – many internet users appreciate the ability to create their own itineraries with the help of digital tools such as travel planning websites, price comparison websites or review portals, which frequently provide visitors with the option to directly book accommodation at listed locations. Shared spaces are commonplace in travel accommodation and Airbnb is here to stay and grow.

Social media has crept into every stage from travel; from inspiring to booking. Some surveys estimate that 22% of online bookings come via social channel [US only]. No longer a nice-to-have, presence on social media sites is must for every travel brand and properties of all sizes. To lay the foundation for success, make sure your strategy covers these areas:

1) Channel Management & Visibility Modern hoteliers are faced with the task of maximizing reach and visibility online at the lowest possible cost in a hyper competitive and constantly evolving booking environment. Increasing visibility is the key to success, but you don’t need to have deep pockets to do this. You can leverage the reach and marketing spend of OTAs (right channel mix) to increase your demand. A channel manager does more than help you stay on top on managing your channels. A data warehouse, it is a crucial tool to help you make informed distribution decisions.

2) Understanding your cost of acquisition By clearly understanding costs associated with every channel, including development, maintenance and commissions. NetRevPar is a good metric to understand costs.

3) Clearly defining your target audience so online distribution is more efficient. In order to run a successful property and effectively reach your guests (customer segments), you’ll need to find your target audience or market. It is important to understand who your guests are in order to provide relevant offers and guest experiences, and find the right channels to reach them.

4) Focusing on direct bookings Building attractive loyalty programmes to minimize dependence on channels that come with associated high commissions. A number of key trends will have an increased impact on your ability to drive direct hotel bookings. This includes the travelers’ shift to mobile, direct bookings facilitated through meta search engines, and the ever-growing importance of user-generated content and guest reviews. Make the booking step easy so guests book directly from you.

5) Your Website The most obvious online distribution channel for your hotel is your own website and this is also one of the most cost-effective marketing tools your business will have at its disposal. you will need an internet booking engine that supports a seamless direct booking. Done right, your website can be a powerful way to convert lookers into bookers – minus the commission.

6) Use a flexible daily rate option Keep a flexible daily rate option in order to maximize yield and increase your bottom line. You can even incentivize getting forward bookings now with flexible cancellation policies. Without your tech stack, including channel manager and PMS, your ability to manage this visibility and take forward bookings is greatly reduced.

7) Adopt a seasonal strategy Adopt a seasonal strategy and pay attention to all online reviews that come in. The only constant in the hotel industry is change – be as best prepared for it as you can by adopting the right tools and putting industry best practice into play. By carefully analyzing your revenue streams with the use of your channel manager’s comprehensive dashboard, your revenue manager can gain the insights needed to create the optimal online distribution strategy for your hotel.

8) Online Travel Agents Online travel sales have made online channels have quickly become the biggest and one of the most important sales channel for properties. Working with multiple online travel agencies can help increase a hotel’s digital distribution and overall occupancy. A successful OTA strategy comes from choosing partners who give you the best ROI – high reach, more bookings and low commissions.

This article has been taken from STAAH’s ebook on Understanding Hotel Distribution. To read the full content download the FREE E-book here.

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