The Most Important Online Distribution Channels for Hotels

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The Most Important Online Distribution Channels for Hotels

The distribution channels that hotels use and invest in can have a significant bearing on their revenue management strategy, and on their overall success. These days many hotels receive more bookings from the internet than from offline travel agents. Meanwhile, more recent advances in smartphone technology have made online distribution channels more important than ever before, as consumers now expect to be able to book a hotel room easily, from anywhere in the world, at the touch of a few buttons.

So what are the most important online distributions for hotels?

1. Your Hotel’s Own Website

The most obvious online distribution channel for your hotel is your own website and this is also one of the most cost-effective marketing tools your business will have at its disposal. After all, once initial development fees have been paid, the cost of maintaining the website and hosting it is relatively small.

Your website provides you with an ideal platform to convey your brand values and deliver a marketing message that appeals to your target audience. At the same time, websites offer an excellent way to increase the overall visibility of your hotel, especially when SEO is carried out effectively and fresh content is added regularly.

In addition, of course, a hotel’s website is the only online distribution channel where they can generate direct sales, without having to pay a commission to a third party. For this reason, it pays to try and generate as many bookings through your website as possible, which is why many hotels offer incentives for direct bookings.

Today, many people rely almost entirely on mobile and tablet devices to browse the internet. Google revealed that searches from mobile overtook those from desktop back in 2015 and TravelClick learned that mobile hotel bookings increased by 42 percent between 2013 and 2015. It is, therefore, essential that hotel websites are mobile optimised.

More tips about how to create a perfect hotel website are described in the article “8 Tips To Gain More Bookings With Your Hotel Website”.

2. Online Travel Agents (OTAs)

Another online distribution channel that will be important to your revenue management strategy is online travel agents, or OTAs. Examples of some of the most famous OTAs include Booking.com, Expedia, Orbitz.com, Hotels.com and Priceline.com and although this is usually the most costly distribution channel for hotels, there are numerous benefits.

The primary benefit for your business is the extra exposure that OTAs generate, allowing your hotel to attract guests who might not have found you through other channels. It is also the most popular distribution channel for mobile users, with PhocusWright finding that around 64 percent of all mobile bookings come from an OTA.

Depending if you are a hotel chain, an independent hotel and the location of your property a commission system of somewhere between 15 and 25 percent will usually be in place. Online travel agents may, therefore, be the distribution that produces the least revenue per room. Nevertheless, the incremental business can make it worthwhile and with the right incentives, customers can be encouraged to book directly in future.

In order to get the most out of OTAs, it is important to keep the information you provide them with up-to-date and ensure you also give them accurate descriptions of rooms and high quality photographs. Moreover, you should aim to respond to customer reviews as quickly as possible, in order to limit the impact of any negative feedback.

3. Global Distribution Systems (GDS)

Finally, a global distribution system, or GDS, is a network that is primarily used by travel agents to book things like airline seats, hotel rooms and car rentals for their clients and customers. Through a GDS, these various different services are usually consolidated, making the process of booking far easier. The main GDS are Amadeus, Galileo, Worldspan and Sabre.

In most cases, a GDS will cater to a global market of travel consortia (e.g. American Express, BCD, Carlson Wagonlit and ABC). This particular distribution channel remains important for hotels and can allow you to foster positive relationships with travel agents, resulting in greater commercial demand for your hotel rooms.

Generally speaking, a global distribution system requires a small initial setup fee to be paid, followed by transaction fees for each booking made. For hotels, the trick is to balance room rates, so that they are low enough to maintain positive relationships with travel agents and generate custom, but high enough to offset the fees.

The primary benefit of a GDS is the opportunity to attract demand from all across the world. Once again, the key to success with this distribution channel is to keep information up-to-date, so that rates remain competitive.

With internet bookings overtaking many other types, and with the ever-increasing popularity of smartphones, online distribution channels are now more important than ever before. For hotel owners, there are three main channels to be aware of – hotel websites, online travel agents and global distribution systems. Each of these channels has its own plus points and drawbacks, and while most hotels should pay careful attention to all three as part of their revenue management strategy, it is usually best to try to encourage as many direct bookings as possible.

How to Manage Your Online Distribution Channels?

A hotel distribution channel manager is an online management solution, which allows you to centralise all of your different distribution channels and manage operations connected to them, all from the same place. More information about distribution channel managers, you can read in the article “Hotel Distribution Channel Manager: What Are the Advantages?”.

More Tips to Grow Your Business

Revfine.com is a revenue management blog with practical tips to optimise your revenue. You can find all tips in the categories Revenue Management, (Online) Marketing and Technology & Software.
2018-05-04T20:59:31+00:00

One Comment

  1. Thuan Dao August 4, 2018 at 2:14 pm - Reply

    Great post!. Hotel distribution strategy is a vital part of the revenue management plan. Hoteliers always need to develop and grow effective distribution channels to maximize revenue.

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