Cost of Distribution Rising Faster than Revenue
According to this articles the latest studies by travel trade associations show that the cost of distribution is rising sharper than revenue. It recommends that Hotels look closely at their own performance statistics and avoid distribution channels that don’t preform well and cost too much.
These days, third party distribution channels have cost implications as well as brand consideration that go beyond the benefits of a booking channels. Some cost as much as 35 percent of the hotel room revenue and all tend to commoditize the brand to a large extent. See AXSES newsletter on branding consideration in OTA channels.
Harder Choices – More Collaboration Needed
The combination of traditional channels, such as the Global Distribution Systems (GDSs) and voice/walk-in, plus the diverse online channels of OTAs, metasearch and social-media, have made the task of getting the most profitable distribution mix for the property type more challenging than ever.
It is important that distribution, marketing and revenue work together to understand how developments across the various channels can affect the hotel’s revenue management, pricing strategy, brand integrity and ultimately profitability.
So what are some of the key challenges facing hotel operators and how can real-time search monitoring be used to address them? We have identified four key ones that can be addressed with real time data.
– See more at: http://ehotelier.com/insights/2014/07/09/hotel-channel-distribution-challenges-how-real-time-analytics-can-help?utm_source=Daily+Newsletter&utm_medium=newsletter&utm_campaign=July+10%2c+2014#sthash.yacI2jA6.dpuf