Hotel distribution channels
As a hotel or hotel chain, it is very important to advertise your rooms. You can opt to receive your bookings through your own booking engine, but also opt to advertise on other hotel distribution channels. To make sure your hotel is always sold out and you maximise your revenue, it’s important to use a mixture of channels to reach your ideal target audience.
On this page, we give you more information about hotel distribution channels. We will describe what they are and how choosing the correct distribution channels can make your hotel(s) get more bookings and thus, make more revenue. There are both offline and online hotel distribution channels, each with their own strengths and weaknesses.
What is a hotel
distribution channel?
A hotel distribution channel is basically anywhere a hotel or hotel chain can sell rooms to potential customers, whether that’s online or offline. This can be your own booking engine, but also travel catalogues, online travel agencies, global distribution systems (GDS), metasearch sites and more.
Which offline and online hotel distribution channels are there?
There are multiple hotel distribution channels you can choose from. Before making that decision, it’s important to know more about the differences between each hotel distribution channel.
OTA’s
This is probably the most known hotel distribution channel. OTA’s are online travel agencies that advertise rooms from thousands of hotels. Often, they even advertise full packages with flights and excursions. These sites have huge audiences and customers love browsing on OTA websites. Some look for a great deal, others love the ease of comparing multiple hotels in one area, for instance.
Because of the marketing efforts OTA’s put into their own website, hotels can be sure their rooms will be advertised to the masses. But it comes at a cost: every OTA has their own commission scheme. Famous OTA’s are for instance Booking.com, Expedia and Priceline.
Direct bookings (both on the website or by phone)
Your website offers many opportunities to show potential customers your rooms, your amenities and all you have to offer. It is also a great way to convert these potential customers into actual customers by tempting them to book. If you have a booking engine on your website, you can do this by offering great prices or adding small extra’s to someone’s stay if they decide to book on your website. Direct bookings are more profitable than other booking methods, because you do not need to pay a commission fee. Furthermore, these bookings are more likely to result in repeat visits and repeat bookings.
Nowadays, most people have no issue booking their stay online. Nevertheless, some people – mostly older people – prefer booking by phone. That’s why it’s important your staff is trained to take bookings by phone.
Metasearch sites
Metasearch is on the rise. More and more people book their trips on metasearch sites such as Tripadvisor, Trivago and Google Hotels. For these hotel distribution channels, you pay either a commission per booking or there’s a cost-per-click fee.
Not every one of these websites have as much booking intent as the others. For instance: people browsing TripAdvisor are often looking to see what an area has to offer, and then the site also shows the possibility to book a room with venues in the area. It’s important to have a strategy per metasearch site, especially if you pay a cost-per-click fee. Sites that attract visitors with less booking intent, should have lower CPCs.
Wholesalers
A wholesaler doesn’t work directly with the travellers in the marketplace, but does offer rooms (and/or tours and excursions) to travel agents. Because profit margins are often thin with wholesalers, they’re not often a hotelier’s favourite hotel distribution channel. Still they can be great if you for instance have a lot of empty rooms you want to fill last-minute.
Global distribution systems
Global distribution systems are distribution channels to connect with travel agents. This is where professionals browse hotels, check availability and check room rates. It’s important to always keep your information up-to-date with GDS systems used around the world, so travel agents can book your rooms for their customers.
Some well-known GDS systems include Travelport, Amadeus, Sabre and Worldspan.
Which strategy is needed to choose your distribution channels in the hospitality industry?
To reach your ideal customers, it is important to choose your hospitality distribution channels wisely. Because you also pay commission or a cost-per-click (CPC) it’s important to make sure you have a strategy on how you’re going to spend your money.
Appeal to your target audience
The best strategy is often a mix of multiple distribution channels. When choosing one or multiple distribution channels, it’s important to keep your target audience in mind. You need to know who your ideal customers are and where they ‘shop’ for hotel rooms. You want to make sure that you’re super visible on the right hotel distribution channels.
For instance, if you want to appeal to U.S. travellers coming to Europe, it’s important to know they often book with OTA’s such as Expedia and Booking.com. They might google for easy keywords such as ‘hotel Amsterdam’, so you want to show up on Google Hotels and maybe even be named next to the top 10 must-sees in the city on TripAdvisor. And if you notice your social media attracts a lot of visitors from the United States, you might want to add a booking engine to your website, so you can push promotions with a link you can add in your bio.
But on the other hand – if you notice your visitors are primarily older, you want to make sure your phone number can easily be found. This is because that audience is more likely to make a reservation through a phone call.
Test & try again
It’s important to know that a strategy isn’t a one-time decision. You can change your strategy any time based on all sorts of key metrics. Decide which metrics are important for your hotel(s) and make sure to track them for all the hotel distribution channels you chose. Which channel brings in the most sales? Which channel brings in the most gross revenue? Which channel gives you the most visibility? And is it worth it compared to your margins or costs? There are so many metrics you can keep track of.
Based on these metrics, you can change your strategy and for instance test new channels or optimise existing ones.
How do you manage all these distribution channels for the hospitality industry?
When offering your rooms on multiple distribution channels, challenges may arise. For instance: if the pricing of a room type changes, you would have to change this in the back-end of all distribution channels. Or if a room gets booked, you would have to update the occupancy everywhere. This is an annoying job that eats up your time – and let’s be real, your time could be spent doing better things!
Using a channel manager is a must to keep track of your (free) rooms and pricing. A channel manager allows you to manage all your bookings in one place. You can adjust occupancy, pricing and more in the channel manager. The real-time, automated 2-way online distribution will make sure the occupancy and pricing gets adjusted on all the distribution channels.
