You’ve surely heard before that the big brand investment in direct booking campaigns trickles down to independents (by way of travelers being more aware of the value of booking directly). Hotel brands have poured billions of dollars into direct booking campaigns, and a report by Hitwise in May of this year shows that for some of the major players, direct bookings are looking up. For everyone else, not so much. OTAs still achieved an almost 3% gain in market share, while hotels lost 3.87% (Skift). So while ad campaigns may have paid off for the Wyndhams and Hiltons of the world, when it comes to smaller brands and independents, the battle for direct bookings is still raging.
For independent hotels, the option to throw massive amounts of money at traditional advertising isn’t usually an option. Nor, for a number of reasons, is threatening not to renew an agreement with an OTA, as Hyatt did over the summer. Independents must be savvy in a different way. They must calculate, invest in understanding first, before tailoring a specific distribution strategy going into 2018. Analysis then action.
Data Leading To Successful Distribution
I always imagine the corporate office of a big brand full of screens with dashboards flashing alerts and website stats and occupancy. It’s really far less sexy than this, but what they do have is the ability to see their performance stats with lightning speed. In order to compete, independents need the same access to the big picture—and it’s not Google Analytics. Hotel technology must show all the moving pieces together, integrated from your PMS, STR, OTAs, review sites, website, and social media can offer a visualization of just how the different parts are affecting the whole. But even that is not enough. Hotels need to be able to integrate alerts, track their OTA spend, pull reports on the fly, and more. When you have access to these things, then you can visualize what you need in terms of a distribution strategy. Here are some the things an independent hotel must know:
Turning Analysis Into Action
Distribution is a living, breathing creature that requires food, water, and air. (We wish it required sleep, too.) So often hotels look at the analytics, take note of some trends, and then fall flat with action. This is sometimes about accountability and sometimes lack of clarity about what to do. But, as Web in Travel notes, “Channel optimisation is not a ‘set it and forget it’ proposition. Hoteliers must consistently monitor and evaluate their channel strategy to more efficiently acquire traffic, then convert that traffic into profitable transactions.” We’d take this a step further to say that hotels much monitor, evaluate, and then take very specific action to convert that traffic. And, yet, what independent hotel has the resources to avoid a set-and-forget attitude? Very few, indeed.
Integrating tools to support action is essential for independents to change their distribution strategy. For instance, Snapshot’s Analytics Pro allows properties to pull custom reports and set alerts based on PMS data. Alerts can be set for anything: if occupancy gets too low, when RevPAR reaches a certain point, poor pickup, high revenue, and so forth. It will also send an email every morning with all the updates needed for the daily briefing. This level of alert system allows independent properties to stay nimble without constantly poring over the data. To identify a problem with, say, occupancy and make the changes necessary to get performance back where it should be.
Pair this with an OTA commission tracker (also conveniently available in Analytics Pro), which shows net revenue and net ADR from various OTAs, and you have a much better grasp on what the impact of solving your problem via an OTA is. This may be the thing that keeps a property from trying to increase occupancy by releasing more inventory to an OTA. Perhaps instead, you discover that the whole market is down, and you adjust your rates to look more attractive for two weeks before even considering pushing extra inventory to an OTA.
What independent hotels have going for them is that travelers want to come; they are the plat du jour. Guests care far less right now about big brands and far more about having an interesting experience. But in order to capitalize on travelers’ devotion, independents must be quick to understand and even quicker to act in order to capture bookings and stay profitable. A straight line is always the quickest route, and so connecting the dots between analysis and action with the right dashboards and apps that support smart distribution will help independents stay on the right path.