Maximising hotel revenue through effective sales channel distribution
August 13, 2024
A robust sales distribution strategy is indispensable for hotels striving to maximise revenue and drive direct bookings. By leveraging a diverse array of channels, hotels can amplify their visibility, target high-value guests, mitigate the impact of seasonality, and foster direct booking growth.In the ever growing online marketplace, the guest has a lot of choices to make. From searching to booking, guests are influenced by an average of 38 websites before making a reservation. Therefore, ensuring it’s easy for guests to book, whether direct or through third parties, is paramount to fulfilling a successful occupancy strategy and higher Average Daily Rate (ADR) goal.
Today, hotels must maximise visibility to travellers and central to this strategy is the ability to harness the power of different channels to capture the right guest profile. Hotels should use a matrix of channels where each channel serves a unique purpose in driving bookings and revenue through exposure to wide and targeted audiences, simultaneously maximising signposts to your own website, where possible, for direct bookings.
The Billboard Effect: navigating third-party providers
Hotels, irrespective of size or stature, need to extend their reach beyond their direct channels. A popular and cost-effective way to optimise this visibility is to leverage the Billboard Effect – where hotels can advertise for free on third-party websites, like Online Travel Agencies (OTAs) and metasearch platforms.
OTAs can drive booking volume, albeit at a high cost of acquisition (which can range from 15 – 30% commission), or hotels can maximise revenue by working with select niche partners to drive quality reservations.
Research has found the more visible your hotel is online, the more likely someone is to book it – both directly or via an OTA. For nearly 15 years, travellers have often been found to initiate their search on OTAs before exploring direct booking options; a Cornell University study found 65% of guests who booked directly on a hotel’s website had visited an OTA prior to booking. By having a strategic partnership with third-party channels – including well-known brands like Booking.com or Expedia – hotels can significantly boost their number of bookings.
It is crucial that hotels closely manage distribution of rates and inventory to prevent revenue loss, overbooking, or increased fees from third-party channels. With correct and competitive rates across all channels, hotels present a positive image of their property wherever a guest may find it.
Tailoring channels to target high-value guests
Collaborating with channels that align with a hotel’s target guest profile ensures a more tailored approach.
Niche channels can be particularly effective in this regard, leveraging lifestyle choices and brand affinities to attract specific guest segments. For instance, a boutique hotel catering to four-legged travellers might find value in partnering with dog-friendly travel platforms such as Pets Pyjamas, while a resort in the UK may want to collaborate with UK travel expert Snaptrip.
Seasonality and diversification
The hospitality industry is inherently seasonal, with demand fluctuating throughout the year. Diversifying distribution channels becomes imperative to mitigate the impact of seasonality and generate demand during quieter periods.
Through the utilisation of Revenue Management Systems (RMS) and Business Intelligence (BI) tools, hotels can spot the trends and patterns in booking behaviour and identify the type of high-value guest to target, constantly adapting their distribution strategy based on live booking performance. By spreading reach across multiple relevant channels, hotels can tap into varied market segments and capture demand that might otherwise be lost during off-peak seasons.
The role of metasearch in driving direct bookings
Metasearch platforms play a pivotal role in the hotel distribution landscape, offering travellers a convenient platform to compare prices across multiple channels. Ensuring visibility on metasearch platforms is essential for hotels, as it fosters fair price comparison and encourages direct bookings.
By maintaining rate clarity (not to be mistaken for rate parity – as you may wish to sell slightly higher on some channels to offset commissions payable) across all channels, hotels instil confidence in guests, and can reinforce the value proposition of booking directly through value-adds such as room upgrade or in-room amenity gift upon arrival.
All metasearch sites, as well as other online tools such as Google Maps and TripAdvisor, should be optimised to build authority in your hotel – and to drive direct traffic to your hotel’s website.
Rate and inventory management: connecting the dots
Effective distribution goes beyond mere visibility; it hinges on precise rate and inventory management. Integrating the hotel’s booking engine with distribution channels ensures accurate pricing and inventory allocation, while safeguarding against anti-competitive practices. As a leading provider of hospitality solutions, we offer comprehensive tools to help hotels streamline rate and inventory distribution, empowering hotels to optimise revenue across all channels seamlessly.
Online visibility leads to occupancy. But filling your hotel needs to be done smartly – through the right balance of channels that target the right guest profile for your business – that, ultimately, will improve revenue.
With the right tools and partnerships found in our hotel technology solutions, hotels like yours can provide the end-to-end digital guest experience, while navigating the complex distribution landscape to emerge as frontrunners in the competitive hospitality industry.
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This post originally appeared on the Guestline blog here and is reproduced with their permission.
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