Website, GDS and OTA: the right mix in distribution channel investments - Insights - 0 views
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Here is a summary of the trends in three online distribution channels used in the hospitality industry: websites, Global Distribution Systems (GDS), and online travel agents (OTAs).
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The Internet has made marketing more measurable and accountable with different metrics and analytics that show the contribution of marketing to the bottom line. The most critical measures of marketing are the customer acquisition cost (CAC) and the customer lifetime value (CLV), which at times can be difficult to understand and quantify.
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The CAC is the price a hotel pays to acquire a new customer, which can have a significant impact on RevPAR performance and asset value growth. The CLV is a prediction of the value a business will derive from its entire relationship with a customer.
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f managed skillfully, the hotel’s website could yield the lowest CAC and the highest CLV as it permits the hotel to have a direct interaction with the customer which could lead to a long-term relationship.
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The hotel website is the most critical marketing tool because it can deliver a message that is both relevant and appealing to the target customer.
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A responsive web design provides an optimal viewing experience by adapting the website to mobile phones, desktop computers, and tablets. A responsive design is an advantage because a wide range of devices are used to make hotel reservations.
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This could be a significant advantage for a hotel considering that mobile bookings have increased by 42% in the last two years, accounting for 25% of total bookings made in the Americas, as reported by TravelClick.
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hotel website that contains relevant, unique, engaging, and accurate information will be able to dominate SEO.
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Online Travel AgentsThis channel has the highest cost for hotels given the bidding process and the commission structure in place, typically amounting to 15% to 30% of revenues generated.
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Most OTAs feature a pay-per-click sponsor listing through a bidding process that typically ranges from $0.25 to $2.00 per click, depending on the market.
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Each OTA uses a slightly different algorithm to position and rank hotels in the results screen. Regardless of the OTA used, hoteliers should implement the following techniques to position their hotel with the highest possible ranking:
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The more information we know about customers, the more we will understand how to attract them to hotel properties. Hoteliers need to understand the electronic distribution environment and develop a comprehensive pricing strategy to maximize revenue and profit. Maximizing profitability can only be possible by extracting intelligence on the day-by-day activity of these channels and analyzing the possible displacements.
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It is important for hotels to ease the booking process for travel agents by including the right type of information and rates in the GDS, and by keeping hotel information current, including all attractions and points of interest that attract guests.
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Measuring the distribution channelsDemand360 is a market intelligence tool from TravelClick that provides exclusive information and in-depth reports on projected future demand for a hotel’s specific competitive set.
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GDS provide pricing, availability, and reservation functionality to a world-wide market of consortia, who can book airline, car, hotel, and other travel arrangements for their customers.
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Here is a summary of the trends in three online distribution channels used in the hospitality industry: websites, Global Distribution Systems (GDS), and online travel agents (OTAs).
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The most critical measures of marketing are the customer acquisition cost (CAC) and the customer lifetime value (CLV), which at times can be difficult to understand and quantify.
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OTAs can boost occupancy in need periods and help diversify a hotel’s client base by introducing guests that otherwise might not have considered staying at that particular hotel
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the GDS connects hotels with consortia, which are global associations of travel agents that provide hotels primarily with major sources of corporate business.
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A vanity domain name with an independent website that reflects the hotel’s unique personality can be an advantage for a branded hotel operator to include relevant information about their particular submarket and the property.
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The advantage of this distribution channel is marketing exposure. If a hotel is incapable of filling certain days using other channels, even higher-cost OTAs would be considered a benefit.
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GDS provide pricing, availability, and reservation functionality to a world-wide market of consortia, who can book airline, car, hotel, and other travel arrangements for their customers.
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It is important for hotels to ease the booking process for travel agents by including the right type of information and rates in the GDS, and by keeping hotel information current, including all attractions and points of interest that attract guests.
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The GDS distribution channel remains an important part of the industry, and it can have a significant impact on the amount of commercial demand captured.
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Data mining will help managers understand how many room nights are being booked and the typical season and day of the booking, which will in turn help them recognize how to maximize profit from these accounts and avoid displacing higher-rated demand.
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GDS channel advertising opportunities are also available to increase the exposure of the hotel on the GDS
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Hotels rely on the information that is accessed through different intermediary systems that give each property information on their customers, as well as insight on their comp set. OTAs play a key role in assisting properties generate revenue, they have different processes in place such as pay per clicks or commissions involved when bookings are made through their websites. Marketing plays a key role in both OTAs and a properties direct website. Websites must be user friendly, easily accessible and have the ability to function on a mobile device. Majority of bookings are made online and and increasing amount are being made through a mobile device. Ensuring that each of these platforms creates a welcoming environment for each potential guest maximizes the chances of them booking.
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An effective marketing strategy starts with knowing your customers and your goals. it is important to understand how to attract online shoppers, increase conversion rates, and have data mining tools to understand the customer's preferences and booking patterns to be able to develop a long-lasting relationship.OTAs and GDS remain an essential part of the industry, as they provide marketing exposure to a wider range of market segments.