Distribution becomes top of mind for hotel investors

Revenue management and distribution matters used to be discussed in small groups within the silos of small departments. These days, however, distribution and revenue management topics headline conferences and even demand conferences of their own. And the people who are talking about it aren’t just the revenue management or distribution departments. Hotel owners are also sitting up and taking interest — leading to a renewed focus on getting more direct bookings.

While revenue management and distribution discussions have been buzzing at the top in the United States for the past few years, I am certainly seeing the same movement here in Asia now. I read a recent story that quoted Colman Ho, vice president of group marketing for Century City Holdings, a real estate company, telling the audience at the recent WIT Hospitality conference in Hong Kong that hoteliers have to now “think beyond real estate.”

What’s happening in Asia mirrors the evolution of distribution and revenue management in the United States. At many of the major real estate and investment conferences, the hot topics today during the main general sessions are not about mergers and acquisitions or real estate valuations. Rather, distribution is usually one of the first things talked about.

In the past, hotel owners and real estate executives worried more about renovation costs and other investments to improve their physical investment than how rooms were booked or priced. Today, that is changing and it’s not unusual to hear hotel company heads and even real estate executives like Ho talk more about distribution costs and OTAs than cap rates or lenders.

Owners are waking up to the idea that the value of the hotel, or its potential, can be measured by examining what’s under the hood. In fact, looking at revenue management data gives hotel owners important insights and even help answer questions about when to renovate, reposition or sell. Real estate investors now understand that revenue management has to be a key part of their decision making.

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