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The Importance of having a Diversified Distribution Strategy

Writer's picture: nicholaswillisonnicholaswillison

Updated: 2 days ago




Distribution analysis

Hotels use a variety of distribution channels to reach potential customers and maximize bookings. These channels can be classified into direct and indirect methods:

 

1. Direct Distribution Channels

 

These channels allow hotels to sell rooms directly to customers, eliminating intermediary costs.

 

a. Hotel Website

         The primary direct channel for bookings.

         Offers control over branding, pricing, and customer experience.

         Integrated with booking engines and payment gateways for ease.

 

b. Mobile Apps

         Hotel-specific apps for personalized user experiences.

         Provide loyalty program benefits and promotions.

 

c. Social Media Platforms

         Direct engagement with customers through platforms like Instagram, Facebook, and Twitter.

         Links to booking systems via ads or posts.

 

d. Walk-ins

         Customers who visit the property directly without prior bookings.

 

e. Call Centre's / Reservations Desk

         Traditional but effective for personal customer interactions.

         Used for last-minute bookings or detailed inquiries.

 

2. Indirect Distribution Channels

 

These involve third parties that help market and sell hotel rooms.

 

a. Online Travel Agencies (OTAs)

         Examples: Booking.com, Expedia, Agoda.

         Widely used by travellers for convenience and variety.

         OTAs charge commissions but offer high visibility.

 

b. Global Distribution Systems (GDS)

         Examples: Amadeus, Sabre, Travelport.

         Used by travel agents and corporate bookers to access a wide range of inventory.

         Essential for targeting business travellers and large-scale bookings.

 

c. Metasearch Engines

         Examples: Google Hotels, Trivago, Kayak.

         Compare hotel prices from various platforms, directing customers to booking sites.

 

d. Travel Agents

         Traditional offline agencies or online agents that arrange bookings for clients.

         Often cater to specific niches, like luxury or adventure travel.

 

e. Tour Operators and Wholesalers

         Package hotel rooms with other services (flights, tours, car rentals).

         Common for group travel and vacation packages.

 

f. Corporate Travel Channels

         Companies or organizations with negotiated rates for business travel.

         Bookings are often managed through GDS or travel management companies (TMCs).

 

g. Online Marketplaces

         Examples: Airbnb, Vrbo.

         Used for boutique hotels or properties offering unique experiences.

 

3. Alternative Distribution Channels

 

These innovative or less common methods can supplement traditional channels.

 

a. Partnerships and Affiliates

         Partnering with airlines, credit card companies, or loyalty programs for cross-promotions.

 

b. Event Platforms

         Target customers attending specific events, conferences, or exhibitions.

 

c. Influencer Marketing

         Collaborations with influencers to promote bookings via special codes or affiliate links.

 

d. Destination Management Companies (DMCs)

         Local experts who package accommodations with activities for tourists.

 

e. Flash Sales and Deal Sites

         Examples: Groupon, Travelzoo.

         Offer discounted bookings to drive last-minute sales.

 

Conclusion

 

A diversified distribution strategy, combining direct and indirect channels, is essential for maximizing visibility, reaching varied customer segments, and driving profitability. Balancing these channels allows hotels to reduce costs, optimize revenue, and maintain control over their brand.



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