Maintaining Your Web Site and Channels with the Right Information
By Mike Kistner President, Chief Executive Officer & Chairman of the Board, Pegasus Solutions | December 11, 2011
Given the economy we are all experiencing, it shouldn't be a surprise to anyone that industry numbers, as reported in The Pegasus View, show there has been a global decline in net reservations, length of stay, average daily rates (ADR) and net revenues. The most dramatic 2009 declines occurred in January and February, and the hardest hit was the global distribution system (GDS) channel, which represents corporate and business travel. Year-to-date, GDS net reservations are down 8.43%, which, combined with declining ADR (down 20.53%), places net revenues down 28.62%.
Even with 'staycations' abounding, the alternative distribution system (ADS) channel, which is comprised mostly of leisure-based online travel distributors, has fared better as the year has marched on. Through summer, year-to-date global ADS net reservations were essentially flat, but had seen positive growth in four of the previous five months. Not surprisingly, the ADR associated with these reservations was down at a greater rate than the GDS channel, going from $119.48 to $83.86.
We have information gleaned from the nearly four billion hotel transactions a month that go through the Pegasus switch, and from where we sit, we can see how certain bets are paying off for hotels. The hotels that put all of their money on corporate programs are probably wishing they had left something for the online travel agencies (OTAs). The other hotels that went all in with the OTAs are considering where they might have redeemed RevPAR with a more strategic and dynamic pricing strategy. And the hotels that diversified are probably faring pretty well, considering.
The Formula: Channel Management
Diversification here translates to distribution channel management. Successful marketing and sales of hotels begins with sound distribution - deliver your hotel to your target customer, whoever they may be: 18-year-old spring breakers, forty-something executives, retirees, or all of the above. The ways you deliver your hotel to those audiences are your channels - travel agents, corporate travel buyers, OTAs, tour operators, etc.
Keep in mind the term is channel "management," not channel surfing. It's not as simple as creating a Web site and sending it to all of your audiences along with a wish that they'll catch the wave and start booking your rooms. It's in-depth, everyday, active management of each of your channels to ensure up-to-date rates, availability and content. This process begins with your central reservation system (CRS) and your Web site.
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