Understanding the right mix of direct channels like your hotel’s website or call center, and indirect channels like online travel agencies (OTAs) and Global Distribution Systems (GDSs) as well as travel wholesalers and tour operators will make a huge difference on your hotel’s bottom line.
NB: This is an article from Mews
That being said, there is no one perfect mix. Instead, the right distribution mix for your hotel will depend on who is your target audience, what other hotels in your comp set are doing, and your overall budget. We’ll take a look at the means of distribution and the different channels in order to give you a complete guide to building your hotel’s ideal strategy to optimize results.
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What is a hotel distribution channel?
A hotel distribution channel is the means by which your hotel’s offer reaches your target audience. This can be done via a variety of methods or platforms through which you sell your hotel rooms. Possible methods include online travel agents, booking engines, phone and other offline means, metasearch and global distribution systems.
It goes without saying that using a variety of channels allows you to create a strategy that will drive bookings and positively contribute to revenue.
Different types of hotel distribution channels
Direct channels include your website, phoneline, or social media. Nowadays, online is favored over offline, which is why it’s important to have a website that’s optimized for direct bookings and with a built-in hotel booking engine. Direct bookings are the most profitable because you avoid having to pay commission to third parties.
In order to prepare your website for direct bookings beyond a booking engine, you’ll need to have a mobile-responsive site as a big percentage of bookings are made from mobile, as well as ensure that you are using SEO (search engine optimization) strategies to position your site better on Google. The easier it is for guests to navigate on your site, the more likely it will be for you to lock in a booking from your own channels.
Indirect channels include: Online Travel Agencies (OTAs), Global Distribution Systems (GDS), Metasearch sites, wholesalers and tour operators, among others. GDSs like Amadeus and Sabre are used to connect with travel agents, and to maintain accurate information across global travel agent systems. Because of the variety of indirect channels out there, this still remains one of the most popular ways for hotels to distribute their rates.
Online travel agencies and metasearch engines are one of the most important tools to figure into your distribution strategy because they have the ability to reach an incredibly large audience due to the amount of money these sites invest in advertising with the commissions hotels pay them. Wholesalers and tour operators are another source of indirect traffic with wholesalers connecting travel agents with travel suppliers, although wholesalers are not super profitable due to small margins.
Offline is becoming less and less important due to the popularity and ease of the internet. However, at the same time, offline means like phone, direct email, offline advertising and walk-ins should not be neglected. Events and connecting with locals through strategic partnerships can provide just as much ROI as investing in indirect channels.