The 6 hotel booking channels you need to create a profitable distribution strategy. Choosing the right hotel booking channels is a crucial aspect of your hospitality marketing strategy. But to decide the right channels to incorporate into your distribution plan, you must first learn about the different types of booking channels.
In today’s post, we’ll walk through the two different categories of hotel booking channels, the 6 different types, and we’ll wrap up with our top tips for creating a hyper-profitable hotel booking channel strategy for your business.
Let’s get started.
Before we look at the types of booking channels, it’s important to understand the two categories of direct versus indirect hotel booking channels.
Direct bookings happen when your customer books directly from you. Direct bookings should be a major part of your hotel distribution strategy because direct bookings maximize your profit per guest.
Other channels may even be free, but consider the time investment it takes to list your hotel on a third-party site, and then the extra time and effort necessary to manage those channels.
Indirect channels are equally crucial, but in one way or another, they will be paid: either with time or money.
Indirect booking channels are all of the channels where you can be booked via a third-party vendor. Indirect booking channels include online travel agencies, global distribution systems, metasearch sites, and wholesalers.
While indirect booking channels almost always take a commission percentage from every sale, they have a huge advantage when compared to direct booking methods:
Indirect booking channels are simultaneously booking channels and advertisements, and give your business more visibility online.
The best way to understand the importance of indirect booking channels is through reverse-engineering the sale. Think about it this way: when a guest wants to book a hotel room, where do they go?
Likely, either Google or their favorite third-party site (ex. Trivago, Kayak, Priceline, Expedia, Booking.com).
To get those customers, your property will need to be on those sites!
Now, let’s look at the primary hotel booking channels that your customers will use to book their stays.
Every time a guest schedules their stay directly through your website, you’re making use of direct website bookings. As previously mentioned, direct bookings are the most profitable for your business, so you’ll want to really compel your audience to book directly with you!
There are several ways to do this, but the easiest place to start is to make your website inviting, compelling, reflective of your brand, and easy to find.
Where direct website bookings take place directly on your website, the direct phone booking channel takes place–you guessed it–over the phone!
If your target audience consists of guests who aren’t tech-savvy, or guests who will need extra assistance with their requests (think: travel agents, event planners, wedding planners, etc.), you’ll rely heavily on direct phone bookings for your business.
Like direct website bookings, direct phone bookings are great because they maximize your profit-per-guest.
Many of the most popular websites used for booking hotel stays are online travel agencies, commonly abbreviated as OTAs in the hospitality industry.
Further, many of the most popular OTAs are owned by the same company. The Expedia Group owns online travel agency giants Expedia.com, Hotels.com, Travelocity, Priceline, Orbitz, and more. Conveniently, the Expedia Group OTA sites are interconnected, so you can make a listing on one platform and distribute it to several platforms they own.
While online travel agencies are excellent for “getting eyes on” your business and generating more bookings, they’re less profitable per customer than direct methods. Further, many online travel agencies take not just a cut, but a significant cut of each sale–often somewhere between 10% to 25%.
Therefore, choosing online travel agencies that balance profit with value is a crucial part of your strategy.
Metasearch sites include platforms like Google Hotel Search and Tripadvisor, which are more like search engines than travel agencies. They’re similar to OTAs, but because they often focus on a PPC (pay-per-click) monetization model than taking a percentage, they’re often significantly more affordable than OTAs. They are also just as popular.
Needless to say, with the value provided, metasearch sites are a must for your hotel booking channel strategy. They’re a fantastic way to maximize your visibility and profit, and are often the first stop for someone looking to book a room.
Whereas online travel agencies are considered B2C (business to consumer) booking channels, global distribution systems are B2B (business to business) booking channels. When you use an OTA, you’re selling directly to your consumer. Meanwhile, global distribution systems allow you to market to travel agents and agencies.
Therefore, your strategy and copy needs to shift to succeed. When marketing to your consumers, they’re more likely to make decisions without a ton of analysis. They’ll also generally prefer content that focuses on being engaging and entertaining, as well as shorter content.
Meanwhile, when you’re selling to travel agents, you really are pitching to another business. These agents’ reputations rely on choosing the right places to stay, so you’ll want to assure them that you’re trustworthy and your hotel exceeds their standards. You’ll generally want B2B content and copy to be longer, more informative, and more professional.
Some of the most popular GDS’s include Amadeus, Sabre, and Travelport (Travelport owns 2 popular GDS’s under its umbrella: Galileo and Worldspan).
Wholesalers are a unique strategy in that you’re selling rooms to them so they can turn around and sell them to other channels, like OTAs and travel agents. They buy rooms in bulk from you at a discounted rate, thus turning a profit on their own efforts.
Unfortunately, the profit margins for hoteliers are usually slim in this exchange, which has led to a love-hate relationship between hoteliers and wholesalers. However, due to their power and prevalence, it will likely be necessary to include wholesalers in your strategy to some extent.
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