Written by Adam Clarke
Distribution can seem complex. Online Travel Agents, Bed Banks, Wholesalers, Global Distribution Systems, Meta Search Providers, Offline Channels, Low-Yield Segmentation, High-Yield Segmentation - it is a lot to get your head around. However, a good distribution strategy is vitally important and inextricably tied to the success of your hotel.
Direct is best. The importance of your booking engine shouldn’t be understated. But unless you are a destination hotel of truly international standing, you might benefit from help appealing to a truly global audience. With distribution strategy, variety is very much the spice of life. Working with a diverse range of partners and platforms will enable your hotel to reach as many potential guests as possible. Those guests can generally be categorised as low or high yield. Low yield guests book further in advance, book all year round and are often driven by price. These types of guest will in many cases come from the GDS.
Global Distribution Systems or the GDS are the original sellers of availability. Created in the 1950’s by a collection of airlines to bring together flights, car rental, hotels and travel agencies. Whilst technology has advanced since the formation of the GDS, the premise hasn’t changed. Travel agents continue to use the GDS to access real-time availability of hotels. The biggest GDS providers are TravelPort, Amadeus and Sabre. Selling through one of these providers can bring enormous reach to your hotel but it can also be expensive.
Typically a hotel room is sold for 25-30% less via the GDS
High yield guests book their rooms closer to arrival, often paying higher prices as a consequence. These guests often come from your own booking engine and OTA’s. Online Travel Agents or OTA’s have been riding the crest of the internet wave. They were initially setup to enable guests to compare and book hotel rooms without the need for human interaction. The rise of OTA’s has been meteoric. Whilst some hoteliers take umbrage at the commission costs and perceived lack of flexibility, the truth is that OTA’s have democratised the hotel business. Independent hotels have a platform where they can compete for eyeballs with the large chains on an equal footing.
Whilst Booking.com is undeniably the market leader, nobody wants all of their eggs in one basket
You should work with a range of channels and consider what price you provide to them. Rate parity or a direct booking discount? You don’t only need to work with the major OTA’s like Booking.com, Expedia, Agoda and Airbnb. Niche and local suppliers can be an important part of your business mix. Running a gay bed and breakfast? Misterb&b are a key partner. Luxury 5 star independent hotel? Mr & Mrs Smith should be on your radar.
Independent hotels need a distribution strategy and a Channel Manager that support their strategy by offering a range of selling options and robust technology. They also need to work with a booking engine that converts. If you feel your current solution isn’t up to scratch, come and see why RoomRaccoon is the fastest growing all-in-one solution for independent hotels across the globe.