ORLANDO, Florida — It’s never been more important for hoteliers to be on top of their overall distribution strategy and mindful of rates on the various channels they sell on, experts at the 2022 HSMAI Revenue Optimization Conference said.
Speaking during the “Distribution Strategies that Optimize Profit and Accelerate Recovery” panel, Andrew Rubinacci, executive vice president of commercial and revenue strategy for Aimbridge Hospitality, said discount channels no longer make sense because travelers will find those discounts regardless of what channel they appear on.
“The overarching theme is you can have the best marketing in the world, you can have the best brand, you can have the best of everything, but if it’s $30 cheaper somewhere, consumers are going to book it,” he said.
He recalled a conversation he had with a sales executive who believed their corporate negotiated business was down 5% at one point, only to discover that it was actually up 5% but those corporate travelers were instead booking at lower cost channels.
“You really have to understand what’s happening,” Rubinacci said.
He said a distribution strategy needs to come down to not just achieving the best possible rate, but how to get the most profit from each channel and defining key metrics to track success.
If that metric is simply achieving the highest revenue per available room in a market, he said hotels could just “do a deal with Booking.com at 90% commission and tell them they have to fill every room every night.”
“What we’re doing as professionals is we’re trying to optimize the entire asset with the most profitable revenue, and if you don’t understand distribution, where the rates are and where [guests] are coming from, you’re just not going to be able to do that,” Rubinacci said.
Karen Codilla, corporate director of revenue and distribution for Outrigger Hotels & Resorts, said the landscape for hotel distribution is growing more complicated as more companies enter the space looking to disrupt the legacy model.
She said it’s important for hotels to have updated property management systems and customer relationship management systems to interact with newer distribution platforms. This will be more key as hotels move into a more attribute-based pricing model similar to airlines and other industries, and distribution systems will be able to showcase what’s available for hotel guests to book.
“There is not an easy way for all of those details to integrate into our systems, and when it becomes difficult to do that, sometimes we run away and say, ‘We don’t have the resources,’” she said. “Other times we jump in.”
Mauri Berry, vice president of digital marketing for Remington Hotels, said succeeding in keeping distribution strategies up-to-date often comes down to internal strategies and how leaders use their teams’ time.
“It’s really about being committed and intentional about really having one comprehensive approach,” she said.
That also means finding ways to incentivize employees to optimize distribution.
“So, particularly for the junior and younger associates, you have to help them understand that their work does impact the bottom line, and that’s the ultimate success and performance,” she said.
Rubinacci agreed that building financial incentives tied to the bottom line is key.
“I actually eliminated the incentives for the leisure travel teams at the last two businesses I was in because what we incentivized them to do was actually harmful to the business,” he said. “We kept their compensation level but gave them different incentives so it wasn’t about just driving individual accounts.”