Optimizing Brand.com and OTA Differently to Improve Income Performance

By Rhett Hirko Executive Director, Preferred Hotels and Resorts | October 11, 2015

Optimizing Online Distribution

The ever changing distribution landscape can be challenging to maneuver. Costly connectivity solutions often result in some degree of manual management of varied channels, which is time consuming. The good news is that a hotel usually finds a way to get content, rates, and availability out to the customer in some way. The bad news is that, often, this information is not optimized for particular customers, which can result in a lost booking. Understanding more about which customers book what sites and delivering the content and availability optimally to them is critical to a hotel's success at any distribution point.

Beware of the Dart Board Strategy

There is an endless number of distribution channels offered today. While some like GDS and Brand.com are straightforward, others, including CTrip.com, TabletHotels.com and OutTraveler.com may be more intriguing. At first glance, it may seem necessary to maximize your distribution in as many points as possible, whether geographically, based on customer demographics, or price oriented. However, each of these sites requires your content, rates, and availability. Depending on the connectivity options, loading all of this information accurately may be more difficult than it initially seems. One site that is fully connected, for instance, may not be able to handle more than 10 images or can only take a limited number of room products, while other sites may be able to accommodate more content but are fully manual. The combinations are limitless.

Be careful not to fall into the trap of "bigger is better." Broad distribution often leads to costly connectivity with a low ROI. Hoteliers that choose channel managers solely for broader distribution often are unaware of the consequences this strategy brings to staff efficiency and brand positioning. Results can be underwhelming. Sending "default" availability and content to sites without spending the time to optimize them is typical because it is impossible to optimize every single channel, especially if you connect to many of them. The dart board strategy – which means putting everything out there and hoping something sticks – is a wasteful strategy.

The annual business plan should identify a revenue strategy with specific targets. Ideally, the next breakdown would identify where resources such as marketing, sales and distribution would be placed to affect the strategy. The hotel team would then determine how to obtain the customers needed to achieve that target. For instance, if the goal is to increase transient ADR by $X.XX year-over-year, the team should peg resources required to achieve this. Will you use marketing dollars for a BAR rate acquisition campaign, for instance, or will you go after a new set of affluent customers who book online?

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Eco-Friendly Practices: Corporate Social Responsibility

The hotel industry has undertaken a long-term effort to build more responsible and socially conscious businesses. What began with small efforts to reduce waste - such as paperless checkouts and refillable soap dispensers - has evolved into an international movement toward implementing sustainable development practices. In addition to establishing themselves as good corporate citizens, adopting eco-friendly practices is sound business for hotels. According to a recent report from Deloitte, 95% of business travelers believe the hotel industry should be undertaking “green” initiatives, and Millennials are twice as likely to support brands with strong management of environmental and social issues. Given these conclusions, hotels are continuing to innovate in the areas of environmental sustainability. For example, one leading hotel chain has designed special elevators that collect kinetic energy from the moving lift and in the process, they have reduced their energy consumption by 50%  over conventional elevators. Also, they installed an advanced air conditioning system which employs a magnetic mechanical system that makes them more energy efficient. Other hotels are installing Intelligent Building Systems which monitor and control temperatures in rooms, common areas and swimming pools, as well as ventilation and cold water systems. Some hotels are installing Electric Vehicle charging stations, planting rooftop gardens, implementing stringent recycling programs, and insisting on the use of biodegradable materials. Another trend is the creation of Green Teams within a hotel's operation that are tasked to implement earth-friendly practices and manage budgets for green projects. Some hotels have even gone so far as to curtail or eliminate room service, believing that keeping the kitchen open 24/7 isn't terribly sustainable. The May issue of the Hotel Business Review will document what some hotels are doing to integrate sustainable practices into their operations and how they are benefiting from them.