If you want to gain a competitive edge in today's fragmented marketplace, you need to implement a diverse hotel distribution strategy that needs to be balanced to be effective. But creating such distribution strategy in this highly competitive, rapidly changing environment can be a challenging task.
What is a hotel distribution strategy?
A hotel distribution strategy is a plan to sell rooms at a profit through various direct (hotel website) and indirect channels (OTAs, GDS, etc.). Your hotel distribution strategy has to do thesethree things:
- Target the right customer segment of travellers to ensure positive reviews
- Increase visibility to increase occupancy rates
- Maximize profits to ensure financial health
A balanced mix of channels can help you gain a competitive edge and push your hotel business towards growth.
Read on to know more about the different types of hotel distribution channels and how you can build an effective hotel distribution strategy around them.
What are the Different Types of Hotel Distribution Channels?
Your hotel website is the only online distribution channel that allows you to sell directly to travellers. You can maximize this channel's performance by designing a user-friendly hotel website that loads quickly, is easy to use across devices, and offers streamlined and safe booking experience for guests. OTAs(Online Travel Agencies)
OTAs are third-party sites where hotels can list their rooms for sale. As an online distribution channel, OTAs have the ability to attract travellers and get bookings done. However, for each booking that is made, the OTA takes a commission, which can be as high as 20% of the booking price. Tour Operators
Tour operators focus on delivering an end-to-end travel experience for consumers. They sell combined packages (usually discounted) that include flights, hotels, meals, guides and leisure activities either directly or through wholesalers and OTAs. GDS(Hotel Distribution Channel)
Travel agents primarily use a GDS to reserve flight, hotel or car for their clients. As a distribution channel, GDS creates broad global exposure for your inventory and helps you fill last-minute vacancies. It allows you to keep your listing updated across all networks through one interface. They charge a one-time setup fee and also take a commission or flat fee per booking. Meta Search Ads
Metasearch engines play a vital role in the guest booking journey today. A good hotel metasearch platform assesses the hotel-specific needs of both hoteliers and travellers. The best property management system for you will allow you to track all your channels' key performance metrics and connect you to big players in the metasearch field. Monitoring your metrics will help you determine which channels are performing well and which ones are not. Booking Engine
A website's booking engine is a software that captures online bookings. With many travellers making their accommodation bookings online, even the smallest hotels should not ignore the need for an online booking engine. Channel Manager
To ensure that your hotel's sales process is at its highest potential, you need a channel manager integrated system
. The hotel channel manager tracks your room inventory and rates and then updates all sales channels on its own.
How to Create a Distribution Strategy?
A successful distribution should have the right balance of all the channels you use. Today's travellers prefer searching and booking hotel stays online. So offline methods such as emails, walk-ins, or telephone are not probably as effective and may not require as much attention as before.
Another factor to consider while creating a distribution strategy is you need to have a sustainable way to track, record, measure, share and update data.
Also, your hotel distribution strategy needs to appeal to a diverse range of travellers across the globe. You will then be able to increase your bookings and earn more profits per guests.
While building your hotel distribution strategy ensure that:
- You have clear business objectives
- You are targeting your best guests
- You understand your key performance metrics that lead to profitability
- You maintain competitive rates
- You continuously monitor and optimize your distribution channels
Tips on Building a Hotel Distribution Strategy
- Target guests by market segmentation:
Divide your potential guests into groups based on a set of common characteristics. Focus your efforts on the key customer segments that have needs closely matching the product and services you offer.
- Tie up with local events:
Whether you are a small hotel business or a large hotel with an expansive property, you can attract local guests to allow yourself to earn extra revenue.
Consider hosting events such as wine tasting, game night, etc. at your hotel or tie-up with your town/city's local events. When you schedule, host or associate with local events, you create a buzz about your brand within the community and boost revenue.
- Target local audience for staycations
Travellers aren't opposed to the idea of discovering their own regions. So encourage them for domestic travel and target locals for staycations.
- Manage your content on social media
Social media platforms have become the Holy Grail of the marketing world. Use platforms like Facebook, LinkedIn, Twitter, Instagram, and Pinterest to engage your guests and boost loyalty and brand awareness.
- Highlight your hotel's USP on social media posts.
- Write blogs on your website and share them on your social media channels.
- Support your online content with visual elements of high-quality photos and videos of your property, service, amenities, employees and your customers.
The distribution mix you choose for your hotel has a significant impact on your revenue management strategy, and overall success – so, be smart about it. And always ensure that your hotel distribution channels are updated, and the information on your OTA profiles is correct.