As technology continues to disrupt existing businesses and newer business models emerge, it is only imperative for hoteliers to leverage technology and maximise revenues via a mix of distribution channels. Needless to say, success of a hotel is largely the function of its distribution strategy By Zahid Memon
Book direct’ may be the mantra for every hoteliers, however the distribution landscape is far wider and complex. Direct channels (such as websites and contact centre) are more profitable and preferred however the intermediaries have their own merits. Technology is constantly re-shaping the distribution channels for hotels. Let’s look at various distribution channels and how they are powered by technology.
Direct channels The hotel website
Fondly known as brand.com, the hotel website is the hotels cost efficient, high yielding channel for selling rooms online. The website is an online shop which enables digital marketing and e-commerce. Hotel websites seamlessly connect with an internet booking engine and payment gateways which in turn enable the consumer to make bookings. A mobile-optimised website is crucial for the success of the brand.com as 70 per cent of travel related searches happens on a mobile device. Several techniques such as SEO, paid ads and social media channels can bring traffic to the website.
Omni channel contact
Traditional reservation centres are giving way to Omni channel contact centres. In addition to answering booking enquires via voice channel, consumer requests are also handled via email and chat. Such contact centres are technologically powered to identify consumers (new and repeat), record their preferences and offer personalised products. The cloud infrastructure and systems (cloud PMS, CRS) make it viable for hotels to have the contact centre either in-house, off-site or outsourced. The direct booking channels are also leveraged as the booking platform for the corporate bookers who book at contracted rates.
Online travel agents
Online travel agents (OTA) are third party e-commerce websites which cater to various travel related needs of a consumer i.e. flights, rooms, local transportation, tour packages. OTAs invest in technology such as SEO and digital marketing initiatives which makes them rank higher on search engine result pages (SERP) and get traffic to their websites. OTAs offer several deals and options across hotels for the consumer to choose from. They are a crucial source of business for hotels and operate on a commission basis.
Global distribution systems (GDS)
GDS are computerised reservation networks which offer a single point of access for booking flight seats, hotel rooms and travel services in real time and co-ordinated into one itinerary. The GDS was originally setup by the airlines which was soon extended to travel agents, hotel chains and car rentals. The GDS exposes the hotel to thousands of travel agents terminals and travel websites. Hotels have the opportunity to reach out to newer market segments through consortia programs and participating into online RFP bidding process over the GDS platform.
Metasearch engines connect with several booking sites (OTAs and hotel websites) across the internet and provide a list of best deals to the consumer to choose from based on their search criteria. The consumer can then select the best option and get directed to the online channel and complete the booking. Of late, meta-searches are offering ‘instant booking’ option to the consumer which may blur the difference between a meta-search and OTA.
Websites such as Kayak, Hipmunk, Trivago, TripAdvisor and Google Hotel Finder are examples of metasearch. With the number of indirect intermediaries in the online space ever increasing, managing rates, inventory and ensuring parity across channels can be a challenge. This is simplified by a channel manager software which connects with channels via web-services to offer a consolidated management console to distribute rates and
inventories. Modern-day consumers have more options to shop and book. Consumers cross over channels during their booking journey i.e. research on one channel and book on another on a different device.
Changing the consumer behaviour may be a daunting task. However, understanding the consumers shopping and booking preferences can assist in creating a channel distribution strategy thereby ensuring right inventory available, at the right channel at the right price.
(The author is IT director, Keys Hotels)