Has your hotel overcome these distribution challenges?

  Posted in Channel Management

Has your hotel overcome these distribution challenges?

While progress is always seen as a positive, every changing trend in the hospitality industry makes business slightly more complicated for your hotel, with regards to distribution in particular.

As travellers become more savvy and demanding, and more intermediaries such as online travel agents (OTAs) enter the field, your hotel must fight a more complex challenge to achieve the right mix of direct and third-party bookings.

An economic downturn, especially in Europe, has only highlighted this by forcing hotels to expand their networks.

It’s important to combat these challenges in a strategic manner, for the sake of revenue and the potential profitability of the property.

Here’s what hotels need to take note of…

Hotel Challenge #1
‘There is no uniform approach to optimise distribution’

With the huge amount of interconnected interactions between guests, hotels and travel sites, along with the diversity of travellers, it’s impossible to expect a blanket method of distributing rooms to be successful. What works on one channel, or in one region, may not work on another.

Often it’s the type of trip that’s being taken which is the catalyst for the channel a traveller uses. This makes it very hard for hotels to determine a definitive answer to what is successful or what is the most cost-effective approach when distributing their rooms.


SiteMinder’s tip for overcoming this challenge:

It’s important to implement proper tracking and measurement strategies. Know where your guests are coming from and how much it is costing you to acquire them. You should also research what influences travellers the most when booking a room at your hotel to identify how you can improve all your channels.

You can do this easily if you have a channel manager or booking engine to produce accurate reports for you. Over time you will discover how to balance the channels where the majority of your customers come from, and your most cost-effective channel. Hopefully they’re the same one!

Tracking and measurement will show where guests are coming from and their acquisition cost.

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Hotel Challenge #2
‘Hotels are expected to do everything at once’

To drive revenue hotels need to attract as many customers as possible. To increase profit they need to do this for the lowest price possible. They need to stand out from the crowd and be visible everywhere travellers are searching for accommodation. At the same time, your hotel must be providing an exemplary guest experience and fostering a positive workplace environment. If you fall behind on one, the others will suffer. No wonder it’s a 24/7 job being a hotel manager!

While it may not seem like guest experience is linked to distribution, it truly is. If the bulk of your guests make reservations through Booking.com but are leaving negative reviews, your strongest point of distribution is being weakened.


SiteMinder’s tip for overcoming this challenge:

Ultimately, trying to be strong everywhere might risk not being strong anywhere. It’s important for you to play to your strengths, and always act from a guest perspective. Think about what best allows your hotel to create value for guests and how to create competitive advantages or alternative options to your direct competitors.

Don’t try to fight impossible battles. If you’re an independent hotel, forget about replicating the power of big chains but try to ensure you’re making better offers than other independents. You can make this easier by using smart business intelligence and pricing tools.

Hotel Challenge #3
‘Hotels must recognise the growing market of booking channels’

OTAs continue to dominate online sales. At the same time, the distribution space is getting even more crowded with metasearch entrants like TripAdvisor and Google. Even still, hotels have to prioritise direct bookings through their website, while also being aware of offline channels such as phone and walk-in, and of course, the still-relevant GDS network. A large and constant online presence is paramount, as is understanding true distribution costs.


SiteMinder’s tip for overcoming this challenge:

Market segmentation will help dramatically with understanding which channels to prioritise. Building personas and guest profiles as well as tracking consumer behaviour is vital here.

For example the US sees a high percentage of shopping activity on hotel websites converting to purchases on those websites while in China, despite relatively high hotel website shopping activity, hotels are then sold more frequently through OTAs. Additionally it should be noted guests 18-34 years old are more than twice as likely to book through an OTA than directly through a hotel website.

So if your guests are predominantly in this bracket, it makes sense to pay a lot of attention to your OTA profiles. With paid ads making direct booking more expensive than it has ever been, it might not be such a bad idea anyway.


One thing all hotels should have in common is the willingness to embrace technology that will help negotiate the many distribution challenges in the industry. You can learn more about your hotel’s distribution challenges in our free guide, here.

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