For those in the hospitality industry, a key part of any revenue management strategy revolves around distribution channel management. After all, while direct bookings are usually preferable, maximizing bookings and revenue requires assistance from third-party distribution agents. In this article, you will find extensive information regarding distribution channel management in the hotel industry and the role a distribution channel manager can play.

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What Is Distribution Channel Management?

Within the hotel industry, a distribution channel refers to a chain of intermediaries that a hotel room or service passes through before reaching the customer. These chains can be short, such as a direct sale from the hotel to the customer or longer, passing through wholesalers, online travel agents, retail travel agents, or information centers.

Therefore, distribution channel management is the practice of managing each distribution channel. This can involve managing your rates and booking restrictions, ensuring your hotel’s inventory is continually updated across all channels and various additional tasks.

An effective hotel channel management strategy is imperative for maintaining the partnerships and business relationships necessary to optimize sales and maximize revenue.

What Is a Hotel Distribution Channel Manager?

A hotel distribution channel manager is an online management solution that allows you to centralize all your distribution channels and manage operations connected to them, all from the same place. These solutions can be cloud-based or software-based, and real-time management operations can be performed.

A distribution channel manager allows all parties involved in the distribution of hotel rooms or other hotel services to gain live access to key information, such as rates and availability. According to the Hotel Channel Management Market Report by Future Market Insights, the global hotel channel management market is projected to grow to $1,618.23 million by 2033.

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What Are the Advantages of a Distribution Channel Manager?

Below, you find a list of some of the most significant advantages of using a distribution channel manager.

1. Faster Distribution Channel Management

One primary advantage of using a distribution channel manager is the ability to speed up the processes associated with managing channels. For instance, you will no longer need to log in to the system of each online travel agent or distribution partner to make adjustments; you can make them in one place.

Repetitive tasks can also be automated, saving substantial time on general administration.

2. Fewer Booking Mistakes

Another major advantage for those in the hospitality industry is the improved accuracy offered by distribution channel managers. For example, enhanced transparency and up-to-date availability can solve human error issues, such as over-booking your hotel or property.

Mistakes can often be costly in terms of time, money, and potentially even business partnerships, so eradicating these is a key channel management priority and can be enormously beneficial.

3. Availability of Data and Key Metrics

Aside from the purely functional aspects of distribution channel managers, these solutions also offer the added bonus of providing key data and metrics in a single place. This can be of great strategic benefit, allowing hotel owners and other business leaders to identify notable trends or patterns.

From there, it becomes easier to make key strategic decisions that are supported by evidence or data.

Hotel Distribution Channel Manager - Availability of Data and Key Metrics

4. Facilitate Direct Hotel Bookings

Most distribution channel manager platforms also include a built-in booking engine or the ability to connect with your booking engine, allowing customers to make direct bookings.

This can be of great value for revenue management purposes because direct bookings are the most simple distribution channel and do not require the hotel or resort to pay commission fees to a third-party distributor. According to the Digital Hotel Operations Study Report by h2c, one-third of hotel bookings are made via direct channels.

5. Improve Revenue and Business Performance

Finally, using a distribution channel manager can help improve revenue and business performance in several ways. For example, the platform will enable a more dynamic approach to room rates, allowing adjustments to be made quickly, at the moment, across all channels in the system.

Additionally, distribution channel managers can make it easier to add new distribution partners and improve overall hotel visibility, potentially increasing demand, occupancy rates, and the amount that can be charged.

Strategies to Overcome Hotel Distribution Channel Manager Challenges

Navigating the complex landscape of channel distribution management presents several challenges for hoteliers. This table highlights key challenges in hotel channel distribution management and offers strategic solutions and best practices. It aims to help hoteliers optimize their distribution strategies, improve operational efficiency, and drive revenue growth while maintaining brand integrity and enhancing the guest experience.

Challenge Common Issues Proposed Solutions or Best Practices
Maintaining Rate Parity Discrepancies in room rates across different distribution channels. Implement automated rate parity tools; regularly monitor channels for discrepancies.
Managing Inventory Across Channels Overbooking or underutilization due to unsynchronized inventory updates. Use a centralized channel manager to ensure real-time inventory updates across all platforms.
Complexity in Channel Management Difficulty managing multiple channels and their specific requirements. Simplify operations with integrated distribution management systems that offer a unified dashboard.
Cost Control High commission fees and operational costs associated with channel use. Regularly review channel performance and costs; negotiate better rates or prioritize lower-cost channels.
Adapting to Market Changes Rapid changes in travel demand and channel popularity. Stay informed with market trends; adopt a flexible channel strategy that can be adjusted as needed.
Ensuring Consistent Brand Messaging Varied representation of the hotel brand across channels. Establish clear brand guidelines; regularly audit channel content for consistency with the brand message.
Data Security and Privacy Risks associated with handling customer data across multiple channels. Implement robust security protocols; ensure all channel partners comply with data protection regulations.
Customer Experience Consistency Providing a uniform booking experience across all channels. Monitor and enhance the customer journey on each channel to ensure consistency and quality.

List of Online Travel Agents (OTAs) to Increase Your Hotel Bookings

The role of online travel agents, or OTA for short, has become increasingly significant within the hotel sector because they provide a convenient way for customers to compare hotels and book them online. In the article “Online Travel Agents (OTAs) to Increase Your Hotel Bookings,” you will learn more about OTAs and the best platforms to turn to to grow the number of hotel bookings.

Hotel Distribution Channel Manager FAQs

A channel management solution in a hotel helps to consolidate and synchronize booking information and inventory data across multiple distribution channels, including online travel agencies (OTAs), global distribution systems (GDS) and direct bookings. This makes it easier to manage room rates, while preventing overbooking and associated refunds.

Distribution refers to making rooms available for bookings across different channels, including your own hotel website, online travel agencies and traditional travel agencies. Distribution aims to maximize bookings by making it easy for customers to find and book hotel rooms.

For most hotels, online travel agencies are the most popular distribution channel. This includes platforms like Expedia and Booking.com. OTAs have a wide reach and are easy for customers to use, but charge commission fees to hotels.

Examples of indirect hotel distribution channels include OTAs, conventional travel agencies, global distribution systems and third-party booking websites. They are channels that are external to your hotel and will often charge commission fees in exchange for the extra visibility. However, they help hotels to reach a wider audience and sell more rooms.

Hotel inventory management is the process of overseeing and controlling both the availability and price of rooms, to optimize occupancy rates and room revenue. It also involves managing the different distribution channels, including keeping information up-to-date and accurate across those channels.

Distribution channel management is an important concept within the hotel industry; using a distribution channel manager can improve associated processes. As a result, management can be made faster and more accurate, more dynamic pricing strategies can be adopted, visibility can be enhanced, and revenue can be increased.

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This article is written by:

Martijn Barten

Hi, I am Martijn Barten, founder of Revfine.com. With 20 years of experience in the hospitality industry, I specialize in optimizing revenue by combining revenue management with marketing strategies. I have successfully developed, implemented, and managed revenue management and marketing strategies for individual properties and multi-property portfolios.