Distribution strategy in hospitality relates to choosing an optimal mix of channels to sell rooms with maximum profit. Distribution channels include direct ones (hotel’s own website or social media, phone reservations, email, etc.) and indirect ones like
- online travel agents (OTAs),
- Global Distribution Systems (GDS),
- metasearch engines,
- wholesalers (bed banks), and
- other resellers (like tour operators or destination management companies).
Every channel has its pros and cons. Generally speaking, direct channels are more profitable for hotels (since no commissions have to be paid to intermediaries) but usually have limited customer reach, while indirect channels enable more potential guests to find the property but come at a considerable price.
As a rule, a successful distribution strategy involves defining target guests, diversifying a channel mix, and optimizing property listings to be appealing to guests. It’s also important to constantly track the performance of distribution channels and related acquisition costs and adjust the strategy if necessary.The main technology that supports and automates diversified distribution is the channel manager. Other software that can help with building and maintaining a successful distribution strategy is a revenue management system, dynamic pricing solution, rate shopping tool, etc.