Distribution strategy is one of the murkiest areas of revenue management for many hoteliers. It’s also one of the most important areas to manage carefully when you’re trying to drive direct bookings. Which channels should you be on? Which ones are giving you bookings? What about cancellation rates? And are some bookings more valuable than others?
NB: This is an article from NetAffinity
There’s only one way to answer those questions: data. Unfortunately, especially if you’re new to the game, it’s tough to tell what data is the most important.
We’ve created a quick guide to the 10 pieces of data you should be looking at to improve your hotel’s distribution game. Once you’re ticking these boxes, you’ll be fully armed. You will know which channels are growing, which ones are giving you the most guests and the fewest cancellations, which channels are popular in your low periods, and how much value each one really delivers.
Let’s dive in.
1. Growth or Decline
Be sure to put the results you’re getting from each channel in context. Don’t just look at month and year to date – compare these to each month of the previous year.
2. Demand
Look at search and booking patterns per channel.
Some will have shorter or longer search and booking windows, which will let you see when they perform well, and where they fit in overall performance.
3. Revenue Without Commission or Fees
Calculate your net revenue per channel, and your revenue paid per channel. This lets you see the true value of a channel and how much it’s costing you.
Try compiling all this information into an Excel doc or something similar to compare it quickly.
4. Stayed Bookings (Actual)
Look at how many actual stays each channel gives you. The difference between arrival bookings per month and stayed arrival bookings (which takes out cancellations) demonstrates who’s booking versus staying.
5. Stayed Bookings (Cancellations)
Along with number 4, look a bit deeper at cancellations. Look at:
- The percentage of monthly cancellations
- The booking lead time for these cancellations
Are channels holding rooms far out but cancelling at high rates? You might want to pull back on the inventory you’re offering those channels!
6. Day of the Week
Review which days channels are producing for. Are some channels just cramming high demand dates, without encouraging bookings on gap dates?
7. Average Daily Rate (ADR)
Examine your Average Daily Rate per rate plan, and also take a look at the overall ADR for the channel.
Not all channels are created equal. Looking at your ADR per channel will show you whether some channels are heavy on discount rates, and if others are generating higher value bookings.
8. Average Length of Stay (ALoS)
Review the Average Length of Stay per channel. Is there a pattern to longer or shorter stays depending on the channel used?
If there is a pattern, this could partly be due to the rate plans available and how they’re being promoted. Don’t be afraid to look a little deeper to find out what’s behind stay lengths.
9. Location Source of Booking
Review booking by location to see which channels are strong for which geographic markets.
This can help you see the potential to work where market activity is focused to drive direct bookings. OTAs can give you visibility in markets you might not be able to reach on a property level.
10. What’s Loaded
Make sure you have ample inventory and rates loaded for each channel. Don’t unintentionally limit a channel! Try operating on a rolling 12-month basis to escape the habit of loading a year at a time.
Conclusion
We hope this short guide has given you a good starting point for conquering your hotel distribution strategy. Take a regular hard look at your channels and how they’re performing. Don’t be afraid to adjust the ones that are lackluster!
