A robust sales distribution strategy is indispensable for hotels striving to maximise revenue and drive direct bookings. By leveraging a diverse array of channels, hotels can amplify their visibility, target high-value guests, mitigate the impact of seasonality, and foster direct booking growth.In the ever growing online marketplace, the guest has a lot of choices to make. From searching to booking, guests are influenced by an average of 38 websites before making a reservation. Therefore, ensuring it’s easy for guests to book, whether direct or through third parties, is paramount to fulfilling a successful occupancy strategy and higher Average Daily Rate (ADR) goal.
Today, hotels must maximise visibility to travellers and central to this strategy is the ability to harness the power of different channels to capture the right guest profile. Hotels should use a matrix of channels where each channel serves a unique purpose in driving bookings and revenue through exposure to wide and targeted audiences, simultaneously maximising signposts to your own website, where possible, for direct bookings.
The Billboard Effect: navigating third-party providers
Hotels, irrespective of size or stature, need to extend their reach beyond their direct channels. A popular and cost-effective way to optimise this visibility is to leverage the Billboard Effect – where hotels can advertise for free on third-party websites, like Online Travel Agencies (OTAs) and metasearch platforms.
OTAs can drive booking volume, albeit at a high cost of acquisition (which can range from 15 – 30% commission), or hotels can maximise revenue by working with select niche partners to drive quality reservations.
Research has found the more visible your hotel is online, the more likely someone is to book it – both directly or via an OTA. For nearly 15 years, travellers have often been found to initiate their search on OTAs before exploring direct booking options; a Cornell University study found 65% of guests who booked directly on a hotel’s website had visited an OTA prior to booking. By having a strategic partnership with third-party channels – including well-known brands like Booking.com or Expedia – hotels can significantly boost their number of bookings.
It is crucial that hotels closely manage distribution of rates and inventory to prevent revenue loss, overbooking, or increased fees from third-party channels. With correct and competitive rates across all channels, hotels present a positive image of their property wherever a guest may find it.