8. How to analyse hotel distribution channels and their impact

Distribution channels play a critical role in reaching potential guests and driving bookings. Evaluate the performance of online travel agencies (OTAs), wholesalers, tour operators, global distribution systems (GDS) alongside direct booking channels like the brand website and call centres. Assess distribution costs, commission structures, channel performance, and the potential for increasing direct bookings. Develop strategies to optimize distribution channels and reduce dependency on third-party platforms.

Here’s a detailed checklist to analyze the distribution channels of a large hotel and assess their impact:

8.1. Online Travel Agencies (OTAs):

Evaluate the performance of OTAs (e.g., Expedia, Booking.com) in terms of bookings, revenue generated, and market share. Assess the commission structures, contracting terms, and distribution costs associated with each OTA. Analyse the effectiveness of OTA marketing campaigns and promotions in driving bookings.

8.2. Wholesalers:

Evaluate the performance of wholesalers and bed banks in terms of room nights booked and revenue generated. Assess the discount structures, contracting terms, and distribution costs associated with each wholesaler. Analyse the effectiveness of partnerships with wholesalers in reaching specific market segments or geographic regions.

8.3. Tour Operators:

Evaluate the performance of tour operators in terms of bookings, revenue generated, and customer satisfaction. Assess the discount structures, contracting terms, and distribution costs associated with each tour operator. Analyse the effectiveness of tour operator partnerships in attracting niche markets or specialised travel experiences in line with the hotel’s positioning and marketing strategy.

8.4. Global Distribution Systems (GDS):

Evaluate the performance of GDS providers (e.g., Amadeus, Sabre) in terms of bookings and revenue generated. Assess the connectivity, availability, relevance and distribution costs associated with each GDS provider. Analyse the utilisation, effectiveness and ROI of GDS marketing and promotional tools in reaching travel agents and corporate clients.

8.5. Brand Website:

Evaluate the performance of the hotel’s brand website in terms of traffic, conversion rates, and direct bookings. Assess the user experience, website design, and functionality. Analyse the effectiveness of online marketing strategies, SEO efforts, and direct booking incentives.

8.6. Call Centres:

Evaluate the performance of the hotel’s call centres in terms of conversion rates, customer satisfaction, and revenue generated. Assess the efficiency of call centre operations, including response times, staff training, and upselling/cross-selling capabilities. Analyse the effectiveness of call centre scripts, customer service protocols, and resolution of guest inquiries or issues.

8.7. Metasearch Channels:

Evaluate the performance of metasearch channels (e.g., Google Hotel Ads, TripAdvisor) in terms of click-through rates and conversions. Assess the cost-per-click (CPC) rates, bidding strategies, and distribution costs associated with each metasearch channel. Analyse the effectiveness of metasearch marketing campaigns and strategies in driving direct bookings.

8.8. Channel Performance Metrics:

   – Analyse key performance metrics for each distribution channel, such as revenue contribution, conversion rates, average daily rate (ADR), and return on investment (ROI). Assess the cost of acquisition (COA) for each channel and compare it to the revenue generated to determine profitability. Analyse channel mix and identify high-performing channels as well as those with untapped potential to find an ideal distribution channel mix.

8.9. Distribution technology & Channel Management Tools:

Evaluate the effectiveness of distribution channel management tools and related technology in managing and optimising distribution across multiple channels. Assess the automation capabilities, connectivity, and ease of use of channel management systems. Analyse the ability to modify rates, availability, and content across channels in a timely and accurate manner.

Distribution Technology & Related Tools Review

Distribution technology used by a hotel is an essential aspect to consider when evaluating distribution channels. Here are some key distribution technology solutions commonly used in the hospitality industry:

8.9.1. Central Reservation System (CRS):

  • Evaluate the hotel’s CRS, which manages and distributes room inventory across multiple channels.
  • Assess the functionality, connectivity, and user-friendliness of the CRS.
  • Analyse the ability to manage rates, availability, and restrictions in real-time.

8.9.2. Property Management System (PMS):

  • Evaluate the PMS used by the hotel, which handles front-office operations and guest management.
  • Assess the integration capabilities between the PMS and distribution channels.
  • Analyse the ability to update rates, availability, and reservations across channels from the PMS.

8.9.3. Channel Manager:

  • Evaluate the channel manager solution used by the hotel to manage distribution across various channels.
  • Assess the connectivity and compatibility of the channel manager with different distribution channels.
  • Analyse the ability to efficiently update rates, availability, and restrictions across multiple channels.

8.9.4. Customer Relationship Management (CRM) System:

  • Evaluate the hotel’s CRM system, which manages guest data and supports targeted marketing campaigns.
  • Assess the ability to capture guest information from different channels and consolidate it in the CRM.
  • Analyse the functionality for segmenting guest data and personalizing marketing communications.

8.9.5. Revenue Management System (RMS):

  • Evaluate the RMS used by the hotel to optimize pricing and revenue strategies.
  • Assess the ability to integrate the RMS with distribution channels for real-time rate adjustments.
  • Analyse the system’s forecasting and demand analysis capabilities.

8.9.6. Internet Booking Engine (IBE):

  • Evaluate the hotel’s IBE, which facilitates direct bookings on the hotel’s website.
  • Assess the user experience, booking process, and mobile compatibility of the IBE.
  • Analyse the ability to offer personalized rates and packages through the IBE.

8.9.7. Metasearch Management Tools:

  • Evaluate the tools used to manage metasearch campaigns and bids.
  • Assess the ability to track and optimize metasearch performance and ROI.
  • Analyse the functionality to adjust bids, budgets, and campaign settings.

8.9.8. Review Monitoring and Reputation Management Tools:

  • Evaluate the tools used to monitor guest reviews and manage online reputation.
  • Assess the ability to track and respond to guest reviews across different platforms.
  • Analyse the sentiment analysis and reporting capabilities of the tools.

8.9.9. Data Analytics and Reporting Tools:

  • Evaluate the data analytics and reporting tools used to track distribution performance.
  • Assess the ability to generate insightful reports on channel performance, revenue, and guest behaviour.
  • Analyse the ability to gain actionable insights for optimizing distribution strategies.

8.9.10. Connectivity and Channel Integration:

  • Evaluate the hotel’s overall connectivity and integration capabilities with distribution channels.
  • Assess the ability to connect and manage various channels seamlessly.
  • Analyse the ease of onboarding new channels and the availability of APIs or channel management interfaces.

Including the distribution technology used by the hotel in your evaluation will provide a comprehensive understanding of the tools and systems that support the distribution strategy. With over 70% of a hotel’s booking coming through online channels this is more critical than ever. It allows for an assessment of the effectiveness, integration, and capabilities of the technology solutions in optimising distribution channels and driving direct bookings.

8.10. Direct Booking Strategies:

Assess the hotel’s efforts to increase direct bookings and reduce dependency on third-party platforms. Evaluate the effectiveness of direct booking incentives, loyalty programs, and personalised offers. Analyse the performance of direct booking campaigns, landing pages, and conversion optimisation strategies.

8.11. Competitive Analysis:

Conduct a competitive analysis to evaluate the distribution strategies of key competitors. Assess the performance of competitors across various distribution channels and their market share. Analyse the strengths and weaknesses of competitors’ distribution strategies and identify areas for improvement.

8.12. Guest Segmentation and Targeting:

Evaluate the effectiveness of targeting specific guest segments through different distribution channels. Assess the alignment between distribution channels and the preferences and booking behaviours of target guest segments. Analyse the potential for expanding reach in untapped markets or niche segments through specific channels.

8.13. Channel Costs and Commissions:

Assess the distribution costs associated with each channel, including commissions, fees, and marketing expenses. Analyse the profitability of each channel by comparing revenue generated to distribution costs. Evaluate the potential for negotiating better commission structures or reducing distribution costs.

8.14. Channel Performance Tracking and Analytics:

Evaluate the availability and accuracy of data and analytics for each distribution channel. Assess the ability to track and analyse channel performance, including bookings, revenue, and customer behaviour. Analyse the insights gained from channel performance data to optimise distribution strategies.

8.15. Brand Reputation and Direct Bookings:

Evaluate the impact of brand reputation and guest reviews on the hotel’s direct bookings. Assess the effectiveness of reputation management strategies in driving direct bookings and reducing reliance on third-party platforms. Analyse the potential for leveraging positive guest reviews and ratings to increase direct bookings.

By using this checklist, you can thoroughly evaluate the performance and impact of each distribution channel, identify areas for improvement, and develop strategies to optimise distribution, reduce dependency on third-party platforms, and increase direct bookings.

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