What is hotel distribution?
Hotel distribution refers to the act of selling inventory (hotel rooms) to clients through various channels, both online and offline.
Why is an effective hotel distribution strategy important?
Because the competition on the travel market is so big, online presence is crucial. When you’re not present on the booking channels frequently used by your target audience, one of your competitors will inevitably capture your potential client. According to a recent Expedia study, travellers execute on average 43 searches before booking, so make sure you’re present on a good variety of booking channels.
“Travellers execute on average 43 searches before booking.”
- Expedia Group
By boosting the visibility of your hotel or B&B, you can achieve maximum room occupancy, one of the main business goals of every hotelier. The key is to find a viable balance between your direct and indirect distribution channels. If you rely solely on your own website to bring in reservations or, on the contrary, exclusively depend on a few OTAs, there is plenty of room for improvement.
Define your unique selling points and target audience
It's important for hoteliers to understand that there is no magic formula for assembling the 'right' distribution mix. Since all accommodations are different, the audiences they appeal to also vary. Your accommodation type and location directly relate to your average guest’s nationality, age group, family status, travel habits, interests … All these different types of travellers use different channels to make their travel arrangements.
Figure out your strengths: why should people stay in your accommodation as opposed to your competitor’s? Stand out from the other properties in your area by clearly communicating these unique selling points and by conveying the extraordinary experience your hotel or B&B offers. Determine who this type of stay appeals to in order to select the right distribution channels for your target audience.
Choose the right distribution channels for your hotel
Online Travel Agencies (OTAs)
The dominance of Online Travel Agencies on the travel market is undisputed. Being present on websites like these is essential if you want to be seen by a multitude of (international) travellers who wouldn’t come across your property otherwise.
Do you attract many Asians or mostly Europeans? Or is your property especially popular among locals? Depending on your target groups, a variety of OTAs may be of interest to you. Booking.com, Expedia and Airbnb are among the most influential OTAs globally, whereas Trip.com and Agoda focus specifically on the Asian market.
The biggest plus of large, well-known OTAs is that they do the marketing for you, providing your accommodation with great online visibility. You also benefit from more direct reservations, as many OTA users switch to the hotel website to complete the booking (billboard effect). Smaller OTAs – often regional players – are great for reaching new markets or specific types of travellers. Consider, for instance, Verwoehnwochenende.de, Smartbox and Weekendesk.
Metasearch websites such as Google Hotel Search, Trivago and TripAdvisor are also increasingly being used to book overnight stays. They are highly useful to travellers because they facilitate the comparison of prices on various booking websites. Once the potential guest has found a property that appeals to them, they can click through to the booking website offering the best deal. Make sure that your own website is included in the list of linked booking channels! In return, the metasearch website usually charges a listing fee and a referral commission.
Destination marketing organisations and event organisers
Have you considered the tourist office of your city or region? Their websites often include a page dedicated to accommodations, presenting a great opportunity for you to get in touch with a high-conversion audience. Organisers of festivals or other events also tend to offer arrangements to their visitors that include accommodation. It’s definitely worthwhile to research the opportunities in your area!
Global Distribution Systems (GDS)
Global Distribution Systems can be seen as intermediaries between travel suppliers and travellers. They offer travel agents access to accurate, real-time prices and availability of various travel-related services: flights, railway or bus rides, hotel rooms, rental cars, … For hoteliers, a GDS offers a very efficient way to connect with multiple travel agencies at once, fill in gaps last minute and sell rooms in bulk.
Although online travel agencies have undoubtedly gained the upper hand, traditional travel agents haven’t disappeared! They remain especially relevant for more complex or specific types of travel: large groups, families with small children, corporate travel, honeymoons, luxury cruises ... For these segments, they can propose interesting (bundle) deals while eliminating stress and hours of research. Some of the most well-known GDSs are Amadeus, AIC Travel Group, SynXis and ATEL.
Having a strong direct distribution channel is fundamental to a profitable distribution strategy. For most accommodation owners, their own website is the main generator of direct (commission-free) reservations. Not only do they bring in more profit, but they allow you to gather more information about your guests and build a closer relationship with them, resulting in more repeat visits.
Your own website is where you can truly showcase your assets and differentiate yourself from the competition. If possible, offer lower prices and better terms than OTAs to stimulate direct bookings. Convince potential clients with exciting extras and original packages. Guide them to your user-friendly Booking Engine and offer secure online payment options to guarantee the booking for both parties. With the Cubilis ratebox (included in the Booking Engine) you can highlight the unique advantages of booking directly. Read our previous article for more tips to convert your website visitors.
Although booking online is by far the most popular option nowadays, a small group of travellers still prefer to give the property a call instead. There’s no need to actively promote this way of booking, but ensuring that your contact details are easy to retrieve will cater to this select group and prevent them from choosing your competitor over you.
Did you know social media platforms like Instagram, Facebook, LinkedIn and YouTube are an important source of inspiration for lots of travellers? For hoteliers, they are an excellent way to communicate USPs and interact with (potential) customers. Attract more website visitors by promoting your accommodation on these channels, either through free organic posts or through paid advertisements.
How to manage your hotel distribution channels successfully?
The key to a successful hotel distribution strategy is a healthy balance between indirect and direct distribution channels. Commissions charged by third-party booking sites can be as high as 20%, so it's important to compensate these bookings with direct reservations. Increase your website’s visibility by applying SEO techniques (Search Engine Optimisation). In addition, you can create a page dedicated to must-visit places and well-known tourist attractions in your area (local SEO).
To further ensure the profitability of your distribution strategy, implement a well-thought-out pricing strategy based on market trends, special weekends, events and, of course, the competition. We highly recommend using a Revenue Management System (RMS) like RevControl or RoomPriceGenie to automatically optimise your pricing and maximise your RevPAR.
Keeping track of all these different channels manually can be quite challenging. A reliable Channel Manager gives you easy access, keeps your rates & availability updated and puts an end to overbookings. The Cubilis Channel Manager also generates clear performance reports, so you can easily monitor and compare your distribution channels and adjust your strategy if necessary.
Try Cubilis for free
Would you like to discover how Cubilis can help you achieve a successful distribution strategy? Request your free trial through the form below!