Distribution Strategies

IN-DEPTH: Rather than offering special deals and discounts all over the place, hotels need to assess all the available distribution channels and the markets they will be reaching out to and need to plan a channel-specific approach that supports overall marketing and rate strategy, according to Patrick Andres, Vice President, Asia Pacific, Sabre Hospitailty Solutions.

Published: 20 Sep 2011

IN-DEPTH: Rather than offering special deals and discounts all over the place, hotels need to assess all the available distribution channels and the markets they will be reaching out to and need to plan a channel-specific approach that supports overall marketing and rate strategy, according to Patrick Andres, Vice President, Asia Pacific, Sabre Hospitailty Solutions.

By Ritesh Gupta

Different hotel distribution platforms cater to the need of different sets or groups of customers.

Hotels don’t have to make a decision between growing their direct channel and working with other channels. Rather they need to evaluate the costs and benefits associated with every channel they have the opportunity to distribute through.

It is ideal for suppliers to maintain a fine balance on going direct to consumers, as well as working with reliable channel partners. It is not necessary for hotels to work with every channel out there, but ideally build a partnership to ride the good and bad times together.

As far as the options are concerned, there are a lot of trends emerging that are challenging or augmenting the OTAs of today. There are more channels than ever to reach travel shoppers. The online channels travel shoppers use to research and book travel continues to grow.

There seems to be an appetite from consumers to always lap up special deals, discounts and special offers from these providers. It is very important though, for hotels not to fall into a trap of working with everybody and having discounts all over the place. It may prove too costly with all the heavy discounts and margins these players are requesting.

“As Online continues to be the fastest growing hotel distribution channel, I recommend to hoteliers that they evaluate their Internet marketing strategy and make sure it is geared at driving bookings at the hotel or chain level rather than through third parties,” recommends Patrick Andres, Vice President, Asia Pacific, Sabre Hospitailty Solutions, who is scheduled to speak at the forthcoming EyeforTravel’s Travel Distribution Summit India 2011, to be held in Mumbai (12-13 October) this year.

“Think more about PPC, SEO and an excellent website that was created not only to merchandise your property directly to your markets, but convert at every step of the way. Anyone who is not currently investing a large portion of their marketing dollars in these areas might look at reevaluating where these funds are allocated and at how they can better drive more revenue directly to you,” Andres told EyeforTravel’s Ritesh Gupta in an interview. Excerpts:

How do you think overall hoteliers are focusing on their websites as part of their online marketing and distribution strategy? For instance, a challenge hoteliers experience is how to effectively connect a website with a Facebook page. How can travel websites look at driving audience on their official websites and official social media pages/ accounts?

I hope that hoteliers are now thinking of their websites as the core of their online marketing and distribution strategy, and that their resource allocation reflects that. The trend that I see does point to the fact that the industry has woken up to the idea that there are numerous additional channels out there that the hotel can own, leverage and convert.

Facebook should be seen by hotels as not only a social media platform, but also a conversion platform. In the last year, Facebook has added enhancements allowing businesses to include the look and feel of their brand within their platform to essentially cojoin the shopping experience. Great news for hotels, and a new channel to drive bookings that you control yourself. The challenge you raise, that hoteliers experience difficulty in effectively connecting Facebook and other social media to their websites, is easily solved by using the help of Internet marketing professionals in hospitality. My team has been working with our customers to integrate the hotel booking engine within Facebook so that their guests can complete the entire booking process within Facebook. The first customers to take advantage of this realised their ROI within the first two weeks of going live. Now they have two very powerful booking channels that they own and control, that merchandise the many USPs of their product, and that work in tandem with each other to drive traffic to the hotel.

When it comes to OTAs, where hotels lose out with OTAs is not only in the sometimes tremendous commissions they pay, but also losing out on the opportunity to segment and better target their customers, as well as fully merchandise their properties from all angles. How can they make judicious use of the billboard effect and at the same leverage their own other channels?

The most important thing to remember, in order to take advantage of the “Billboard Effect” is to offer a consistent message across all channels so travellers are not confused about your brand promise. Many travellers, especially in the leisure market, will do research for up to 30 days before making a purchase. And, research shows that seeing your message over and over again can actually drive consumers to your own Website. Rate and Promotion parity are also important to consideracross all channels, with the difference being the way the message is delivered in each medium. The OTA’s are not going anywhere and can be a very valuable tool for hotels to not only sell rooms but to market their properties. Take advantage of the millions of dollars these OTA’s are already spending on marketing and make sure your property is presented in the best possible light. And, when they do make it to your own Website and booking engine, make sure they are seeing the same thing that they saw on the OTA site – don’t give them a reason to go back to the OTA to book.

How do assess the timing of Groupon-Expedia tie-up at this juncture especially considering that a flurry of private sale travel site that have hit the market over the past few months?

Local Buying/Social Buying is emerging as a fast growing channel for distressed inventory. However, the feedback is mixed as to the results. There are many factors for hoteliers to consider before jumping in: cost per promotion, target market reached, loyalty engendered, discount-seeking behavior this encourages. The Groupon-Expedia partnership opens huge possibilities especially if you can target your feeder markets, but it is something to enter into with your eyes wide open.

It seems there is an appetite from consumers to always lap up special deals, discounts and special offers from these providers. But do you think hotels are in danger of falling into a trap of working with everybody and having discounts all over the place? What do you recommend to hotels considering that so many options for flash sale initiatives are now available?

Creating a channel-specific strategy based on your market segment is the approach I usually recommend to hoteliers to take with any of these channels. There is definitely a value to some of these channels for our industry, so it is up to both the marketing and revenue managers at your property to determine –hopefully in tandem – when and which of these channels will help support your revenue goals, while also supporting your brand strategy. Any business is in danger of falling into the trap of working with everyone and offering discounts. Too much of this can damage your brand value, undersell your rooms, and ultimately drive your costs up. Understand these channels and the markets you will be reaching and plan a channel-specific approach that supports your overall marketing and rate strategy. Take the time to evaluate each step and use marketing resources to track promotional value both in the short and long term.