The landscape of hotel distribution is constantly evolving. With technology advancing at a bombarding speed and the traveller behaviour undergoing a massive shift, hotel distribution has started to play an increasingly important role in supporting the growth of hotel industry worldwide.
NB: This is an article from RateGain
There are a plethora of online booking platforms out there which aid the traveller in their booking decisions, but it is important for the hotels to identify and partner with the right ones which could give them maximum visibility, thereby ensuring higher occupancy levels at all times.
Having said this, as hotel distribution takes a new shape, various trends have come to the fore, that the industry has already been making a note of. Some of these noteworthy trends are listed below:
#1: Increasing Pool of Distribution Channels
As more and more online booking channels mark their presence across the industry and the traveler too has begun to visit these platforms in large numbers, hotels have started to expand their distribution network by partnering with more OTAs and other platforms in order to ensure maximum visibility. A recent research reveals that 41% of the hotel establishments plan to increase their pool of distribution channels in 2018. However, the challenge here is to filter those important channels that could help them achieve their goals.
#2: Increasing Use of Metasearch Sites
Metasearch works as an effective marketing tool for hotels, due to its potential to effectively drive bookings, both direct and indirect. Its use has increased over the period of time, as travellers in large numbers have been taking to this medium to compare various accommodation options and finally make the booking. According to a recent study by L2, China uses metasearch the most (54%), Germany (42%), France (38%), US (36%) and the UK (35%). Another key trend that we see emerging in the industry is the rise of facilitated direct bookings with metasearch. With the use of facilitated booking solutions, the hotels could easily list themselves on metasearch platforms, which gives them a fair chance to catch the attention of the traveller and generate large volume of bookings. For small hotels which do not have the appropriate budgets to tie-up with leading platforms, facilitated direct bookings could prove to be a big boon.
#3: Focus on Reducing Distribution Costs
An OTA typically charges 15-25% commission on each hotel booking that gets generated through their platform. This eats up a large part of the hotel’s profit, and therefore appropriate steps are being taken by them to drive maximum traffic to their own website and booking engines. The power of social media is increasingly being harnessed to build an effective brand recall of their properties. The use of metasearch engines has also increased which helps hotels drive more direct bookings. All this helps in eliminating the third-party costs that burns a deep hole in their pockets.
#4: Vacation Rentals
The traveller of today is looking beyond the conventional accommodation options and is often seen exploring different stay options besides hotels. Vacation rentals has therefore been observed as a key emerging trend, and distribution platforms have been listing these exquisite properties, giving complete information about their availability and price, thereby offering more choice to the traveler. The trend is picking up at an unprecedented pace and vacation rentals as a segment is likely to witness a big spur in times to come.
#5: Use of Blockchain Technology
Blockchain is another disruptive technology, whose use as an effective medium of distribution is being experimented by a large number of hotels. By holding a decentralized record of the hotel’s availability, rates and inventory, the right use of blockchain could completely eliminate the need for OTAs. Now, that’s a good piece of news for the hotels as it would save them from paying out huge amounts as commissions to these third-party distribution channels, and it would greatly affect their distribution strategy. However, blockchain is a relatively newer form of technology and its adoption as a distribution medium is at a fairly nascent stage. Those who are willing to break free and adopt the modern means of technology would definitely reap the benefits.
#6: Advancement of OTAs
OTAs constitute an important part of the hotel distribution matrix, generating large volumes of booking for the hoteliers. Realizing their own importance, OTAs have started to adopt various advanced technologies, and have been reinventing their tools and offerings for hoteliers which would help hotels increase their reach to a wide set of travellers. The use of these unique designed programs would also foster the efficiency levels of OTAs, which would further help them gain maximum business.
#7: Role of Channel Manager
Currently, only about 50 per cent of the hotels worldwide employ dedicated channel managers, who efficiently take over the role of distribution and are committed to driving positive results. However, as the dynamism of the sector continues to expand, many more hotels are seen joining the wagon and hiring experienced channel managers. These expert professionals specialize in online distribution across various channels, and also possess an in-depth knowledge of the hotel industry as well as the traveler behavior.
Above mentioned are only some of the key trends in distribution that the industry has been observing. Out of these, many would continue to grow and make a stark difference to the hotel distribution landscape. Of course, new trends are also going to emerge, as technology and traveler behavior continues to evolve. The industry is gearing up and we might witness some unique developments shaping up in the near future which might change the face of the industry forever.
