Distribution channels: which ones should you choose?

30.08.2019 YieldPlanet channel manager,
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Article created by YieldPlanet.

When planning an effective distribution strategy for a hotel or apartment, there are many factors to consider. The first and probably most important is the type of managed facility. Some channels work well for hotels, while others are a better match for apartments. What is the optimal number of channels for your facility? What channels should you deploy to maximize your revenue?

Sales channels recommended for hotels

Hotels and aparthotels most often use from 4 to 6 sales channels and try to actively manage each of them in accordance with a carefully prepared, individualized strategy. The highest ADR (Average Daily Rate), however, is obtained by properties that distribute their offer using 7-10 channels – EUR 67.69 vs EUR 62.71. The most important source of reservations for them are naturally large OTA websites, including above all Booking.com (53%) and Expedia (14%), which are accompanied by smaller or niche websites (7%), allowing to acquire customers at a much lower cost. An important source of reservations is also your own Booking Engine (6%), a hotel reservation system that allows you to attract customers without having to pay commission to agents.

Unfortunately, without the help of third parties, many hotels, especially the large ones, would have significant problems with maintaining a high booking rate, hence the so-called wholesalers (intermediaries between hotels and travel agencies). In case of hotels using 7-10 channels, wholesalers are responsible for less than 13% of reservations.

Mention should also be made of HRS and GDS services, which make it easier to reach a corporate client – in total they generate approximately 6% of reservations.

Optimizing the number of sales channels allows you to significantly increase the ADR

Optimizing the number of sales channels allows you to significantly increase the ADR

Optimal sales channels for apartments

According to the YieldPlanet system data, apartments using from 4 to 6 channels achieve the highest ADR. However, this is not the only element that distinguishes their distribution from the distribution of hotels. Mention should be made of a much lower share of direct bookings (2%), as well as a total lack of GDSs. Apartments are still losing to hotels in terms of corporate tourism, so this should not be surprising. This does not mean, however, that business tourism is 100% based on hotels. Both Booking.com and Airbnb are more and more boldly marking their presence on this market, and it is these websites that generate the most reservations for apartments – their total share for YieldPlanet customers is 77%. Interestingly, wholesalers also have a significant share (4%), which is why this channel should not be forgotten when planning the optimal distribution strategy.

Apartments are more and more clearly marking their market position

Apartments are more and more clearly marking their market position

In order to maximize sales, you should constantly monitor the level of sales and conversions in individual channels and frequently experiment. Much depends on the specifics of the business, the target group, the number of managed apartments and their individual characteristics. Only by trial and error will you be able to design a winning distribution strategy.

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See the previous articles in this series:
How to effectively manage your booking portals >>>>>
Optimal number of channels for your property >>>>>

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