15 Feb 2018

Why a "less is more" approach to distribution can pay off

When it comes to managing distribution, it can seem counter-intuitive for hotels to adopt a ‘less is more’ strategy. However, if certain channels aren’t performing as effectively as others, it could be time to re-evaluate where your efforts would be better concentrated.

There’s no doubt that technology lies at the heart of this evaluation process, with the right systems helping hotels get a clearer picture of who their core customer is, which markets they come from and which channels they favour.

Direct bookings remain the holy grail for the hospitality industry, and having a strategy that helps guests understand how they can benefit from booking directly with your hotel is crucial. This is where hotels really need to help travellers understand the benefits of booking direct and social media is an increasingly important place to add value to the guest experience.

Knowing that flexible cancellation policies are often cited as a reason to book with OTAs, some of the biggest hotel groups have already begun to experiment with these to incentivise more direct bookings. Last summer InterContinental Hotels Group – whose brands include Holiday Inn, Crowne Plaza and Staybridge Suites - announced a 24-hour cancellation policy to create greater consistency across its properties.

However, with mobile increasingly relied on at every stage of the travel journey and over half (53%) of business travellers booking their hotel stays via a smartphone, there’s no denying the potential that third-party channels can bring.

Last-minute hotel booking apps such as Hotel Tonight and One Night – the boutique-focused rival created by the parent company of Standard Hotels – have attracted steady growth amongst those who place value ahead of brand loyalty. And with features that allow users to upgrade to suites for 50% less than the standard upgrade rate, it’s easy to see the attraction.

Other notable trends include an increasing demand for hotel alternatives, especially amongst younger travellers and those looking to stay for longer periods of time, whether for work assignments or simply to live like a local. With over 3 million listings, Airbnb already has more available ‘rooms’ than any hotel chain.

The growth of metasearch engines, such as Trivago and TripAdvisor, who attract new customers through high-profile marketing campaigns, also continues apace. By compiling rates from multiple booking sites including OTAs it’s easy to see the attraction for budget-conscious travellers who see them as the easiest way to secure the best deal. Whilst your hotel is unlikely to be able to compete with their advertising budgets, it’s important to control how you appear on these sites by managing your property profile and managing which rates they can promote.

Having the right revenue management tools in place will deliver instant access to real-time reports that allow you to track your performance across all channels and ensure you’re maximising how your hotel fits into changing OTA business models.

At the end of the day, it’s down to each property to determine the channel strategy that suits their business, location and customers. For some hotels, investing in OTA channels could help convert otherwise empty rooms into last-minute bookings, whilst would benefit from investing more in their direct channel.

With the travel distribution market currently evolving, it’s never been more important to keep abreast of which developments can have a direct influence on the way your customers book.

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