Your hotel has a number of options when it comes to distribution. You can receive direct bookings through your website or the phone, advertise on online travel agency (OTA) booking sites, and utilise a plethora of other channels to grow your business. But to maximise your hotel’s revenue, it’s of vital importance to use a mixture of channels that meet the needs of your target market(s).
Below, we cover a handful of the most popular hotel distribution channels, as well as strategies and examples for taking advantage of those channels.
What is a hotel distribution channel?
At its highest level, a hotel distribution channel is anywhere — online or offline — that properties can sell rooms to potential customers. Examples of hotel distribution channels include hotel websites, online travel agencies (OTAs), global distribution systems (GDS), metasearch sites, direct phone bookings, and more.
How to build a hotel distribution channel strategy:
Your hotel's distribution strategy is a plan for booking rooms at a profit using a variety of channels. The right strategy for you will take into account your pricing, target audience, location, marketing resources, and more.
To create the right strategy for your hotel, you should consider a few key things:
- Determine your business objectives. The goal of most hotel distribution strategies is to increase visibility with your ideal guests, thereby increasing bookings. Make sure that your distribution strategy aligns with your sales objectives and target metrics.
- Find your target audience. Your brand is likely to appeal to certain demographics and types of customers and be less appealing to others. Your distribution strategy should take your audience into consideration so that your visibility is greatest for your target market. Some channels, like phone reservations, will appeal primarily to an older audience, for example, while channels like direct social media bookings may be more appealing for a younger audience.
- Compare key metrics across channels. After you determine which metrics are important to your hotel based on your goals and objectives, you’ll want to compare those across your distribution channels. Some channels will offer more visibility than others, but may also have higher costs or slimmer margins. The right strategy will find a mix of visibility, profitability, and optimised brand messaging.
- Test and optimise over time. Your distribution strategy should not be static. You should continuously test new channels, optimise existing ones, and make sure that your core channels are delivering profitable results.
Popular types of hotel distribution channels:
1. Direct website bookings
If you’re like most hotels, your website is probably the primary source for direct bookings. Direct bookings are often more profitable, more likely to result in repeat visits, and better optimised for upselling. Because of this, most hotels consider their website as the No. 1 distribution channel in their distribution strategy.
In order to increase hotel direct bookings, make sure that the mobile version of your website is optimised for simple and speedy bookings. Many guests are now researching and booking hotels on mobile devices without ever opening a desktop browser, so you definitely don't want to miss out on that business.
You’ll also want to make sure that your website is optimised for search engines and includes location-specific terms to increase discoverability. Clear navigation, responsive design, and a seamless booking experience will all increase the chances that guests choose this valuable hotel distribution channel.
2. Direct phone bookings
Some target audience demographics, such as older adults, travel agents, and event planners, may find direct phone bookings to be the most useful way to get in touch with your hotel. This is especially true if the potential customers have specific questions related to their stay, or if their booking is complicated in some way.
Your call center, reservation line, and front desk are all channels that offer an opportunity for human connection and tailored customer service. Make sure that your staff are trained to take a booking, even if the guest calls the front desk.
This distribution channel is often low-cost because it is a direct line of communication with your guests. You can also get valuable feedback from this channel, since you’ll be able to hear why a guest made a booking (or why they chose not to book).
3. Online travel agencies (OTAs)
There is no getting around it: Online travel agencies are a ubiquitous and integral part of the hotel booking process. Sites like Priceline, Expedia, Booking.com, and Orbitz have huge audiences and are a great way to reach guests that you might not otherwise have reached.
You don’t have complete control over the messaging about your hotel on an OTA, but you can optimise your listing with photos, highlight certain amenities, and offer attractive pricing for OTA audiences. You should focus on OTAs that your target audience uses and understands in order to keep your costs down.
4. Global distribution systems
Global distribution systems (GDS) are an important distribution channel for connecting with travel agents. Travel agents use this system to browse hotels, view rates, and check availability. Well-known global distribution systems include Amadeus, Worldspan, Sabre, and Travelport.
Global distribution systems are helpful for keeping your information up-to-date with travel agent systems all around the world, as well as providing real-time pricing and availability information. To take full advantage of this channel, set your pricing at levels that will remain competitive against similar properties but high enough that you can overcome the GDS fees.
5. Metasearch sites
The user experience on metasearch sites is usually particularly good, with a simple booking process and easily-searchable information about your hotel.
Here are a few ways you can maximise your bookings from metasearch:
- Make sure that your pricing in search engines matches the price listed on your website.
- Test your cost-per-click (CPC) to balance your costs and your competitiveness with OTAs.
- Adjust your strategy for the metasearch site that you’re targeting. Some sites will attract visitors with less booking intent, and should therefore have lower CPCs in order to be an efficient distribution channel.
Wholesalers serve as an important link between travel agents and travel suppliers. Although profit margins may be thin for this channel, it's a helpful way to fill last-minute space at your hotel or book large blocks of rooms. Although this channel is important to increase occupancy, it should not be one of your primary distribution channels.
Technology you can use to manage your hotel's channels:
1. Channel management tools
A channel manager is a tool that helps you manage your distribution strategy, keeping track of all of your channels and providing useful performance insights. These tools are very helpful for keeping everything in one place and making sure all of your information is up-to-date.
2. Reputation management tools
Reputation management tools help you monitor online channels for mentions of your hotel and respond to guest feedback in a timely manner. This may not seem related to distribution, but if guests are leaving negative feedback on your most popular channel, you’ll want to respond to it right away to make sure that channel stays strong for your business.
3. Revenue management tools
Your revenue management system helps you to plan and forecast demand for your rooms through peak periods, slow periods, and everything in between. It’s also a great tool for determining the right price bands on each of your hotel distribution channels. By analysing your pricing, expenses, and profit across multiple channels, you’ll have a better idea of which channels are driving the most profitable outcomes for your hotel.