Changing the Channels
Making Distribution Channel Management Work for You
By Clifford Ferrara Executive Vice President of Sales & Revenue Generation, Chesapeake Hospitality | January 19, 2014
Although there are different ways to slice and dice the various distribution channels, they can be broken down into a few primary channels: direct hotel bookings, central reservation office (CRO), online avenues (through both brand and independent websites), Global Distribution System (GDS) of four major global channels utilized by travel agents, OTAs, and e-commerce.
For hotel owners and operators, a deeper understanding of what distribution channels are producing, where there are additional opportunities for growth, and what can be done to achieve that growth is at the heart of effective, efficient and impactful hotel management.
Back to Basics
The power of distribution channel management is that it gets to the heart of sound business principles. The fundamental priority of every management team when taking over a hotel is to look for opportunities to improve topline results-and recognizing where your business is coming from is an essential first step. It is the key to figuring out how and where improvements can be made going forward. Before creating a marketing plan and determining where your marketing dollars should be spent to get the most bang for the buck, every manager needs to ask and answer the following questions:
- What channels are producing most of your business?
- What are the costs/fees per reservation associated with each channel?
- What is the optimal mix that you want coming in through each of the major channels?
The answers to those questions can help you calculate what is the most profitable distribution channel management balance for your hotel, target the channels that provide you the most revenue for the least cost, and develop a cohesive and coherent plan to maximize ROI across all channels.