The Seven Deadly Sins of Distribution

In hotel distribution, we know that there is no universal formula that can be applied to all establishments to achieve the perfect channel mix.

NB: This is an article from mirai, one of our Expert Partners

However, once we are clear on the key players and what each of them can contribute (for better or worse), the next step is to know what practices to avoid so that your distribution does not turn into a living hell.

Controlling your hotel’s distribution is essential, both to achieve greater profitability and revenue, and to respond to moments of crisis or uncertainty with the greatest possible solvency. The lack of transparency in distribution, and the price war for the end customer, make this control very difficult (if not impossible) to achieve.

Following the path of virtuosity in the marketing ecosystem, we must try to avoid temptation as much as possible and stay away from the seven deadly sins of distribution:

• The more channels, the better: This can lead to channel mismanagement, resulting in uncoordinated and unprofitable distribution. By over-contracting certain types of channels (following the famous “more is more” philosophy), you run the risk of losing control and independence, not only in terms of distribution and profitability, but also in the direct relationship with your own partners and, of course, with the end customer, increasing the payment of commissions to third parties.

• Not knowing the real profitability of each channel: Calculating the net contribution of each channel is certainly a complex task that very few establishments perform regularly or adequately. Only by understanding the true cost of distribution and the net revenue of each channel, will we know the true value they bring (not only in terms of revenue, but also when they help fill the hotel) and be able to make the right decisions. Make sure you eliminate the channels that detract from, rather than contribute to your distribution and keep those that can help you achieve healthy and profitable marketing.

• Assuming that all channels have more capacity to engage customers than you do on your own: The e-commerce revolution has changed the behavior of users when buying their holidays, with 72% already doing so online. This means that all of a hotel’s distribution channels are being democratized, as the customer uses the internet as a priority purchasing channel. Many of the channels that mediate your distribution have access to the same audience as your own website and are displayed in the same showcases (even with a limited capacity to generate demand on their own). Capture all the demand that will keep your direct channel within the right profitability margins through a good visibility strategy.

Read rest of the article at mirai