THE IMPORTANCE OF THE DISTRIBUTION STRATEGY IN HOTEL
The distribution strategy is a crucial element for the success and performance of a hotel, as it represents the actual business mix of a hotel. That being said, not all hotels have an appropriate distribution strategy for their business model and aligned with short, medium, and long-term objectives.
Below is a brief but effective presentation of the fundamental aspects of the distribution strategy by ExWorksMilan – Expert Strategic and Financial Hotel Advisor.
Definition: What is a distribution strategy?
The distribution strategy is an action plan to sell rooms profitably and represents the ways in which a hotel is distributed and booked on various sales channels. There are different channels on which to distribute your hotel, mainly divided into direct channels (such as the website, phone number, email, chatbot) and indirect channels (such as OTA or Online Travel Agencies, GDS or Global Distribution Systems, wholesalers, tour operators). Defining a winning distribution strategy is crucial to increase revenue and room profitability.
How to manage the distribution of a hotel on different channels?
The most effective and efficient way to manage the distribution strategy is through a hotel channel manager, which is a technological system that connects the hotel to its online distribution channels (OTAs, GDS, wholesalers, and more) so they can be managed in a fraction of time. The ability to manage all data from a single platform makes operations automated and “visible” in real time, such as changes in rates or availability.
How to build your own distribution strategy?
Based on a careful analysis of their business, target market, profitability, and goals, the hotel decides how to compose the mix of distribution channels, both in terms of quantity (how many channels to choose?) and characteristics (which channels to choose?).
The main benefits of a proper distribution strategy are: increased profitability, visibility, and hotel occupancy.
Undoubtedly, the hotel’s website is the booking channel par excellence, as it allows the hotel to communicate its product (brand), philosophy, and services effectively. It has the great advantage of being a direct channel, capable of allowing specific interaction with customers and not paying commissions to OTAs, thus increasing the hotel’s profitability. For these reasons, the website is one of the channels to be constantly implemented, optimized, and monitored. One way to increase bookings through this channel is to optimize search engines (SEO) or use Search Engine Marketing (SEM). These solutions will not only help strengthen the hotel’s position on search engines but also lead to an increase in direct bookings.
Finally, we invite all readers to reflect on and analyze their hotel business and understand whether their distribution strategy reflects the long-term strategy, target market, and unique characteristics of the hotel.
If the strategy is not aligned, and if points of contrast emerge, it is advisable to turn to professionals in the industry, such as ExWorksMilan, who can identify and build the most suitable mix of distribution channels that can guarantee revenue maximization.