The Most Effective Hotel Distribution Strategy Every Hotel Can Afford

People who read me often think I am entirely focused on disintermediation. That is a major mistake, because I believe that, when kept in proper proportion, intermediation is actually necessary. What generally puts me in a bad mood, as it is a sign of laziness and complacency, or perhaps a lack of know-how, is seeing properties with more than 50% of their distribution in the hands of OTAs—or worse still, in the hands of just one of them. There is no need to mention which one, as we all know who I mean.

This is an unequivocal sign of the widespread confusion in the hotel sector: believing that taking hotel marketing seriously means trying to disintermediate, especially in distribution as understood by those of us who use it without depending on it.

If we understand distribution as the means through which we seek to reach our potential guests, rather than the means through which guests make their bookings with us, our perspective on it will change forever. Therefore, when kept in proper proportion and when distribution adds value, it justifies its acquisition costs.

If the value of distribution via OTAs is so high for some hotels, perhaps they should consider that their sales management and marketing deliver no value whatsoever. This is where the problem lies, or as I once heard someone ask: do you sell, or do you lower prices?

Ultimately, disintermediation is not within everyone’s reach. It requires meeting a series of requirements:

1. Drive and determination, without clinging to the convenience of selling through clicks. I admit that staying in the office is more comfortable than going out to sell.
2. Resources and budget. Let us not kid ourselves: budgets must be allocated to marketing, along with dedicated staff to manage it.
3. Know-how. We live in a highly competitive world, where some have had a head start of many years; we compete with major brands and, let us not kid ourselves, this is playing in the Premier League: there is no room for error or time to experiment.
4. Patience, as we must be aware that results are not immediate, although they are always measurable. As we see progress, it should motivate us to keep moving forward.

and perhaps even in this very order of importance.

I will not deny that, in some cases, having seen the value contributed by certain intermediaries, I have been the first to recommend removing them. However, my approach with hotels is to achieve the most effective and intelligent distribution strategy that each can afford. Nothing could be further from the truth than to think that disintermediation is the objective; selectively, it may be a means, but never the objective.

The “most effective and intelligent distribution that each hotel can afford” may sound like a marketing term, but I believe we should examine the statement. The phrase itself is already enough to cause headaches.

Effective Distribution

Over the years, what we once knew as hotel sales and marketing has, for several reasons, evolved into mere contracting. Signing distribution contracts led us to believe they guaranteed occupancy; indeed, they did for a long time. There was nothing wrong with paying a commission to a company for bringing us guests. Excessive contracting, however, has become one of the main problems facing today’s hotel industry.

Managing multiple allocations is no easy task, nor is maintaining rate parity; and the greater the number of channels to manage, the greater the problem and the more resources are required to manage them. The worst part is that, even then, we do not fill our hotel except on the dates when we would have filled it anyway. Is that effective? I am afraid effective is precisely the opposite.

Intelligent Distribution

One of the questions hoteliers must ask themselves is whether certain distribution channels bring them business in the form of guests they might have secured themselves, perhaps even at a lower cost of acquisition per guest. Allowing every intermediary to compete with one another to generate business for the hotelier in markets the hotelier can handle themselves has serious consequences for average rate.

At other times, the cost of intermediation is not commensurate with the value generated by the intermediary, which makes a reassessment necessary.

This is the point at which hoteliers must take control of their distribution.

Affordable Distribution

Clearly, the broader the scope a hotel believes it can manage directly, the greater the effort and, ultimately, the cost involved in that positioning. It is only fair to acknowledge that positioning is something that must be approached cautiously and in a balanced way, paying particular attention to the return on each investment made for that purpose.