Distribution Channel Analysis: a Guide for Hotels

Cindy Estis GrEEn & Mark V. LoManno

PubLishEd by thE hsMai Foundation

A N A H & L A A N d S T R S p e c i A L R e p o R T

120 AN AH&LA ANd STR SpeciAL RepoRT

How long have you been in hotel industry? How long have you been involved with distribution issues?

For the past 10 years i have been a faculty member teaching courses and writing about distribution, pric-ing, yield management and economics. Through my work experience at Hertz and consulting, i have been involved in distribution for over 30 years.

In what way does your current role involve distribution?

i teach; do research on; and consult on the topic daily.

Where would you say distribution fits into the overall hotel management landscape? Why does distribution matter?

distribution is a part of demand management. The latter involves distribution, marketing, sales, and pricing. At the property level this activity can be managed by an individual or a team. For chains it is parsed out to differ-ent staff elements at the regional, brand and chain levels. even ownership organizations are involved. distribution as part of demand management connects the customer directly and indirectly to the hotel and the chain for service value communication, delivery and appraisal.

What are the top 3 current issues that will have the greatest impact on hotel distribution in the next two — three years?

expanding influence of Google as a company in social search and mobile marketing.

Role of mobile as means to market and deliver service

complexity of managing distribution both cost effec-tively (optimum Roi) and in concert with other demand management activities.

What is the smartest move you have seen in hotel distribution?

…those moves being made by managers who are stay-ing informed about developments in distribution and not moving too quickly to chase a particular develop-ment until its value is better understood: dabble for understanding; commit for a measurable certainty of financial return!

What is the single biggest oversight or misstep you have witnessed in the last two years?

Hoteliers are taking a far too emotional approach to the evaluation of oTAs as a marketing and distribution tool. The thousands of hoteliers that used oTAs over the past 2 years as a means to shift or protect share likely did so for very sound reasons. The really smart ones will figure

out how to use them going forward in a long-term, high-risk, slow-growth world economy.

What three things can you tell a hotel general man-ager, owner or asset manager about distribution that would have the greatest impact on unit level profit?

What is the next thing that you predict will disappear or gradually fade away that is currently a part of the distribution scene?

criticism of the oTAs will give way to better marketing and better understanding by hoteliers. in part, oTAs made sizeable profits because they delivered what hoteliers could not. better marketing and demand management by hotels and better options than oTAs for hotels will produce sizeable profits for option pro-viders and more opportunities for hotels.

If you had a crystal ball, what emerging technologies do you anticipate could be game changers, or at least have the greatest affect on the distribution landscape in the next 2–3 years?

First, i do have a crystal ball. unfortunately, it’s formed from ithaca ice and melts each year.

There are two game changers: one the supplier and one for the customer. For suppliers the evolution of cloud computing that supports hotel systems and applications for service delivery and management will change the role of chains and raise the level property level competency. business intelligence dashboards will drive distribu-tion action through more and more hotel systems. For customers, devices connecting them to hotel services and selected groups of others will be more fully integrated with one another and the supplier for marketing and service delivery. displays on all screens — table-top, hand-held and dash board will be fully integrated and linked with those of the others to whom you want to link.

Bill Carroll, Ph DCornell SChool oF hotel aDMiniStration

Senior lecturer

Industry PersPectIVe

dabble; don’t commit too soon.

Measure, measure and measure again the effects of distribution actions for yourself and with respect to you position among your competitors.

evaluate and act on distribution within the context of demand management.

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