How Hotels Can Use Data to Optimize the Distribution Channel Mix

How Hotels Can Use Data to Optimize the Distribution Channel Mix

With access to more data than ever, hotels are sitting on a goldmine of information that when utilized effectively, can increase guest satisfaction, improve revenue, and increase profitability.

NB: This is an article from Pegasus

But there’s a sticking point — no two hotels’ distribution mix is exactly the same and hoteliers often struggle to retrieve, collect, and synthesize all of their data. This leads to missed opportunities to shift share to more profitable channels and maximize revenue performance.

In the following post, we’ll discuss the huge benefits of having your data centralized in one platform, and how it can help you make smart data-driven decisions to optimize your hotel’s distribution mix.

Making sense of data

Hotels generate a huge amount of data that can streamline operations and drive business performance. However, without the right tools, it’s incredibly hard (and time-consuming) to piece together massive volumes of data generated across multiple sources into a meaningful picture. As a result, vital information can be missed.

For example, a hotel might spot a downturn in year-on-year revenue from a certain channel, but can’t identify the reason why that downturn is happening. Equally, a great opportunity to drive more business from a client might be overlooked because an upward trend in their website engagement was missed.

To identify the demand levers required to maximize channel performances, data needs to be readily available and easy to dissect. This can help avoid reactionary actions and missed opportunities to increase revenue and reduce third-party booking and commission fees.

Leverage your data, optimize your channel mix

By using rich, interactive visualizations, you can quickly digest and identify the main drivers impacting your revenue and profitability and take the necessary actions to achieve impactful business outcomes.

Here’s a sample from a GM summary – :

Distribution Analytics Page in Business Intelligence platform

As you can see, there are multiple views available, including:

  • Pick-up Analysis
  • Historic Performance
  • Future Bookings
  • Distribution Channel
  • Booking Engine
  • Rate Plan / Segment
  • Travel Agent / Consortia

Once you select any one of these dashboards, you can drill into multiple levels of more nuanced data, ask business-critical questions, and receive insights that can significantly move the needle in terms of business performance. This exploratory approach to data analysis can reveal what’s really driving performance and the actions necessary to capitalize on business opportunities, mitigate risk, and optimize revenue management strategies.

To illustrate how our Business Intelligence platform can be utilized, let’s explore a couple of scenarios related to building corporate (GDS) business.

An intelligent way to harness data

Within the dashboard, the ‘Consortia’ tab provides current, year-over-year comparatives of reservation performance and overall contribution.

Consortia tab - Business Intelligence platform

The Consortia we’ve highlighted are showing a decline. In this scenario, a hotel could break out the reservations to analyze discretionary and non-discretionary performance, participation ROI and RFP opportunities for the following season.

Within this same dashboard, there are also ways to drive business by spotting hidden opportunities. For instance, a hotel paying to participate in a Consortia program might realize they’re actually winning a lot of Corporate business from a client in that program, which can be seen via ‘Rate Category Share.’

Consortia Monthly Performance - Business Intelligence Platform

As a result, the hotel might discontinue that Consortia to avoid paying participation costs, helping to drive down commissions and participation fees.

Feeder markets

Another invaluable way to analyze your hotel’s performance is through the ‘Feeder Markets’ dashboard. This highly visual map shows how your hotel is performing in both domestic and international markets at a country level.

Feeder Markets - Business Intelligence Platform

The size of each circle represents the amount of demand being generated from each market and the color indicates whether a particular market is delivering more or less business compared to the previous year. You can also click on each circle to drill down into city-level data, filter on individual markets, and identify the travel agents and the rates being booked.

As a result, a hotel can more easily understand the mix of domestic/international business and develop strategies to target key and emerging markets, distribution channels, and travel agencies. This data can also be used to assist with setting rates and during negotiation with corporate buyers, while substantiating the need for specific sales trips to key markets or your top clients.

For example, if a hotel’s year-on-year reservations from Florida are down, they can drill down into specific Florida markets to inspect why that’s happening. Potentially, a particular travel agent might not be driving as much value as last year. Based on this insight, the hotel might take a sales trip to find out why, or capitalize on an opportunity to nurture new relationships in that market.

Ultimately, being able to see data on such a granular level allows trends to be identified that might otherwise have been completely missed. The necessary steps to address the situation can then be taken.

A glimpse into the future

Our Business Intelligence platform also lets you look at future data, using filters such as channel type and rate category. For instance, if you notice that your hotel’s Facebook reservations next summer have plummeted when comparing performance against prior year pace, you can take immediate actions to turn that situation around in advance.

Empowered by data

By following a set of best practices and harnessing specialized tools, hotels can gain a bird’s-eye perspective of their data. This enables them to identify risks and opportunities, informing better data-driven decisions. In turn, this can help drive profits by managing demand levers to drive bookings at lower acquisition costs.

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