4 tips to help hoteliers create an effective distribution strategy

Hoteliers who want to gain and hold a competitive edge in today’s fragmented marketplace need to implement a diverse distribution strategy that makes it easy for potential customers to find them, and then engages those customers with relevant content.

Creating that strategy in a rapidly changing and highly competitive environment can be a daunting task. Here are four guidelines from industry experts:

1. Be everywhere your customers are searching and booking

The first step is to make sure customers can find you.

Travelers are embracing tech innovations in the hospitality industry by searching and booking on an ever-expanding mix of direct and indirect channels including general search engines, brand.com websites, major OTAs and smaller regional OTA players, and social media channels.

“Consumers now have the ability to search and find information and take their inspiration to make a decision from so many different channels or venues that you almost have to have a really diverse distribution strategy,” says Ben Alves, vice president and general manager of the Americas for Sabre Hospitality Solutions.

“Not only is it important; it’s critical for hotels and brands to think about how to diversity their strategy to get more access, more reach, into the marketspace for the kinds of consumers they need.”

While it’s a given that consumers are now conducting travel searches on multiple websites, often from multiple devices, before making a booking, the exact number of sites visited and the patterns of those visits varies depending on the research source and how a ‘visit’ is defined, as well as demographics.

The one commonality is that the majority of travelers across age groups visit multiple sites to gather inspiration and information, and to book.

Research from Google shows that travelers on average visit 18 websites, including revisiting the same website on the same or a different device, prior to booking.

Expedia data shows that the number of sites visited heats up the closer travelers get to conversion, with U.S. travelers visiting 12 online sites six weeks prior to booking and 23 sites one week before pulling the trigger on a travel purchase. The numbers vary slightly for Canadian and British travelers.

Providers have done their own research. “We have data that shows consumers visit a minimum of 24 websites or search functions before making a decision,” says Alves.

Demographics come into play here and there are generational differences.

General search engines are consistently the top shopping channel, but millennials are most likely to use them, according to Phocuswright’s report on U.S. Consumer Travel 2018: Shopping and Booking.

Supplier websites are most popular among older adults and seniors. OTAs are the most popular booking channel across age groups, but especially among travelers age 35-54.

2. Choose your channels based on understanding your customers and your assets

“The first thing to consider is the customer,” says Alves. “Who is the targeted customer you are going after? What kind of profiles match the target audience you are trying to bring in to your particular hotel, brand or chain?”

“Understanding your customer, your assets and your value is key,” says Jenny Mays, vice president of product management for Sabre Hospitality Solutions.

“It’s not about shock and awe and being everywhere. It’s about being everywhere that matters, and making sure you are doing that in a thoughtful and effective way.

"That’s the part that’s difficult, and there is no one right answer. It’s based on your property and your customers, and the more of a clear understanding you have of those things, the better you can do on your overall distribution revenue optimization.”

While hoteliers understandably would prefer that most bookings originate on a direct channel versus OTAs, Mays notes that it’s extremely difficult to drive customer behavior if hoteliers are not present on the channels customers want to use to interact with them.

“If it was just up to the hotel side it would be 100 percent direct distribution, but you can’t dictate how your customers are going to behave,” she says.

“Where hotels fall short on this is they preference the content or the rates on direct channels over indirect channels to make it more attractive for customers to come through a direct channel. That’s not a bad thing, but to the extent that you are not putting your best foot forward everywhere you need to appear, you could be harming your overall brand.”

She recommends choosing a distribution channel mix based on data and experience to determine how much occupancy can be driven through direct bookings including brand.com conversions, walk ups and seasonal business, and return business.

“Typically, there is still some occupancy you will need to go get, and that’s where you can start looking at some of the indirect channels,” says Mays. “What drives indirect marketing is thinking about who are the customers I am not going to be able to reach unless I access them through my indirect channels.”

According to Richard Wiegmann, managing director and chief commercial officer in EMEA at Sabre Hospitality Solutions: “It’s vital that you know your marketing channel mix well. The base for that is you need to know your user groups, you need to understand who would potentially stay in your hotel.”

In choosing the right channel mix, “There has never been a universal answer,” he says. “It’s very different by location, by setup, by demand patterns.”

As an illustration, Wiegmann notes that a significant amount of hotel business in the Mediterranean is tied to tour operators and is still contracted and processed in the analog world.

“Hoteliers there need to invest in that until the market is ready for the digital side,” he says.

3. Present consistent, complete and engaging content across all your channels

Consistency in rates, content and messaging across all channels is critical to the success of a diverse distribution strategy, and one that some hoteliers ignore.

“Consistency in the messaging is about your brand at a foundational level,” says Mays. “To the extent your messaging varies by channel, your brand is not as strong and consistent as it could be. Customers don’t know quite what to expect and it maybe a little confusing.”

“If you have a diverse strategy, which means you are employing direct and indirect channels, experience means everything,” adds Alves. “Customers know it and remember it. They want a consistent, very focused experience no matter which channel they decide to use.”

When it comes to specific promotions, using the same brand message, rules of engagement, and campaign attributes across all channels, “is the best use of your digital marketing dollars,” according to Max Starkov, founder and director of hebsdigital hotel marketing firm. “It’s the most cost effective and the most efficient.”

Content needs to be engaging and complete as well as consistent, according to Mays.

“Once you’ve decided which channels you want to participate in, make sure you are being complete about it,” she says.

“It’s not just about getting your availability and rates out to the sites. You want to make sure that your static content is really good and your descriptions are accurate and complete. It’s important that all of that is done well and done consistently across all your different channels.”

Mays adds that “Some hoteliers are very good at it, and others aren’t. The more data oriented and objective you can be, the more specific you can be in understanding your customers.”

Some hotels in the luxury sector excel at understanding and presenting their customers with engaging, relevant and personalized content and interactions.

“They use their customer’s name, and they understand what their preferences are,” Mays says.

“They really get to know what makes their customers tick and they cater to that. Not many properties can do this at that level of depth, but even understanding trends in your market, your key feeder markets, and your seasonality can help you guide your marketing spend and marketing speak in the right direction.

"Data and analytics tools, and product and guest services tools, can help hoteliers make these decisions in an optimal way.”

4. Tap into diverse areas of expertise internally to create your distribution strategy

As the number of channels proliferates and travelers increasingly search and book accommodations and other forms of travel on mobile devices, hoteliers are starting to tap new areas of expertise inside their organizations to set distribution strategy.

“The responsibility for distribution and associated capabilities such as marketing has changed,” says Wiegmann.

“It was part of the standard marketing team for many years, then it moved into the commercial side of the business where I think it belongs, in close collaboration with other departments in the hotel or the hotel chain.”

Tapping a diversity of expertise is just as important as having a diverse channel mix, according to Alves, who says hoteliers are beginning to include input from their revenue and rate management and digital marketing departments to develop more rounded and more effective distribution strategies.

“We’re starting to see a real focus in on the importance of a digital strategy that helps hoteliers manage distribution and revenue much more effectively,” Alves says.

While big hotel chains are leading the way in recognizing the importance of digital in their distribution strategy, it’s a trend that is picking up steam throughout the industry. “It’s no longer a hobby,” he adds. “It’s more a focused business practice.”

A diverse distribution strategy, and involvement from diverse departments in creating that strategy, help hoteliers control when and where they need to compete to succeed.

“You need to understand where your business is coming from so you don’t spend a lot of effort on channels that don’t produce for you,” Wiegmann says.

“You need to know the ones that drive benefit to you. That benefit can be the number of guests or it can also be the cost of distribution. A diverse distribution strategy is key to your success and your independence from channels’ changing behaviors on commissions and cost of distribution.”

He adds: “There is no doubt that, especially for independent hotels, it’s a struggle. You need to be permanently on your game in order not to miss anything.”