Is your distribution strategy aligned to be profitable in the new normal?

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Is your distribution strategy aligned to be profitable in the new normal?

The cast is by no means a one-size-fits-all scenario. Nor is it a task to figure out once and forget. Your distribution strategy must evolve over time and take into account several elements. These include your target customers, business goals, pricing, and more.

Covid-19 has of course affected all the elements that feed your Distribution strategy. In this blog, we revisit the key areas you need to consider to inform a distribution strategy that accelerates innovation, makes you resilient and increases income.

1) Refine your business goals

Before you start tweaking your distribution strategy, go back to the drawing board and see if your business goals are still valid. For example, you may have previously wanted to attract more international visitors. Is it always true? Do you need to improve your ability to fill last minute vacancies instead of relying on advance reservations?

2) Review your audience – target your best guests

Is your target guest the same as pre-covid? For example, you may have previously focused on tech-savvy, spendthrift young millennials. However, as the travel profile has changed markedly, you may now want to focus on the baby boomer market for their financial stability.

Know your target audience, who they are, their travel behavior, interests, location, etc is important in defining your choice of distribution channels. Your channel manager overviewas well as the Property Management System (PMS) are excellent sources of information.

3) Seasonality

The travel industry is very seasonal. A seasonal hotel distribution strategy takes advantage of this nature and combines it with online reviewsand in-depth analysis of your sources of income. With the right strategy, you can maximize bookings in high season while simultaneously increasing off-season bookings.

4) Maintain competitive rates

In addition to finding the right channel mix, competitive prices is an essential part of your distribution strategy. Having a real-time understanding of market conditions and prices offered by a comparable competitive set will help you optimize your rates.

When it comes to tariffs, it’s also important not to just set and forget. Now more than ever, dynamic pricing matters. By continually adjusting rates and stay restrictions based on local demand and market conditions, you’re more likely to sell more rooms at the highest possible rate. Pricing, occupancy and competitor activity are at the heart of an effective dynamic pricing strategy.

5) Track acquisition costs

How much does it cost to acquire a guest through a channel? This is easy to do with the data available from your channel manager and PMS. Simply divide the amount of money you spend on a platform by the number of guests you acquire to arrive at the acquisition cost.

Remember that your total cost per channel can include several metrics, including the cost of ads, maintenance, commissions, marketing creative development, and your net revenue per available room (Net RevPar or NREVPAR).

6) Choose your channel mix

Choose your booking channels target audience is most likely to use. A combination of chains is recommended for sustainable growth, with each channel playing a different role in your distribution mix. OTA are great for generating visibility and traffic, but live is generally considered more profitable. SMD is essential to reach the enterprise market. Metasearch platforms such as Google Hotels, TripAdvisor, Trivago and Kayak pull rates from multiple OTAs and play their own unique role by capitalizing on their search reach.

The purpose of each channel is simple: maximize your reach and visibility while minimizing cost. This is where the visibility offered by a channel manager on each channel becomes crucial.

7) Optimize your ads

It is important to ensure that each platform a client may see you on provides all the information they need to make the decision to book your property. This includes high-quality photos, compelling descriptions, and information about your location, amenities, and other features that appeal to your target markets.

Check your ads regularly to make sure the information is always accurate and up to date. Online reviews play an important role in decision-making, so pay close attention to them.

8) Use technology to your advantage

The final step in crafting a successful distribution strategy is to link all the strategies mentioned above with the good technology choices. Of channel manager for booking engine, revenue management software and a property management system, it is important to connect seamlessly your tools to inform a coherent and responsive distribution strategy.

This article is taken from STAAH’s ebook on Digital Marketing Toolkit for Independent Hoteliers. Download your full copy here.

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