Hoteliers urged to prioritize profits in their distribution strategy

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ORLANDO, Fla. — It’s never been more important for hoteliers to be on top of their overall distribution strategy and be mindful of rates across the various channels they sell through, HSMAI conference experts said. Revenue Optimization 2022.

Speaking at the ‘Distribution Strategies that Optimize Profit and Accelerate Recovery’ panel, Andrew Rubinacci, executive vice president of business strategy and revenue at Aimbridge Hospitality, said discount channels no longer make sense because travelers will find these discounts regardless of the channel they appear on. .

“The general theme is that you can have the best marketing in the world, you can have the best brand, you can have the best of everything, but if it’s $30 cheaper somewhere, consumers are going to book it,” said he declared.

He recalled a conversation he had with a sales manager who thought their company-traded deals were down 5% at one point, only to discover that they were actually up 5%. %, but that these business travelers were more likely to book on lower cost channels.

“You really have to understand what’s going on,” Rubinacci said.

He said a distribution strategy should come down to not only achieving the best rate possible, but also getting the most out of each channel and defining key metrics to track success.

If that metric simply achieves the highest revenue per room available in a market, he said hotels could just “make a deal with Booking.com at 90% commission and tell them they have to fill every room every night. “.

“What we do as professionals is we try to optimize the whole asset with the most profitable income, and if you don’t understand the distribution, where are the tariffs and where [guests] where are they from, you’re just not going to be able to do that,” Rubinacci said.

Karen Codilla, director of revenue and distribution for Outrigger Hotels & Resorts, said the hotel distribution landscape is getting more complicated as more companies enter the space looking to disrupt the legacy model.

She said it was important for hotels to have up-to-date property management and guest relationship management systems to interact with new distribution platforms. This will be more important as hotels move to a more attribute-based pricing model, similar to airlines and other industries, and distribution systems will be able to showcase what is available to customers from the hotel.

“There’s no easy way to fit all of these details into our systems, and when it gets hard to do, sometimes we run away and say, ‘We don’t have the resources,'” he said. she stated. “Other times we step in.”

Mauri Berry, vice president of digital marketing for Remington Hotels, said success in keeping distribution strategies fresh often depends on internal strategies and how leaders use their teams’ time.

“It’s really about being engaged and intentional about really having a holistic approach,” she said.

It also means finding ways to incentivize employees to optimize distribution.

“So especially for junior and younger associates, you need to help them understand that their work impacts the bottom line, and that’s ultimate success and performance,” she said.

Rubinacci agreed that creating financial incentives tied to the bottom line is key.

“I actually eliminated the incentives for the leisure travel teams of the last two companies I was at because what we incentivized them to do was actually detrimental to the business,” he said. he declares. “We maintained their pay grade, but gave them different incentives, so it wasn’t just about generating individual accounts.”

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