Demystifying Distribution 2.0

specific niche markets, this process is likely to become more refined and narrow to a shorter list of specialized sites used by each consumer sector. And the types of consumers will become far more fragmented than the aggregated categories of leisure, group and corporate. A massive change since the early part of the decade is the increased use of online websites to support the shopping (pre-travel) and posttravel part of the hotel booking process. With the expanded technology available, a travel marketer can interact with consumers at every “touchpoint” in the purchase process. Whether this occurs on a website designed for meeting planners, or one for leisure travelers, interaction at each step along the way is central to the new marketing model. The benefits of a higher level of involvement with each type of consumer will fuel the need to develop customer engagement plans. This, along with the proliferation of websites and greater control by the consumer over the brands they use, move the distribution networks from a context of booking to one in which media, marketing and engagement share equal weight. A distribution strategy should be designed to support an organization’s marketing (i.e., revenue and communications) objectives. There are three primary questions that drive a distribution strategy: 1. What mix of business is available at any given time? 2. How much will it cost you to get it? 3. What is the long term value for each type of business? While hotels need a presence in many channels and need to allow consumers to choose the channel they prefer, they want to develop a plan that will: • stimulate business to preferred channels whenever possible using promotional portals, search engines and the hundreds of other lead generators to drive direct business as much as possible to their own website(s) • optimize channel mix on a daily basis (which requires demand forecasting by channel) • provide a sustainable revenue stream over time with high retention levels In a transition from legacy systems and processes, the hospitality industry is moving to a point where this rapidly changing distribution landscape will be managed with an “intelligence engine” that supports insightful planning and agile execution. The spotlight in this complex environment is to build processes and systems on touchpoints and customer segments, rather than on brands or functional disciplines. A knowledgeable hotel ownership and management team can more effectively position itself to control its own destiny in these times of high opportunity, teeming competition and equally high risk. PUBLISHED BY THE HSMAI FOUNDATION 19

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