Hotel Online Distribution Channels & Strategy

What if you're running a 12-room property and you're experiencing low demand during the off season? While you noticed that your competitors are getting more bookings and earning GREAT revenue, you're not able to sell a single room of your property.

Why? Potential travelers can't see your online presence, nor do they know that you exist.

The best way to reach more customers and get a pipeline of bookings is by showing your property across different online distribution channels. It could be creating a hotel website, having a social media presence for your hotel brand, or collaborating with OTAs.

Let's discuss in detail what hotel distribution channels are, types of distribution channels, and how you can create an effective distribution strategy.

What is hotel online distribution?

Hotel online distribution is a technique to fill the rooms by selling your hotel rooms to potential guests on multiple platforms like -  

OTA's (Online Travel Agencies), websites, Metasearch engines, social media pages GDS (Global Distribution System), direct phone booking, and more. 

In this way, hotels establish their presence globally, making it simple for people to search for hotels and reserve rooms offline or online from anywhere in the world. 

Why are hotel distribution channels important?

If you want people to notice your property, then it wouldn't be possible without promoting it across different distribution channels.

Audrey Handly, president of American Travel Express, says that – Out of these respondents, most of them are Gen Z and Millennials. This means people are passionate about making trips every year.

77% of respondents either plan to travel more or make the same number of travel trips they made last year.

So, don't you think that you should get your hotel name out by creating an effective online distribution channel strategy? The more you promote your hotel, the more visitors you get, and that eventually leads to more sales and increased revenue.

The other reason is that as many large chain hotels are competing with small and independent size properties like yours, it becomes important for you to have an online presence – whether that's an OTA, a website, or GDS.

But it's all about how well you manage multiple distribution channels at once.

How to create a distribution channel strategy for hotels in 5 simple steps?

Consider your hotel distribution strategy as the blueprint that will help you sell more rooms and get more bookings, but a right strategy becomes successful when you consider other factors such as – pricing, your target audience, location, and marketing resources.

1. Find out your business goals FIRST

To create a SOLID hotel distribution strategy, you need to be clear about your business goals.

Ask yourself – whether you want to build brand awareness or get more bookings for your property, then you need to marry the distribution strategy with your business goals and sales objectives.

2. Identify who your target audience is

If you're marketing to everyone, then it means that you're marketing to no one. This simply means you need to be clear about your target persona, who your customers are. A distribution strategy becomes successful when you've an idea of who you want to target.

A clear understanding of the target market is important for you to decide your distribution channels next.

For instance – if your target audience falls under the older generation category, then using phone calls to make reservations makes sense there.

But if you found out that 90% of your target audience is the younger generation, especially Gen Z and Millennials, then you'd focus on social media channels for promoting your hotel and getting direct bookings.

Ask yourself these questions to get clarity about your target audience-

Demographics of target persona such as their age and where they live

What's the #1 reason that makes them travel more?

What is their average length of stay at a property?

Are they leisure or business travelers?

Do they book a property on weekends or weekdays?

3. Find out 2-3 channels you'd market

You'll find out which distribution channels travelers use the most. It's about picking a channel that your target audience uses so you can focus your efforts there. You can also choose OTAs based on regions they have access to or age groups they serve.

Note: A hotel channel manager provides you with a snapshot of which is the best performing channel, and which rooms are mostly booked and what customers demand the most.

4. Compare key metrics performance with your business goals

Doing number crunching is important to see which distribution channel your hotel should pick based on how well it's performing in the past such as visitor numbers, conversion rates, user demographics, and commission rate that each OTA charges.

Let's say if your travelers mostly find you through OTAs. Then creating an online presence across OTAs can be a game changer for you.

Once you pick an OTA as your go-to distribution channel, you can do cost vs profit analysis to see how much commission an OTA charges from you and how much reach you get.

The more visibility an OTA gets, the higher the cost it comes with.

Note – By investing in a hotel channel manager, you can easily manage your room inventory and its rates across multiple channels. This means by connecting your PMS with a channel manager, you get more visibility across different OTAs.

More visibility = More bookings = More sales

5. Test and iterate your strategy accordingly

Your distribution channel strategy should never be treated as an ONE and DONE activity. It requires constant monitoring of the performance of new channels and existing channels to ensure whether it's driving the results as expected or not.

Of course, there will be ups and downs in the market, so you constantly need to analyze metrics such as occupancy rate, average daily rate (ADR), revenue per available room (RevPAR), etc. This way you can tweak your hotel distribution strategy based on data analysis.

5 Strategies for maximizing hotel distribution channels

1. Implement channel manager

Having listed several OTAs, sometimes hotels find it challenging to manage bookings.  

That's why a hotel channel manager is the most suitable solution to centralize all your distribution channels and manage all operations and bookings. 

Many channel managers like ChannelSyncro Combine smart pricing, in-depth monitoring, simple integration with OTAs, and real-time updates. That will certainly boost sales and maximize profits.

2. Utilize social media marketing

As everyone is on social media it is easy to get visible for businesses to find potential guests. This is why using social media marketing is a good option for those who want exposure.  

Implementing social media strategies like advertising, crafting compelling content, and posting hotel visuals on various social media platforms to increase visibility and reach. 

This can attract potential customers, drive traffic, and lead to more direct bookings. 

3. Improve search engine optimization (SEO)

For every hotel business, it is necessary to get top search results. To get found on the search results most hotel businesses opt for SEO marketing strategy.  

As it increases visibility and increases the number of visitors through organic search results.  

SEO marketing helps to target potential guests with a high intent on travel. 

For example, if someone searches "Best Hotel in Boston" on a search engine, the top ten hotels are displayed, and your hotel is featured among them.  

This is what SEO does: it increases your website's visibility and ranks it at the top of search results. 

4. Optimize direct booking

Hotels that have websites typically prefer direct booking. 

As with direct booking, hoteliers can reduce their acquisition costs, and increase occupancy and profitability.  

By building a hotel's website and optimizing it regularly by using various SEO tactics, it can see a visible increase in direct sales.  

With direct booking sites hotels can manage guests' data and give them preferred offers as per their liking.

Want to cut third-party commissions?

Create your website today with CreateWith(Hotel Website Builder) and enhance your direct bookings. 

5. Dynamic pricing

Before selling a room, hoteliers must consider pricing that includes dynamic pricing.  

As for a successful business in the hotel industry, dynamic pricing is the strategy that adjusts according to the market demands.

It allows fluctuation of prices regularly based on room availability, too-high or too-low demand, special events, travel seasons, etc.

The dynamic pricing can change even in an hour or day as it follows the demand and supply rule. Making it profitable for hoteliers to sell the room and increase the overall revenue. 

Manage hotel revenue with RevMaxi a revenue management software that surely increases your ROI.

By applying these strategies one can surely enhance their visibility among potential customers.

Furthermore, without using distribution channels it is not possible to build a successful hotel online strategy

Different types of hotel online distribution channels

1. Metasearch engines

Hotels can increase their visibility and direct bookings with the help of the Metasearch engine like Google Hotel ads and Trivago. 

This allows visitors to compare different pricing options such as best deals, room rent accommodation, etc.  

Thus, ensuring rates across channels and managing hotel profiles on the platform. 

2. Global distribution system (GDS)

GDS is a platform responsible for connecting hotels to travel agents to book hotel rooms, car rentals, airline seats, etc. as per the requirements and preferences of customers. 

Platforms like Amadeus, Sabre, and Travelport can promote hotels and their inventory across the globe with a wide range of travel professionals facilitating bookings for business travelers and tour operators. 

3. Online travel agencies (OTA's)

One of the most common online distribution channels is OTA's, which provides online facilities for hotels to list their rooms and reach a global audience.  

This creates extra exposure and benefits the hotel's business.  

Some of the most common channels are Expedia, Booking.com, and Airbnb.

These OTA's usually charge commissions for bookings made directly through their platforms, but in return, hotels get access to a greater pool of travelers. 

4. Hotel wholesalers

Wholesalers buy rooms and hotel inventories in bulk and distribute them to several market segments.

As they are an important part of travel agents and travel suppliers.

That partnership can be very beneficial in filling the empty rooms and finding guests who would like to buy a package deal.

The wholesaler never sells the room directly to the customer as it works business to business.

Lastly, these channels provide global exposure to every range of hotel and resort and help to maintain brand visibility among potential customers.

How can BOTSHOT help you with managing your hotel distribution channels?

The hospitality industry has become more competitive and selling rooms has gotten harder than ever. These days every hotelier wants to increase their market reach, but it won't be possible without creating an effective online distribution strategy.

But it all boils down to creating a balance between direct and indirect distribution channels. By relying on a single distribution channel, for instance OTAs in this case, you will get increased online exposure for your hotel. But it would eat up your profits in the long run.

The other way is to invest in your own hotel's website and watch your hotel grow.

At BOTSHOT, we provide you with a centralized dashboard to manage your inventory and room rates across multiple channels in real time. These include Expedia, Booking.com, MMT, etc.

As our OTA is integrated with your property management system, whatever rates and room inventory your PMS holds, the same is updated on the channel manager.

This way, you can get more online bookings by diversifying your presence across different channels.

Frequently asked questions:

Q.) What are the benefits of online channels?

A.) Here are the few benefits of online channels -

• You can target different sets of audiences. The more channels you're on, the more visibility you get and hence more reach. Ultimately this increases your hotel's profitability.
• You can reach more guests. Being visible on OTAs such as Booking.com and Hotels.com caters to a diverse set of audiences. This way you can get more bookings even during the slow season.
• Third party online channels also provide you with insights about your guest behavior and help you fine-tune your services to better enhance guest experience.

Q.) What is the most expensive distribution channel for hotel rooms?

A.) The most expensive channel of distribution for hotels is online travel agencies. It's because OTAs charge high commission, that's nearly 15-25% on each booking. Such a high commission rate will reduce the profit margins of hoteliers.

Though OTAs bring more bookings to hoteliers, it's expected that in 2030, a greater number of hotel bookings ($400 billion) will come through direct digital channels.

Q.) What is the biggest hotel booking platform?

A.) Here are a few of the biggest booking platforms:

• Booking.com
• Expedia
• Priceline
• Hotels.com
• Agoda