Getting a booking is important.
But knowing how much it costs us to get that booking is even more so.
Hotels usually sell their rooms through different channels: their own website, phone, traditional agencies, Booking, Expedia and other platforms.
Each channel can bring different advantages.
OTAs, for example, offer enormous distribution reach and can help a hotel reach customers who would probably never have found its website directly.
The problem appears when the hotel looks only at booking volume and not at the cost attached to each channel.
Imagine two bookings for a room priced at €120.
One comes directly through the hotel's website.
The other comes through an intermediary to whom we must pay a commission.
Even though both rooms were sold for €120, the net revenue the hotel receives will not necessarily be the same.
That is why, within a Revenue Management strategy, analysing distribution is also essential.
It is not about eliminating OTAs.
In fact, they can be a very important tool for increasing visibility, especially in certain markets or seasons.
The goal is to find the right balance between:
visibility, booking volume, distribution cost and profitability.
We should also review aspects such as:
- availability by channel;
- rate parity;
- active promotions;
- restrictions;
- cancellation conditions;
- production of each channel;
- acquisition cost.
In addition, boosting direct sales can bring the hotel other benefits.
It allows a direct relationship with the guest, makes future loyalty actions easier and can reduce dependence on intermediaries.
A well-designed distribution strategy does not simply aim for more bookings.
It aims for the most profitable bookings possible, using each channel strategically.
Because two rooms sold at the same price can generate different profits for the hotel depending on where the booking comes from.