Hotel distribution is a crucial element of revenue management, directly influencing room occupancy and overall revenue. With the evolution of digital technologies, distribution channels have become more complex and diversified. In this article, we will explore the main hotel distribution strategies and channels, providing insights on how to optimize booking management and maximize revenue.
What is Hotel Distribution?
Hotel distribution refers to the methods and channels used by hotels to sell their rooms. These channels can be direct, such as the hotel’s website, or indirect, such as online travel agencies (OTAs) and wholesalers. Effective hotel distribution management involves optimizing these channels to strike a balance between booking volume, distribution costs, and profit margins.
Main Distribution Channels
Direct Channels
Hotel Website
The hotel website is one of the most important direct distribution channels. It allows complete control over pricing, promotions, and the guest experience. Investing in a user-friendly, search-engine-optimized (SEO) and mobile-friendly website can significantly increase direct bookings.
Booking Engine
A booking engine integrated into the hotel’s website facilitates the booking process for guests. An effective booking engine should offer a smooth and intuitive experience, support multiple languages and currencies, and integrate with the Property Management System (PMS) and the Revenue Management System (RMS).
Call Center and Phone Reservations
Many guests prefer to book by phone. Having a well-equipped call center and trained staff to handle bookings and inquiries can improve the conversion of calls into actual reservations.
Indirect Channels
Online Travel Agencies (OTAs)
OTAs like Booking.com, Expedia, and Agoda are very popular distribution channels. They offer global visibility and attract a wide range of customers. However, the high commissions can reduce profit margins. It is important to balance bookings through OTAs with direct bookings to optimize revenue.
Wholesalers and Tour Operators
Wholesalers and tour operators purchase rooms in bulk at discounted rates and resell them through various channels. This can help ensure consistent occupancy, especially during low-demand periods. However, it’s essential to carefully manage rates and conditions to avoid cannibalizing direct sales.
Traditional Travel Agencies
Despite the growth of online bookings, traditional travel agencies still maintain a significant market share, especially for group travel and corporate bookings. Partnering with local and international travel agencies can increase hotel visibility and attract various customer segments.
Metasearch Channels
Metasearch sites like Google Hotel Ads, Trivago, and Kayak compare hotel rates across different OTAs and hotel websites. Using metasearch as part of your distribution strategy can increase visibility and direct bookings. It is important to monitor and optimize metasearch campaigns to ensure a positive return on investment.
Hotel Distribution Strategies
Channel Management
Channel Manager
A channel manager is a software tool that allows hotels to centrally manage the distribution of their rooms across various sales channels, such as OTAs, metasearch engines, wholesalers, and the hotel’s own website. This tool integrates with the hotel’s Property Management System (PMS) and Revenue Management System (RMS), ensuring that information is updated in real time across all platforms.
A channel manager allows dynamic rate management, adjusting prices in real time based on demand, competition, and other market factors. This flexibility maximizes revenue by capitalizing on opportunities to increase rates during high-demand periods and optimizing occupancy during low-demand periods.
By integrating with a wide range of distribution channels, a channel manager increases the visibility of the hotel’s offerings and the likelihood of receiving bookings. Being present on multiple booking platforms allows you to reach a broader and more diverse audience, improving the chances of filling rooms.