9 Not-To-Be Ignored Trends For Hotel Distribution In 2014
There has been a call for a shared strategy whereby executives cohesively handle all the channels and bigger mandates as part of a unified approach. So the team will be jointly handling various aspects such as digital marketing, rate and inventory management, management of reviews as well as data management and analytics.
EyeforTravel’s Ritesh Gupta talks to Chetan Patel, VP, Strategic Marketing & E-Commerce, Onyx Hospitality Group about what to expect from hotel distribution in 2014.
EFT: What were the major developments in hotel distribution in 2013?
CP: I will say the arrival of TripAdvisor Hotel Availability Check (HAC), the overall resurgence of meta-search, continued growth of business from OTAs and the rise of bed banks were some of the major developments in 2013. Social media and mobile also made their presence felt in a way that allowed further investment in the area.
2013 also saw continued growth of Internet channels. OTAs exploited the gap hotels have in understanding and utilising online technologies and maintained growth at feverish rates. Some of the players were really smart while others struggled to keep their market share. Bed banks made their presence felt and now others want a piece of the action. Direct business also grew but it has not been cheap although improved targeting and other tools continue to help optimise online marketing efforts.
EFT: What major trends do you forecast for hotel distribution in 2014?
CP: I expect to see a lot of major trends in the coming year, including:
- Further resurgence of meta-search.
- For Google Hotel Finder to finally make an impact after a few false starts.
- OTAs to continue to dominate but many suppliers will figure out ways to wrestle back control with smart marketing, social media and personalisation.
- There will be more noise about mobile and social media.
- Many will scramble to reposition themselves in the mobile world especially for Asian customers.
- Bed banks will continue to edge out traditional wholesalers and more wholesalers will move to dynamic systems to compete.
- OTAs grown will start going flat in more markets and competition from suppliers, Google and others will see the emergence of more interesting tactics.
- Big data and better targeting will improve yields for many hotels but competition for online customers will be heated more than ever.
- Technology providers, meta-search players and others will continue to find opportunities to get suppliers away from intermediaries.
EFT: What do you think distribution executives need to do to evolve?
CP: Distribution executives need to keep abreast of the changing distribution landscape with a keen eye on which players play what roles. They also need to understand their funnel and find ways to get all involved in order to influence and convert customers each step of the way.
EFT: With social media use on the roles what tools can hotels use to evaluate the impact of this on pricing strategy?
CP: I believe it is premature to use social media to guide pricing. A lot will depend on a hotel’s business mix. If the customer base is largely social media types, then yes it plays a role. The correlation between the two is still not entirely convincing although the vendors of systems looking at this data would have us believe otherwise. Social media can be a factor but it is one of many and we need to understand the weightage of each to make the call.
EFT: How challenging is the booking funnel for executives?
CP: Understanding the booking funnel is critical although most hotel entities do not understand it or pay little attention to it.
Brand building and social media are at the top end of the funnel while reputation management, reviews sites, meta-search, and SEM are important to a varying degree as you go down the funnel. Even the presence of OTAs needs to be managed properly to play a role in the funnel. This helps hotels to market themselves on many fronts and generate demand.
Relying solely on OTAs or playing only at the lower end of the funnel is very expensive and poor value. Much better ROIs can be obtained on advertising dollars and effort if you understand and utilise the funnel properly.
EFT: How can hotels maximise potential sales on all available channels in real-time?
CP: One should focus on having the right kind of channels first. Distribution costs must be paramount in the consideration of any channel. Having a clear cut idea of what channels you can do without will also help as the business may move to available channels if the demand is right.
The rest boils down to analysis of what channel brings in what kind of business and what that contributes to the hotel’s revenue in overall spend. Focus and encourage higher paying customers, lower cost channels and ruthlessly eliminate the higher cost ones if possible.
EFT: How does data flow performance owing to distribution technology enhance room package promotion planning and distribution on third-party channels?
CP: At this point interfaces are dealing mainly with rates and inventory. OTAs are not interested in selling add-ons..
For just promotions, what is beneficial is that now you have real-time intelligence on what works and what doesn’t. This helps hotel revenue managers quickly adapt their strategies. If an upgrade promotion works very well in a certain channel, this can determine the entire strategy for a particular time period. Being able to test promotions and quickly change because you can see it work in real time definitely improves yields and sales.