Debunking Online Hotel Distribution Myths

Europe-US-myths

Erik Munoz, Siteminder’s head of strategic sales and global partnerships, shed some light on the truth behind many common myths in online hotel distribution.  Let’s take a look at some of this information focusing on online distribution channels.

Myth: Hotels Should Reduce Their Reliance on Online Travel Agency Bookings.

Munoz explains that there are many hoteliers who feel strongly about avoiding OTAs unless absolutely necessary.  Most of this stems from high commissions that these sites charge.  Although commissions can be high, many of these OTAs have larger marketing budgets which will help drive traffic and conversions more effectively than an independent hotel could to their own website.

For those markets that are geographically out of reach to the average independent hotel or regional chain, OTAs can be especially useful.  Emerging, local OTAs can be more effective channels to secure booking from outbound travelers in some markets.  If your hotel is not using these OTAs to market your property, you are missing out on bookings and revenues from these potentially lucrative source markets.

Munoz offers three keys when planning your distribution strategy:

1.  Make sure to select the right mix of OTAs on which to list your property.  The key here is not putting all of your “eggs” into one basket.  Try implementing a broad, far-reaching online distribution strategy.

2. Technology is an important part of leveraging the OTA channel most effectively.  Make sure you are not increasing your costs when choosing multiple, varied OTA sites.

3. Ensure you integrate your online distribution channels for maximum reach and minimal risk of inconsistent pricing or overbooking.

Myth: Metasearch is Most Useful for the Marketing Department, not the Online Distribution Team.

Historically, marketing and online distribution departments in many hotels have worked autonomously.  However, since metasearch providers started to connect directly to the hotel booking engine or CRS (Central Reservation System), the two teams now will need to work together in ensuring the best possible results from all channels.

A solid marketing team must be in charge of managing the pay-per-click and keyword bidding, while online distribution teams manage the live rates, availability and deep links from metasearch partners back to the hotel booking website.

Myth: All Channel Managers are the Same.

As online distribution becomes more complex, technology is being created that allows hoteliers to effectively manage online distribution channels.  Key components to look for when identifying the best channel managers include dynamic pooled inventory, two-way SML connectivity and self-mapping tools for faster speed to market with new offers.

Applying these core features from market-leading channel manager products will quickly make you realize that not all channel managers are the same.

Myth: The Global Distribution System is an Overly Expensive Channel that is Only Beneficial for Big Chains or Regional Hotel Groups.

The GDS is not only for big chains or multi-property hotels groups.  Regardless of your size, if you are a hotel in key corporate destination, the GDS channel can be an extremely lucrative booking source.  In addition, GDS bookings have a longer average length of stay and a higher average daily rate than bookings originating for other channels, as has been the case historically.

The perception of high costs from “middle men” that do business between the hotel and GDS booker, and the varying price models that exist from CRS and connectivity providers create a cloud that can be cleared up by doing some research before signing up with a provider.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>