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May 2019, London
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7 Ways for hotels to take back control of distribution
New technologies are helping hotels to innovate and drive more direct business, finds a recent EyeforTravel white paper
EyeforTravel’s recent State of the Industry survey revealed that 34% of respondents are worried about large OTAs, which have much deeper pockets, owning the customer. Increasingly, however, hotels are showing their teeth. In a recent white paper from EyeforTravel – Dirty Distribution Tactics and how Hotels are Fighting Back - Gopakumar Menon, VP – Distribution & Revenue Management, Highgate Hotels says: “We are making them aware that just as they are watching us, we are also watching them. We are letting the OTAs know that we are as serious as they are and our direct business is very important.”
NH Hotels, which also contributed to the white paper, means business too. “Getting our distribution strategy under control is a major priority for our business right now, and we are experimenting and testing various techniques to see what works,” says Maite Aguilar, the group’s VP of distribution.
Top tips include to:
- Revise all contracts, pricing and terms and conditions: There is no point fighting the battle once it is done, so it’s crucial to get it right at the outset. Send out an addendum that specifies exactly which keywords can and can’t be bid on. Some hotels are also rethinking the competitive rates they give to channel partners, so they have less margin to play with.
- Notify partners when they are breaching agreements: This requires resources but repeatedly and consistently alerting market managers about any violation will pay off. In Highgate’s case this has been “phenomenally successful”. Sometimes, hotels even need to ruthlessly close channels that are not playing ball.
- Track where repeat bookings originate and educate the customer: The reality is that the OTAs have been successful in driving customer loyalty. However, campaign’s like Hilton’s ‘stop clicking around campaign’ have helped to raise consumer awareness. Even so, hotels need to track repeat cases of guests booking on OTAs and show them the benefit of direct booking.
- Rethink wholesale relationships: In major cities, Menon believes that it is only a matter of time before wholesalers will fall away, and Highgate has already reduced its relationships in these areas. The exception is destinations in Africa, where trips can be more complicated and involve everything from having the right vaccinations to booking a safari, or seasonal places like the Canary Islands.
- Switch from static to dynamic rates but keep your eyes open: Many hotels, like NH, have already shifted wholesale contracts from static to dynamic rate agreements. However, even then, partners need to be closely monitored to ensure they aren’t unethically playing with margin to pass on discounts to the end customer.
- Stop doing RM on the back of a napkin: Today a very small number of hotels (Menon estimates about 5%) are using RM systems. Brands should invest in automation of RM and pricing and purely focus on distribution and cost management. Decide what to do in-house and what to outsource but stay relevant. In the hotel space, pricing and distribution automation is highly relevant. Investments in big data, and systems to consolidate data from all channels should, if they aren’t already, be a focus, as is a strong algorithmic approach.Intelligence is now available to understand who isn’t playing ball – use it.
- Don’t undervalue face-to-face interaction: Hotels have the guest under their own roof for three to four nights, so this is an opportunity to connect face-to-face interaction. Step back and drill the front-of-house team to educate guests about the value of booking directly.
Read the full whitepaper which includes insights from Highgate Hotels, NH Hotels, Wyndham Hotels & Resorts, Rough Guides, Civitatis and CarTrawler