Let's realize 'Simplified Online Distribution'
Most hotels will agree on the fact that selling their hotel rooms online requires full focus on the performance of their distribution flow. A highly efficient revenue management strategy together with handpicked hotel software solutions is a crucial combination. However, in today’s online environment it will only become more difficult to have a clear strategy in place without making the flow too complex. Most likely, this is due to the complexity of sales channels and a highly competitive distribution market. So lets build towards a simplified online distribution flow.
SmartHOTEL advices their hoteliers to select on specialization and make the final decision based on service (this makes sense in the Hospitality Industry). Therefore, we have chosen a vision that is equal to the hotel’s general purpose: “Happy guests in every hotel”.
I would like to clarify the high complex distribution network hoteliers need to make use of, without getting caught in the spider web of distribution flows.
Starting from the demand, a guest will visit a direct sales channel that is able to fulfill their expectations; a hotel room, at a great location, available on the right date, for the best price. Examples of those third parties can be found in:
- OTA’s & Metasearch: Booking.com, Expedia.com & Tripadvisor, Kayak
- Hotel website: BookingSuite, Hoteliers.com, NetAffinity
- Offline/Travel agents: direct bookings, TUI, Thomas Cook, Sundio
95% of the demand is covered in the above-mentioned sales platforms. Only 10 years ago, manual work supplied the sales channels with room availability, rates and restriction data. Today we have several ‘suppliers’ that distribute the data on a much larger scale:
- Wholesalers: GTA, Hotelbeds.com, JAC Travel, HotelREZ
- Global Distribution Systems: Amadeus, Sabre, Travelport
There is a slight difference between wholesalers / GDS systems and Online Travel Agencies (OTA’s). The most important one is that those distribution platforms are never in direct contact with guests. Wholesalers & GDS systems supply Travel Agents by a retail (commission per booking) or merchant model (double commission model for merchant and wholesaler). Clearly, one could state that the reach of those distribution channels is huge, however commissions over bookings made is also higher than direct OTA bookings. Another aspect of wholesale or GDS bookings is that these bookings are mostly used for other type of travelling than for accommodation (meaning; flights and conferencing). In 2015 almost 90% of the GDS bookings were made for the airline industry (source: TravelClick).
Simplified Online Distribution via focus
Respecting the booking conditions, my advice would be to focus on more bookings that are collected from OTA’s. Why should you pay commission twice instead of having a clear strategy based on seamless OTA connectivity? Along with this decision I would highly recommend to simplify the distribution flow by having the Channel Management solution as a central heart of distributing room availability, rates and restrictions from the PMS/RMS to the sales channels without having multiple third party hubs in between.
I understand that the decision making on which Channel Manager fits your simplified strategy best is as difficult as simplifying the distribution flow. Therefore, we have designed the S2-model that helps you to choose wisely:
- Your partner should be specialized in your unique PMS/key channel combination coupled with a pro-active “total peace of mind” tailored service.
SmartHOTEL believes in a highly-connected world of deeply integrated technologies combined with tailored service. Our experienced team of hospitality professionals and smart developers are going all the way in solving the distribution challenges of over 2000+ (Oracle) hotel partners already.
SmartHOTEL has optimized 2-way connectivity to direct sales channels and additionally provides wholesale opportunities through highly selected partners. On the other side SmartHOTEL is Oracle’s preferred partner for distribution services, specialized on integrations with OPERA MyFidelio CRS including ORS for chains and Fidelio Suite 8. Please find the full connectivity list on http://www.smarthotel.nl/connections
How to get the most out of your channel manager.
In an increasingly complex online hospitality world it will only get more difficult to get noticed.
How to get the most out of your Channel Manager and select the right online distribution partner.
Read it in our free blog: “The S² model of successful hotel distribution”.