A good Distribution Strategy is key to ensuring success and keeping those rooms booked season after season. Whether you have a boutique hotel with only a couple of rooms or run a chain hotel, this issue has to be addressed for anyone looking to increase bookings and boost revenue. For anyone scratching their heads right now all you need to know is that a distribution strategy is the way in which you decide to market your hotel, more specifically, what channels you decide to use to do it.
There’s no denying that this is not an easy task. The sheer volume of channels available on a global scale is mind boggling and deciding which ones will work best overall is at the very least a challenge. Firstly, let’s talk about the two types of distribution channels available to a hotelier. Firstly we have indirect; these are the reservations booked through an intermediary such as Online Travel Agencies (OTAs), metasearch engines like Kayak or Trivago or Assisted Booking via the likes of Google and Trip Advisor. Through sites likes these you can take advantage of indirect marketing; for more information see our previous article Grow Your Business With the Billboard Effect.
The other distribution channel is direct, through your own website, and definitely the one you want to concentrate on as this is going to be the most profitable in the long run. To decide on the most appropriate strategy for your hotel you should start by establishing or defining the following criteria:
- Objectives: What are your rates, occupancy and revenue targets?
- Target markets: Identify guest segments and profiles.
- Responsibilities: How can you best work as a team with the staff responsible for creating and managing demand?
- Performance measurement: Which Channels are helping you to achieve your goals and which ones aren’t? Do some strategies need adjustment or are they working well?
- Data: Base your decisions more on your data than your gut. Use the information you have available to make a predictive analysis of market demand and competitive positioning, historical and real-time demand and traveller behaviour.
- Distribution channels: Which are the right ones to reach your target markets?
Indirect channels can certainly be an ally for your hotel but they need to be well managed and finding the best fit across the different types will usually be a case of trial and error. Without doubt direct bookings should be a top priority when it comes to your distribution strategy since it is the most profitable channel you can work with. With that in mind let’s focus on some advice to increase your effectiveness of this marketing tool.
Strategies for increasing direct booking:
- Optimize your website and booking engine, make sure they’re user-friendly, mobile friendly and search engine friendly.
- Book-direct campaigns – that means offering the best rates, discounts and incentives, special offers for social media followers, email subscribers or loyalty program members.
- Return guests are more profitable than new ones, so make sure you are doing something to make them come back. Give them reasons to return, give them reasons to book directly and reward their loyalty.
- Take control of inventory. You as the hotelier have control over which rooms you want to bid on each Channel and at what prices.
- Distribution tools. Take advantage of tools to help you understand market conditions, manage rates and inventory, analyze data and be efficient, such as your Property Management System (PMS), Google Analytics and Channel Manager.
We hope these tips will help you create an effective distribution strategy suited to the needs of your property, hopefully one that will help you to convert more direct bookings.