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What a world on standstill teaches us about our approach to distribution

By Karla Brooklyn, Global VP - Enterprise at SiteMinder

  Posted in Opinions



Having been brought up in the world of hotelling, and with family and close friends who remain in the space, the last few months have served as the disruption that none of us asked for, but one that nonetheless forced us to pause for perhaps the first time in many years.

Until now, revenue has been the holy grail for every hotel, often due to—or sometimes at the expense of—low occupancy. Yet, the reality is many hotels today are unable to realize neither revenue nor occupancy, rendering traditional metrics obsolete in a COVID-19 climate.

In the wake of the pandemic, a new, far-more-inconvenient level of complexity has arrived for hotels seeking to attract guests. For a segment that has benefited from rising volumes of tourism in recent decades, the hotel industry has had to reimagine their long-held strategies for a world where there are no guests and the only strategy is survival.

Yet, months from now, will a hotel’s mere existence be its only measure of success?

The need to keep moving

While it may be hard to believe that the current crisis will end one day, we can rest assured that it will and hotels would be well served to start preparing for that day.

Distribution may be the furthest thing from every hotelier’s mind right now—after all, what’s the point of being online if your guests aren’t looking?—but while the movements of your customers may be static, your approach to distribution shouldn’t be.

The inconvenient truth is that hoteliers need to work on a more dynamic and multi-faceted distribution strategy than ever before.

When the day comes to welcome guests again, a fixation on price and revenue optimization, alone, will not suffice. Rather, a broader range of processes that include day-to-day channel and space optimization, analysis of market factors impacting demand, and forecasting using deeper insights, will be needed.

Additionally, it is no secret that corporate travel will unlikely return to the same numbers as before COVID-19, as companies have (involuntarily) learnt that today’s high quality teleconferencing tech can be a far less costly, and risky, substitute to travel. For hotels that have traditionally relied on this segment, this loss comes with the need to create a range of new revenue streams to compensate.

Getting closer to the customer and innovating to maximise every square meter

Already, we are seeing rooms being converted to offices for those not able to easily work from home, a range of tangible value-adds being created to uplift hotel stays (better in-room dining experiences and easy access to private transfers, as examples), and greater booking and loyalty program flexibility. As a huge emphasis is placed on cleanliness and customer safety in all aspects of the hotel, lower profit margins have also had to be accepted temporarily to ensure that hotel brands remain perceived as safe spaces.

Ultimately, however, hotels must begin to optimise beyond the room, today and tomorrow. And, therein lies a variety of both obstacles and opportunities. Is there potential for hotels to provide exclusive use of gym spaces for a set price, for example, as people seek to safely exercise? What is my hyperlocal market missing today? For every square meter of underutilised space, hoteliers have the ability to commercialise that space to local and domestic communities, so this should be an area of focus at this time.

Looking ahead

As the global travel industry largely lays in wait for a world able to freely leave home, the implications for hotels will continue to be wide-ranging. There’s no doubt recovery will come, but what that will look like, and how long it will take, remains purely hypothetical.

Indeed, uncertainty has been a sector-wide theme since the COVID lockdown began, but for hotels mapping recovery and acting with market-specific intelligence to gain an element of surety, they can now see how booking momentum is changing daily. The World Hotel Index by SiteMinder was created with those hotels especially in mind, to provide insight into when guests are likely to return post-pandemic.

The months ahead present deep challenges that we’ve never before experienced, but if there’s one thing I know to be true about this industry that has given me so much, it is that resilience and passion lie at the heart of every hotelier. The world may have stopped traveling, but our strategic approach to distribution and welcoming guests again in the future should not stop with it.

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