Hotel Distribution Simplified
In the light of the numerous hotel management and hotel opening articles we have posted, and also the free revenue management book we created, we have come to realize that it’s nothing but logical to also write a book about hotel distribution.
Distribution is crucial to the success of your hotel. I am even tempted to think that distribution is more important than anything else in your business. Here’s the reason: no matter how brilliant your hotel or your product is, that you’re trying to sell. No matter how smart your marketing is. No matter how unique your service and location are. If you’re not able to effectively sell your product to consumers, your business will fail. If the money doesn’t come in, if you’re not able to create a healthy top-line income, your business will fail eventually.
Before we get into more details on how to distribute your hotel rooms, let’s attempt to distinguish sales from distribution. I’d like to separate the action of you completing a direct sale, from a third party completing a transaction for your hotel. Sales I prefer to use when you actually execute the sale. Distribution, on the other hand, is equal to the sum of all sales for your property and services, both direct sales and indirect sales, via any channel.
Who’s involved in distribution then?
Given the importance of distribution, when did you last stop for a moment, to take one step back and think about which members of your team truly contribute to the success of your distribution? Obviously all your commercial departments are involved; marketing, sales, reservations, revenue management. And what about your front-of-house staff, your engineers, security, all F&B departments, and housekeeping department? Nowadays their work directly affects consumer reviews and thus link into a successful distribution strategy of your hotel.
Therefore, if distribution is that crucial, and everything you and your team do deeply impacts the success of your hotel, it’s time to stop scratching the surface. It is time to take a deep dive into the world of hotel distribution. It’s time to take control of the success of your business.
In a number of blog posts we will cover different types of distributors. We’ll cover numerous technologies and distribution tactics. We’ll look at the interest of different parties in this global game of selling hotel rooms and other services. Along the way we’ll cross consumer interests, distributor interests, and of course hotelier interests.
Before we dig deep into the subject, we need to realize that we’re going to approach a very complex environment. If I’d start drawing up a complete chart with all possible ways a consumer can get to your hotel and book a room, I can literally fill a soccer field with thee possibilities, and still not be close to done.
In other words, once consumers reach you, directly or indirectly, they’ve already been through a complex maze of searches, options and decisions, to find you and to book a room with you.
If you want to get an idea of how many exact searches lead to your hotel, type your hotel name between into Google search, i.e. “Hotel Ribera de Triana in Seville”
This will only get you a limited idea of how many searches can finally lead to your hotel. This was nothing but an exact branded search for your hotel, in 1 language. Consider the general, non-branded search and you’ll realize that there are millions of other ways to search, research and book travel.
This general, non-branded, average consumer search could look something like this:
On each of these channels, the consumer chooses his own path to potentially make a reservation for your hotel.
A simplified view of hotel distribution
Trying to explain distribution by diving into the complexity is probably not going to get me or you very far. So instead of considering the complexity, let’s try to figure out a simplified distribution landscape.
So please forget about all marketing and sales channels, forget about technologies. Forget about search. Put your distribution strategies aside for a moment. How would you divide the distribution landscape when explaining it to a future employee, who has never set foot in a hotel? How simple can you make it?
I came to a division of the landscape into 4 basic areas:
1. Direct Online
2. Direct Offline
3. Indirect Online
4. Indirect Offline
As the borders between offline and online distribution often cross, we will not stand still at how we could further divide distribution for now.
We are just going to close our first chapter at this conclusion; hotel distribution is simple, if you want it to be.
Next week we will have a look at our consumers and some of their reasons to choose your hotel.
To learn more about our services, click here: Hotel Management Company
Remko West @ Xotels