Can a Hotel Channel Manager Software Help Build an Effective Hotel Distribution Channel Strategy?

Hotels are making 148.3 million bookings per year - but with a good hotel distribution strategy, this number can increase substantially! With the competition being so stiff, hoteliers may find that developing and implementing an effective distribution strategy could be the secret to a thriving business. Because by increasing distribution, you attract more guests and make more bookings, thereby growing your hotel revenue.

However, when it comes to creating distribution strategies, there are several elements to keep in mind, such as: who is your target guest, what are your business goals; are you using a good blend of online and offline distribution channels, are you paying enough attention to direct bookings; are you setting competitive prices?, and most importantly, are you using the latest technology such as Hotel Channel Manager Software and hotel management system to your advantage? In this post, we'll go over what a hotel distribution strategy is and how to create the ideal one for your property.

What is a hotel distribution strategy, and which distribution channels are the most effective?

A hotel distribution strategy is a strategy for profitably selling rooms through various channels. Direct channels, such as a hotel's website, are frequently combined with indirect channels, such as online travel agencies (OTAs), global distribution systems (GDS), and wholesalers.

Why should hotels rethink their distribution strategy?

At the turn of the millennium, online travel agencies (OTAs) leveled the playing field between massive multinational brands and local hoteliers. A tiny B&B in South Africa would have the same level of online visibility as a Marriott or a Hyatt, bringing visitors from all over the world. However, since then, every hotel employs the same hotel software technology and distribution mechanisms, OTAs have become a standard. As a result, smaller hotels and chains are once again finding it difficult to compete with major names. To make matters worse, uniform design and quantitative search parameters such as star ratings, room pricing, user reviews, and more make it even more difficult for hotels to highlight their distinguishing features.

How to create an effective hotel distribution strategy?

The internet booking industry is a hotbed of competition. The internet has provided hotel bookers with access to vast amounts of information through comparison websites (metasearch channels), search engines, and online travel agencies. Hotel guests are using several booking engines to plan their trips and visit between 2.4 and 3.4 websites during the research and selection process. To maximize your chances of attracting the finicky hotel booker, it makes sense for hotel providers to publish their room inventory and pricing on as many distribution channels as possible. In many ways, your distribution strategy is the key to the success of your hotel. The logic is simple, the more you distribute our hotel's rooms and services, the more people are aware of it, the more bookings you get and more profits you earn. To develop an effective hotel distribution plan, follow these three steps:

1. Business mix optimization

The distribution mix of a hotel refers to how bookings or income are derived from different booking channels (online, offline, OTAs, and direct reservations) or market groups. Typically, a hotel sets goals for each sector and monitors performance on a weekly, monthly, and annual basis. To optimize this distribution mix, hoteliers should examine the expenses, profitability. They should then compare the performance of each channel against company goals. Some channels may perform better on specific days of the week, during specific seasons, or under specific market situations. Hotel revenue managers must be diligent to build and maintain an ideal channel mix, performing frequent audits of each channel. While the ideal distribution mix varies for every hotel, most aim for a wide mix to avoid becoming unduly reliant on a single channel.

2. Use both online and offline means to reach your target audience.

Your distribution plan should incorporate a variety of online and physical methods which help market your hotel to a large number of audiences from across the world. OTAs, a direct booking engine through your website, and social media platforms are all good places to start. You should also collaborate with offline channel partners including voice reservation services, wholesalers, and tour operators.

Adding to your advantage, using the Internet is a great way to market the hotel and can help you reach every corner of the world. As we said before, travelers are heavily using the internet for their travel research and booking. While internet channels are essential, traditional channels should not be overlooked. Local residents as well as elderly tourists who may not be as comfortable using the Internet may be drawn to offline channels.

3. Bring it all together with the best of hotel technology

An efficient hotel distribution plan necessitates the use of the proper tools. A channel manager, booking engine, and hotel software are examples of such tools.

Channel manager

A hotel channel manager software integrates your property to all of the distribution channels you've selected. It will aid in inventory management and the avoidance of overbookings. You may change room costs, establish stay limitations, and create pricing strategies in real-time all from the channel manager.

Booking engine

A booking engine integrates to your website and channel manager, allowing viewers to verify room availability and book directly with you. Customers can also make payments instantly after creating a reservation when the booking system is linked to payment getaways.

Property management system (PMS)

A hotel software or property management system (Cloud PMS) is a software that allows you to manage your whole property. It's similar to the center of the hotel since it contains a list of all rooms and reservations, as well as guest information, cleaning schedules, and property information. It provides useful information to hotel management in the form of a variety of statistics, including reservations, occupancy rate, income, and availability. Most PMSs are now cloud-based, which means you don't have to install anything on your PCs.

The Internet is a powerful selling tool for hotels. Nevertheless, you must understand who your clients are, where they book, and which tools will be the most effective for your property if you wish to build an effective and profitable distribution strategy. Ensure that you highlight your direct booking channel, select the OTAs where your top guests book, and use the right tech tools. As the hotel business evolves, one of the most effective ways to produce long-term profitability and success for your property is to leverage the correct technology.