Hotel Distribution: As Simple or Complex as you Make it

A variety of factors influence hotel distribution strategies. Many people find it simple. They decide on a strategy, a plan of action, and they follow it. Their distribution system works well. It is effective.

However, distribution is a nightmare for the majority of hotels. There are so many competing elements that effective management is difficult. Everything here appears to break faster than a hotel's ability to fix it. It's no surprise that most GMs and their corporate counterparts are constantly in the fire-fighting mode. 

This is an attempt to deconstruct the distribution strategy and then apply a complex and simple execution, but first 

The core: you have control over most of these.

• Rate structure
• Revenue management practices
• Team dynamics
• Website/ CRM/ loyalty program/ app
• Marketing investment
• Social media
• Guest experience delivery
  
  

The second layer: you have partial control over these.

• OTAs
• Travel Agents
• Corporate clients
• Brand and loyalty base
• Google/ Search 
  
  

The third layer: you have no control.

• Airlines, destination/ location arrivals
• Political situation
• Economic factors
• Pandemic 
  
  

Let me do this the complex way:

Χ A rate structure that is all over the place, with a rate gap of multiples between the lowest and highest rates.

Χ Keep all rates open to all channels and agents, regardless of demand level.

Χ The last room is on a first come, first served basis.

Χ Revenue management? That has to do with managing the revenue manager. I should always be able to get my way and get the rates I desire.

Χ Each team should compete against one another. It all comes down to who has more clout and who can plug in their business first.

Χ Social Media - Why are they following us if they don't want deals?

Χ The direct strategy requires too much time and money for uncertain returns.

Χ Marketing investment—why should I spend money upfront or at all?

Now let us get the second layer wrong:

Χ Give OTAs, agents, and other clients everything. Promotions, POS rates, member rates, campaign offers, credit card deals, early bird, summer deals, marketing contributions, ranking boosters, commission override, last-minute deals, mobile offers, partner exclusives, kick backs, and so on are all welcome.

Χ Search engine marketing is prohibitively expensive. OTAs should handle it.

Χ The third layer is where we get our data and excuses if someone asks why our hotel isn't performing optimally. It is the most beneficial layer!

Now let me do it the simpler way:

✔ A rate structure with a flat rate or little variation between the highest and lowest rates.

✔ Even if I don't have a history, a brand, or a loyal following, I leverage the experience that I deliver to my guests.

✔  Revenue management: Nothing stands in the way of my hotel's long-term profitability, which is measured against a comparable competitive set.

✔  The team—they all work together with profitability and sustainability as fundamental principles. They do not compete for business with each other.

✔  I balance selling and engaging content on social media.

✔  The direct strategy is the most important distribution pillar, with adequate investment in web, traffic generation, marketing automation, CRM, loyalty, and a hotel app.

✔  The second layer is all about maximizing its contribution while being aware of my limitations. I will make the most of what I can and accept what I can't. 

✔  In my opinion, search engine marketing is such a simple strategy for increasing profits that I wish more hoteliers would take the time to learn about it and put it into practice.

For most running hotels, there is no such thing as getting off a station and taking stock of the situation to change tracks afterwards. The oversimplification here is to illustrate how a hotel might actually be in a precarious situation. By making some of these high impact changes, it is possible to escape an unsustainable situation and transition to a more balanced and profitable distribution strategy. 

On which side of these extremes does your hotel sit?

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