Optimal number of channels for your property

28.08.2019 YieldPlanet channel manager,
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Article created by YieldPlanet.

In our recent entry you could discover more about effective distribution management in OTA channels. Nowadays, rooms and apartments sale relies mainly on online reservations. We refer to both commission-free reservations made through your own website, as well as reservations received thanks to cooperation with OTA services. An effective online distribution strategy is undoubtedly a multi-channel strategy – but how many channels are required?

 

Less is not more

Creating an effective online distribution strategy is undoubtedly a difficult task. Additionally, it requires continuous monitoring and adaptation to changing market realities and customer preferences. For this reason, following the example of the best stock market investors, it is worth focusing on diversification. By basing sales of apartments on only one or two channels, we expose ourselves to unnecessary risk. So how many channels should be included in the optimal distribution strategy? Definitely as many as we can actively manage. Using multiple channels and actively managing only some of them is pointless.

Creating an effective online distribution strategy requires thoughtful moves

Creating an effective online distribution strategy requires thoughtful moves

 

Number of channels vs property type

For additional tips on the optimal number of channels we decided to analyze the data from reservations registered by YieldPlanet channel manager in 2018. However, before we proceed to their analysis, let us explain which properties from our database have been classified as hotels and which as apartments. And so the first group consists of so-called “stand alone” facilities, primarily hotels and aparthotels. The second group includes both apartments and facilities that can be assigned to the category of vacation rentals – i.e. holiday homes, campsites, guesthouses, hostels, agritourism farms, etc.

Based on our data, we can conclude that the number of channels usually increases proportionally to the size of the property. Larger facilities, i.e. hotels or a large number of apartments managed by one entity, usually utilize a higher number of channels. Due to the scale of operation, entities of this type also possess the tools making their multi-channel sales management much easier and largely automated.

OTA channels are like co-workers - choose them wisely

OTA channels are like co-workers – choose them wisely

There is also a certain relation between the number of channels and the type of property. In case of hotel facilities, the highest revenues are achieved by those that actively use 7-10 channels and for each of them apply a separate strategy and pricing policy. In case of apartments, the situation is slightly different, because each property has unique features which often require a slightly more personalized approach. Most facilities in this category (54%) use 4-6 distribution channels and it is these facilities that have the highest ADR (Average Daily Rate). 18% of facilities distribute its offer in 7 or more channels.

Remember that when building a distribution strategy for the managed apartments, quality is more important than quantity – simply connecting another OTA will not allow you to fully use the potential of your properties. If you do not actively manage all sales channels and make decisions based on the analysis of your data, you will not succeed in the long run.

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