Gaining control of your hotel’s inventory distribution channels

Hotel business faces pressures on all fronts. Customers expect the world in terms of service, competition watches you very closely and demands keep fluctuating. To add to that, there are visibility challenges on the Internet and discounting and reference based leads end up affecting the margins on a consistent basis. All this while new competition keeps getting added in the city’s supply to furthe

Published: 01 Dec 2010

Hotel business faces pressures on all fronts. Customers expect the world in terms of service, competition watches you very closely and demands keep fluctuating. To add to that, there are visibility challenges on the Internet and discounting and reference based leads end up affecting the margins on a consistent basis. All this while new competition keeps getting added in the city’s supply to further correct room rates and dent your occupancy.

There is also a visible shift that is occurring where traditional travel agents and referral hotel reservations are giving way to hotel’s own website and the ability to reach out to an ever growing number of OTAs that should be tapped into, through distribution service providers.

Yogeesh Chandra, AVP Product Management at Rategain IT solutions, has highlighted business opportunities for hotels to stand out against competition.

Increase your reach on and through the web by:

1. Looking beyond traditional markets and sources of demand

To survive in this dynamic environment (Industry as well as the macroeconomic pressures), partnering with new sites to reach out to customers in new geographies (emerging markets for your city for example) is a logical solution to increase your visibility and revenue.

Market intelligence reports can be a good resource to keep an eye on which markets/countries have started giving business to your city and how well contracted are you with OTAs from that region.

Traditionally, reservation and revenue management resources dedicated to manage select few OTAs felt the constraint of managing all third party websites within limited time. Increasing resources may not have been a great idea as you were never sure if your new partners will start performing from day one but using a channel management solution is a suitable option.

2. Not putting all eggs in the same basket

Developing new income streams offers a strategic advantage to you over your competition while hedging your dependence on a small set of OTAs. Channel management solutions seem to provide the answer by helping you develop partnerships with new OTAs one doesn’t get to work with. In fact an established channel manager can be a good starting point to help you evaluate all the websites they work with and who you would like to partner with to increase your visibility and presence on the web.

You will witness the power of leverage by using the existing resources to manage far more number of OTAs. Since the subscription price beyond a certain number of OTAs remains unchanged, it offers you the opportunity to develop a long list of OTAs and use your presence on them to reach different geographies and demographics.

A simple example yields the fact that if you take your partnership portfolio from 20 to 40 (for which no extra startup fee or management effort is required) and even earn just one booking a month from your new websites you have now earned revenue that never existed for you that would not only go straight to your bottom line but also offer returns enough to pay for the channel management solution you have subscribed to (depending on the transaction value, calculated at an ADR of $200).

3. Enhancing the ‘billboard effect’

Once contracted with new OTA partners you should work closely with their market managers to improve your visibility on their sites.

It’s important to note that the billboard effect and word of mouth that will follow for your property will not only address the hoteliers drive to maximise visibility but will also generate revenues offline or through other channels.

It will thus help you bring the overall payout costs down through your new partners since they may not contract with them on high commission levels that the existing large OTAs in your space demand.

Managing electronic channels is not rocket science but can be overwhelming for sure if channel management tools are not used or the ones being used are not up to mark. A hotel company typically faces three main issues with electronic distribution:

1. Rate and product parity issues.

2. Content parity issues.

3. Visibility issues

Since selling effectively through electronic channels as a process is still evolving, in part II of this series we will cover some basic pointers to enhance your visibility and also help you improve your ‘looker to booker’ ratio( L2B) on OTAs.

Selling effectively

1. Visibility on the consumer’s search path

Is your hotel visible enough in a consumer’s search path. What are the organic rankings on key search engines?

If the rankings are not good enough, do you have an effective SEM program to counter this situation?

What’s your visibility on key OTAs and Travel Meta Search engines?

If your brand visibility is not there at least you must be visible on key booking sites across the web to come in the search path of a potential booker.

Is your enhanced visibility matching up to positive online reputation to ensure that customer feels confident enough to make a booking for your hotel?

How structured is your online reputation management process?

2. Avoid Commoditization

There is more to hotel rooms than price and so must be kept in mind while we present the product on various channels.

Each room type with hotel facilities must be given its due in terms of physicals and aesthetic descriptors to make the customer understand the offering and match their expectations accordingly.

3. Measure Awareness

How many customers search you by name on different OTAs?

Discuss the pent up demand experienced by your partner OTA for your own specific hotel property to measure how well your customers know you or want to come and stay with you and match it to your online visibility tools. It helps to ensure that the property is getting its due in terms of visibility at the right place amongst search engines, travel meta search engine and OTAs.

The results may be surprising and also revealing enough to devise an e-marketing plan or using the leverage to negotiate better contractual terms or free marketing opportunity with the same or other OTAs..

4. Increase visibility on high producing OTAs

Hotel e-DistributionA recent hotelmarketing.com report mentioned how Expedia sells most of its hotels rooms from the first results page and out of that a staggering 47% right from the top 5. It is important for you to ensure that you do not get penalized on rankings due to incorrect unavailability or price disparity.

While optimization is an algorithmic process there are some basics to ensure better visibility like room availability across different booking windows, rate parity, running specials on limited time offer and better value based deals. It surely pays off to cover important aspects that the optimization is engineered around for any OTA and following the guidelines to move up the ladder slowly but surely.

5. Get taken ‘Seriously’

hotel marketing strategyYou may have done everything well enough to deserve a place on the first page and still not gotten your due.

Measure your rankings over a period of time and against availability and parity criteria to report any indifference to the OTA.

A consistent endeavor from your side to gain visibility backed by fulfillment of their main criteria may help your rankings.

Regular meetings with market managers are very helpful and they do provide important tips to optimize performance on their platform.

6. Responsible Discounting

DiscountingSelling on opaque channels over valley periods will offer you occupancy while not putting traditional channels of sales under any pressure.

Thus, the hotel must have day on day forecast based strategy to optimize through opaque channels

7. Multilingual Website / Booking Engine

MultilingualYour booking engine should connect with your target audience with all your important source markets and presenting relevant information with multi language options will just help in being more approachable, presentable and easy to book.

The revenue and distribution resource needs to exercise caution in terms of devoting time in an efficient manner else it’s very easy to get caught in day to day non issues and that comes at the cost of missing out on sales through your electronic channels.

(The article has been contributed by Yogeesh Chandra, AVP Product Management at Rategain IT solutions).

 
 
 

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