Electronic Channel Distribution
Hotel Inventory
Pearl Brewer, Ph.D.
University of Nevada, Las Vegas
Channel Distribution Terms
• Merchant Model
– Intermediaries negotiates rooms at net rates with suppliers
and then sells them at a marked-up price.
• Opaque Site
– Brand opaque
• Hotwire.com
– Price opaque
• Friendlyplanet.com
– Auctions or Name your own Price
• Priceline.com
Distribution Channels
• The Hotels Website
• Chain Website
• CRS links to travel
agent websites or
travel agents
• Auctions or other
opaque sites
• Airline sites
• Online
intermediaries
– Affiliates
• Tour Operators
• Brokers
Distribution Channels Handout
Issues for Hotels –
A Study Of Hotel Operators
Corp
Restriction
Technology
3%
3%
Data
2%
Cost
Focuses
8%
Control
37%
customer
10%
Mgt ability
14%
Profitability
22%
Control Issues
• Ability to control inventory
– manipulating black out dates and allotments
– inability to close out inventory
– manipulating availability
• Ability to control Rates
– maintaining rate parity
– not able to change rates as needed
• Power in the negotiation of Contracts with
large companies (Expedia, Travelocity etc.)
• Control property descriptions across the web.
Profitability Issues
•
•
•
•
•
Revenue
Yield
Reduction in Margins due to discounting
Collecting Payment
Transactions costs
Ability to Manage Channels
• Time
• Knowledge of the channels
– Ease of use of each channel from the management
perspective
– Data received from channels
• Skills needed to manage channels
– Who should be responsible
Customer-centric Issues
• Visibility of sites to the target audience
– Do they reach the intended market?
• Market positioning
– visual ranking of the channel on the user’s search engine display
• Purchase of keywords
• Purchase Sponsored links
• Usefulness of the sites
– Ease of use for the customer
– Availability of information
• Image of the channel in the mind of the customers
Corporate Restriction, Technology,
and Data Issues
• Chains and Corporation may place restrictions
on their individual properties
• Technology to control channel management is
either not known or understood by
management
• Data collection an use in minimal and difficult
Channel Management Strategies
Most Hotels did not have an official strategy
Those strategies in use:
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
Rate
11.48%
Yield Mgt.
8.13%
Search engine
7.18%
Selective
participation
6.70%
Channel Management Strategies
• Best rate guarantee
– Rate parity is a pricing strategy
• Yield management strategies including regular
yield meetings, to maximize revenue by
establishing rates and availability or driving rates
over high occupancy dates.
• Search engine strategy
• Selective channel participation
Still a “hot” topic for Hoteliers