The important takeaway of the research is that hoteliers need to be mindful of the cost implications of their distribution strategy.
Clearly, the third-party distributors can provide access to markets and consumers that a hotel can’t reach on their own. This reach should have advantages for hotels, if they can balance the value of the demand against the cost of acquiring that demand.
I wanted a view on this from a third-party distributor. I had a chance to speak with Berry Van Weelden—senior director of sales strategy and operations at priceline.com, and a CHR Advisory Board member—about some ideas about how hotels can take advantage of distribution through priceline.com, and the online travel agencies (OTAs) in general, as part of a smart distribution strategy.
Rather than jumping into the “member-only rates” argument, I thought it would be more productive here to talk about the ways that hotels can fully utilize their third-party distribution partnerships to drive demand and gain insights that they would not have access to otherwise.
Berry provided some suggestions of how hoteliers can use the OTA’s data science, various online products, and mobile presence to their advantage.
As we know, priceline.com has the opaque channel, which provides some unique opportunities, but also requires a pretty deep discount. Hoteliers could easily view this as a “channel of last resort” because of low rates and distribution costs. Sometimes discounts are necessary for hotels to fill distressed inventory and drive cash flow.
Berry offered some interesting examples of how smart hoteliers are using priceline.com’s opaque rates to their advantage, to drive real value from the discount and effectively balance distribution cost with incremental revenue.
Data is one advantage that I was pretty sure the OTAs have, and that hoteliers should also leverage.