Dear WuBookers, the hotel distribution strategy is a fundamental part of the process of converting travelers into actual guests. Both newly opened hotels and established properties must constantly manage their offline and, above all, online visibility, and thus identify the best sales channels. Let’s take a look at the main ones and how to build a functional and profitable mix.

What Is Hotel Distribution?

Hotel distribution pertains to hotels and properties in general and encompasses various reservation tools. Note: we’re not talking about marketing activities focused on promotion, such as social media advertising and, more recently, advertising on ChatGPT. Distributing hotel rooms or B&B accommodations means making them available for purchase across multiple platforms and through various methods. How? By strategically managing the main sales channels.

What are the main distribution channels for rooms

In some ways, the front desk is also a sales channel: so-called “walk-in guests”, phone calls to the property, and email requests are reservation methods that are still in use today. It’s equally true, however, that these cases are rarer than online reservations, which are significantly more common. These can be made through:

• online travel agencies (OTAs): third-party websites that showcase hotels and properties to thousands of travelers in exchange for a percentage, sometimes quite high, of the reservations received. Among the most well-known OTAs are, for example, Booking.com, Expedia, and Airbnb, but there are many others depending on the country and the specific type of property;
• metasearch channels: unlike OTAs, which handle sales directly on their own portals, metasearch engines such as Google, TripAdvisor, and Trivago display a list of sites where the hotel is listed, including OTAs and the property’s official website;
• the property’s website: the website is another essential distribution channel, partly because, unlike almost all others, it involves no intermediary fees. Sales made through the internal reservation system (booking engine, in industry jargon) are therefore direct;
• GDS (Global Distribution System): systems that access large global databases and aggregate hotels, airlines, and car rental companies in an organized manner, making it easy to search and book automatically. They are typically used by travel agencies or companies for business travel;
• Artificial Intelligence systems: interfaces such as ChatGPT and similar tools can also become an interesting intermediary, especially now that there is growing discussion about integrating travel apps into dialog windows. In this case, therefore, it would involve a mechanism similar to that of metasearch engines but within AI environments. For now, the pilot program involves only a few partners (Booking.com and Expedia) and is active outside the EU, but OpenAI seems intent on moving forward.

This, then, is a general overview of hotel distribution channels, and it doesn’t necessarily mean that a property must invest in all of them. However, it is certainly important to evaluate them carefully to ensure an adequate flow of reservations throughout the year.

Why Invest in Multiple Sales Channels?

At this point, it’s legitimate to ask why one should invest in multiple sales channels. If the hotel’s website is already integrated with a booking engine (and perhaps you’re already paying for online advertising), what’s the point of a multichannel distribution strategy? The answer is simple: to get (more) reservations. In fact, it’s very difficult for a property, especially one that’s “new” to the market, to have enough name recognition to fill its room availability on its own, relying solely on user searches on Google.

OTAs and metasearch engines are an important platform for hotels and B&Bs, which, thanks to these channels, are able to quickly reach a very broad audience from different countries. Seasonal smoothing is another factor to consider, as international customers may travel at different times, thus ensuring occupancy even during low season. Furthermore, some established channels are highly valued for their reliability and offer significant protections for both the public and suppliers, making them safe and preferred options for many.

It is also not uncommon for online agencies and search portals to be used solely for research purposes, and for people to contact the properties directly to book rooms once they have identified options of interest. Therefore, having a presence on these platforms can even lead to, somewhat paradoxically and counterintuitively, direct reservations.

Finally, specific tools (such as GDS systems) and specialized OTAs make it possible to reach very specific target audiences who, otherwise, would struggle to find the hotel through a simple online search.

In general, then, the reasons in favor of hotel distribution are: reservation volume and frequency, and widespread availability.
Of course, all of this must be part of a well-thought-out strategy because, as we’ve mentioned, not all channels are free, and it is therefore essential to create a sustainable and effective mix.

How to Create a Sustainable and Effective Mix

The bad news is thatthere is no one-size-fits-all magic formula, nor is there a guaranteed winning percentage for how much to invest in each channel. The good news is that there are still some best practices to follow to reduce the risk of error and find the best strategy for each property.

Know Your Audience

The first step in understanding where and how to invest is to know your audience, or, at the very least, consider the different types of audiences that might be interested in your property. A boutique hotel, for example, is unlikely to attract large groups, families, or business travelers, but it might appeal to young or mature couples with a certain level of spending power. In this case, it doesn’t make much sense to focus on GDS portals, but there may be OTAs or other vertical distribution channels worth exploring.

If the audience is mixed or it’s difficult to identify a dominant segment, it’s best to start by activating a select group of channels, chosen based on factors such as popularity and cost, without going overboard, and determine which one is most effective, even by asking guests directly how they found out about the property.

Track, monitor, and analyze everything

Beyond the customer survey, it’s essential to track and analyze every reservation. Tracing the source channels and determining the hotel’s net profit (after deducting any commission fees) allows you to truly assess the relevance and cost-effectiveness of certain tools.

It may become apparent, for example, that some OTAs generate fewer reservations than others, or that the type of traveler attracted through a particular channel isn’t particularly inclined to spend, meaning their stay yields little in terms of revenue. This analysis helps you understand which channels are truly worth investing in and how to balance them within your distribution mix.

Consider the Big Picture

Having a presence on a particular channel does not immediately translate into reservations, even if that channel is visited by a large number of travelers every day. The effectiveness of a distribution strategy is determined not only by where you appear, but also by how. This applies to the images, videos, and description of the property, which must be well-crafted, complete, and consistent; and to guest reviews: many negative reviews will discourage future reservations. But it also applies to pricing, that is, the pricing strategy. It’s clear that pricing your property too high compared to others in the same category risks driving travelers away, while pricing it too low may raise suspicion or attract customers with limited budgets. If you want to encourage direct reservations (which are less expensive because they don’t involve commission fees), you need to plan rates and related perks in a targeted and measured way to avoid giving the wrong impression or sending mixed signals to AI systems.

Stay Aware of New Developments

Tourism is a constantly evolving industry, and ignoring new developments risks being counterproductive, even if you’ve already achieved a good balance. In fact, there may be new channels to monitor or strategies to implement to improve performance even further, or opportunities to evaluate based on current market conditions and demand trends. That’s why it’s extremely important not to rest on your laurels but instead to remain attentive and receptive to what’s happening around you. An excellent way to stay up to date is to attend hospitality trade shows, where industry professionals from around the world gather to share solutions and trends. Capitalizing on some of these trends ahead of the competition could provide a significant competitive advantage.

Technology to Support Your Business

Distribution requires a lot of work. In addition to the preliminary stages, where you need to research to understand how the various platforms work and their costs, there’s the core of the actual work: providing content, updating the calendar, receiving and processing reservations, setting and coordinating prices and packages, responding to messages, and so on, a long list of tasks.

To manage all of this effectively, technology is essential. What kind of technology? The PMS, first and foremost.

With Zak, WuBook’s management software for hotels and properties, you can:

• activate and manage your presence on OTAs and third-party sales channels, including GDSs, through the connected and easy-to-use Channel Manager;
• manage prices and availability across all sales channels in real time, thereby minimizing the risk of discrepancies across different platforms;
• secure direct reservations from your website and metasearch engines thanks to the integrated Booking Engine;
• track every reservation and analyze your property’s performance through accurate, up-to-date reports and statistics;
• make your property’s information accessible to AI systems, which can then read it and incorporate it into conversations with users;
• connect third-party software via API to access existing data and perform specific actions (a very useful feature for connecting, for example, advanced billing or online check-in software).

All on a single platform, designed specifically to meet the needs of owners and managers who want to simplify, speed up, and optimize their work.

One final tip

Although there’s no one-size-fits-all approach, it’s always best to have a diverse mix of sales channels to maximize your visibility and reach your target market in the most profitable way possible.

A good distribution strategy usually includes these sales channels:

• booking engine, to receive reservations directly from your website. On the website, it’s best to list the most affordable rate for guests, possibly with the addition of exclusive benefits to encourage bookings through this channel;
• metasearch engines, which encourage direct reservations;
• generalist OTAs, to gain visibility and a high volume of traffic. The recommendation is to set higher selling prices on these platforms to cover the cost of the commissions charged;
• niche OTAs, selected based on the property’s characteristics, to reach specific target markets.

Hotel distribution is a delicate process that must be evaluated on a case-by-case basis and adjusted periodically, with the help of the right management software.