As hotel distribution channels become increasingly fragmented, attracting high-yielding ADR guests is about investing wisely in the proper channels and with the right partners.
A recent study sponsored by the Hospitality Asset Managers Association noted that even as revenues generated by hotels increased, the cost of guest acquisition was rising at the same rate. North American hotels typically were spending between 15 and 20 percent of their room revenue on marketing, promotions and third party channels such as online travel agencies, a much higher percentage than airlines, car rental companies or other travel industry segments. Outside of North America, these costs ran even higher.
Clearly, in order to be successful, hotels need to focus more on attracting high revenue producing travelers versus just driving pure volume. Exposure across all channels alone is no guarantee of that.
Therefore, a successful distribution strategy needs to take two things into consideration: high visibility and high yield. So, what should hotels look for in a distribution partner?
How wide of an audience will a partner help you reach, and what sort of success rate have they had in turning those into bookings for other hotels? Are you gaining access to only one global distribution platform, or are you getting access to multiple systems? How many agencies will you be reaching?
What sort of bookings can you expect from a partner? Are you primarily reaching travelers looking for the lowest price, or will high-spending corporate travelers have preferred access to your hotels? How do average daily rates booked through the partner compare across the industry?
Are you simply giving up your inventory at the lowest possible price, or does the partner provide you opportunities to make special offers such as rate-inclusive amenities, targeted discounts or special packages for VIP travelers?
Does your distribution partner offer marketing programs and multiple ways to attract the right customer such as digital and print marketing vehicles as well as industry events?
As distribution becomes even more fragmented in the future and high-yield customers more difficult to reach, answering these questions will be even more important for hotels determining where to invest their sales and marketing dollars. Rather than spread them thin, they should use them wisely and partner with the right distribution providers.
About the author
Eric Altschul is the CEO of ABC Global Services, a leading supplier of distribution services connecting hotels with travel agencies and travel professionals globally.
ABC provides services for nearly 8,000 agency locations, covering 76 countries around the world offering a number of solutions to help hotels build bookings and relationships with those agencies. ABC’s offering includes the industry-leading ABC Premier Hotel Program™, featuring more than 42,000 hotels around the world generating more than 23 million room nights and $3.8 billion in revenue annually, as well as ezBOOKbyABC.com a hotel booking engine exclusively for travel professionals. The engine, which aggregates inventory across multiple sources by consolidating rates at more than 600,000 hotels globally, won Travel Weekly’s Magellan Award in 2015.
Eric has more than 25 years industry experience in both corporate and leisure travel distribution with a strong track record of applying innovative marketing and technology strategies to help suppliers and travel professionals work more effectively. Prior to becoming CEO of ABC Global Services, Eric held senior level travel positions including Vice President, US Consulting Services for American Express and Senior Vice President, Thomas Cook North America.
For more info on how ABC can help your hotel broaden your reach among top agencies, click here.