4 Hotel Distribution Challenges to Overcome

Being present on a variety of distribution channels—from OTAs to metasearch engines—is likely very important to you as a hotelier, as it increases the odds of prospective guests finding your hotel and booking a room with you.

However, as beneficial as this omnipresence can be, it’s not without its challenges.

That is why, in this article, we’re going to discuss some of the most common hotel distribution roadblocks and share tips on how you can overcome them with ease.

Managing Multiple Distribution Channels

One of the biggest challenges of being present on multiple hotel distribution channels is simply trying to manage them all at once.

On one hand, you don’t want to limit yourself to selling your rooms on one channel only, but on the other, juggling 10+ platforms can get extremely demanding and time-consuming.

Firstly, there’s the fact that each distribution channel has its own set of rules and requirements you need to follow in order to make your rooms available on it.

For instance, take a look at an excerpt of Booking.com’s General Delivery Terms.

Source: Booking.com

That is only a small portion of the terms and conditions you need to adhere to if you want to list your rooms on this platform.

Add several more platforms to that, each with its own compliance requirements, and things can quickly get very overwhelming.

However, the terms of use of various distribution channels aren’t the only ones you need to meet.

There are also the requirements and expectations of your prospective guests.

Once your hotel has piqued the interest of a potential guest, they’re probably going to browse different platforms in order to book a room with you at the most affordable price.

But the price isn’t the only thing they’ll be paying attention to.

They’ll also read through the room description, go over your policy, and swipe through the photos on each and every platform.

That is why you need to ensure that all the information and photos you put up are accurate, up-to-date, and consistent across all distribution channels.

Neglecting to do so can lead to confusion, distrust, and dissatisfaction among potential guests.

Just take a look at the example below.

Source: Tripadvisor

The discrepancy in photos across multiple booking platforms has left this prospective guest confused about what they can expect if they decide to book a room at this hotel.

This is not the kind of situation you want to find yourself in.

So, if you feel like you have to be present on multiple distribution channels, but you’re also struggling to manage them all, what can you do about it?

For starters, consider minimizing the number of distribution channels your hotel is present on.

We’re not saying you should put all your eggs in one basket, but rather carefully consider which platforms you genuinely need to be on.

What distribution channels are going to be relevant for your hotel depends on several factors, explains Adam Turner, founder of a consulting firm in the luxury hospitality industry.

Illustration: WebBookingPro / Quote: Click. Magazine

So instead of spreading yourself thin, consider focusing more of your efforts on generating leads through your website, i.e., direct bookings.

Why?

Because a considerable amount of people still prefer to book their rooms directly on the hotel website.

Plus, turning your hotel website into your strongest distribution channel is truly the definition of the phrase “everybody wins”:

  • You’re no longer paying high commission fees to various OTAs
  • You don’t have to manage your listings on a dozen different platforms
  • Your guests get a secure booking experience, (+ perks for booking directly)

Take a look at some of the benefits that Marriott offers to guests who choose to book a room on their website:

Source: Marriott

The bottom line is: If you’re trying to overcome the challenge of managing multiple distribution channels, you’re not alone.

It is a demanding task, but not an insurmountable one.

Instead of putting pressure on yourself to make your hotel present on every single distribution channel, take a step back and reevaluate where your hotel’s presence makes sense.

Only that way will you be able to make the most of each distribution channel and maintain a competitive edge.

Maintaining Consistent Pricing Across Channels

Apart from maintaining consistency across channels in terms of visuals and information about your rooms and amenities, you also need to maintain consistent pricing, or rate parity.

Illustration: WebBookingPro / Definition: Mews

Apart from the fact that some booking platforms will require you to give them the same rates for the same accommodation, your guests expect to see consistent pricing across the board, too.

Consistent pricing promotes trust and transparency, as it assures travelers that they’re getting the best possible deal, no matter what platform they choose to book a room on.

According to the EyeforTravel Traveler Loyalty Survey, 43.6% of travelers use price comparison websites every time they’re looking to book a hotel room.

Here’s an example of what such a comparison can look like:

Source: HotelHunter

Your potential guests will feel confused or suspicious if they compare your room prices across different booking platforms, and discover that they vary significantly.

They might worry that, if they book a room with you through a third-party platform at a substantially lower price, there must be some hidden fee they’ll have to pay upon arrival, or that some of the amenities will be excluded.

At that point, they’ll probably decide they’d rather be safe than sorry, and simply book a room at a hotel with consistent prices across all channels.

With that being said, achieving and maintaining rate parity can get pretty time-consuming, as it requires you to consistently monitor and adjust your prices across all distribution channels your hotel is present on.

The good news is that you can easily overcome this challenge by investing in a channel management system.

Source: WebBookingPro

This solution will allow you to centralize pricing management on all of your distribution channels—from metasearch engines to GDS and OTAs.

So whenever you decide to change your room rates for any reason, you won’t have to manually adjust them on every single platform.

The channel manager will automate this task by syncing room rates in real time and across all the channels you connect to it.

This is what such synced room rates look like in practice:

Source: Google Metasearch

For travelers, seeing the same price on all platforms instills a sense of trust and makes their booking experience more seamless.

As for you, using a channel manager means no room rate discrepancies, and you can also quickly adapt your pricing to the always-changing demand, thereby remaining competitive in the market.

So put that technology to use and ensure that both you and your prospective guests are getting the best deal.

High OTA Commission Costs

According to research conducted by Phocuswright, the online direct booking channel has experienced significant growth over the past several years, and is expected to further surpass OTAs.

Illustration: WebBookingPro / Data: Phocuswright

This increasing preference for direct bookings among travelers is good news for hoteliers, as one of the challenges they face in terms of distribution is the high cost of OTA commissions.

While OTAs are great for exposing your hotel to more travelers, and shouldn’t necessarily be completely discarded, there’s no denying that they have an adverse effect on hotel profitability.

According to Booking.com, an OTA giant, the commission percentage hotels pay depends on factors such as the country, property type, and location of the hotel, but the general consensus is that their commission usually ranges from 10% to 30% of the booking value.

Add to that the fact that 55% of hotels using OTAs feel pressured to accept conditions that they otherwise wouldn’t, and it becomes clear that relying too much on this third-party channel has a good amount of drawbacks.

And sure, you can try to negotiate better terms with OTAs, but at the end of the day, your hotel’s profitability is still going to suffer.

To make matters worse, room bookings made through OTAs can also backfire on your reputation. Sarah Martinez, general manager of the Murrieta Hot Springs Resortexplains why.

“Once a guest books a room through a third party, the hotel cannot make changes to the reservation and the guest has to deal with the third party directly. It created a middleman which can lead to frustration because it may appear the hotel is not helpful.”

To put it simply, in the event of unforeseen circumstances on the guests’ part, your hands are pretty much tied.

On a traveler's end, however, your inability to make adjustments might be interpreted as unwillingness to help.

This can then lead to them leaving a negative review, deterring other prospective guests from booking a room with you in the future, and further harming your revenue.

This is all the more reason for you to consider reducing your reliance on OTAs and directing those resources toward improving your direct booking process instead.

If you’re not sure where to start, consider investing in a web booking engine, such as our own WebBookingPro.

Using WebBookingPro will allow you to regain complete control over your bookings and eliminate dependency on OTAs charging costly commissions.

Take a look at what our direct booking engine looks like in action:

Source: Hotel Slavija

As you can see, WebBookingPro completely integrates into your hotel website, allowing you to maintain your brand identity and making it possible for your guests to book a room without being redirected to other domains.

In an age where reservation scams are coming at your guests left and right, being able to make a reservation securely and directly with the hotel is invaluable.

As far as the technical side of things goes, connecting WebBookingPro with your website takes no more than a minute.

The straightforward nature of the integration process, but also of the software itself, means that you can start increasing your direct online bookings—and your profit margins—pretty much immediately.

And if you’re wondering how you can incentivize prospective guests to book a room directly instead of through your OTA listing, you can take a page out of The Bristol Hotel's book.

Source: The Bristol Hotel San Diego

As you can see, they offer various perks for guests who opt for direct booking, and they’re very transparent about it.

Even if you offer a single perk, such as complimentary transportation from the airport to your hotel, your guests will feel like they’re getting more value for their money, and you will actually be making more money.

In our book, that’s a win-win situation.

Accurate Inventory Management

The last distribution challenge on our list is the one that can perhaps cause the most trouble if not handled properly: accurate inventory management.

Inventory management is all about making sure that your hotel doesn’t end up having more room bookings than available rooms.

The concept itself is simple, but the execution can be challenging when your hotel is selling rooms on multiple distribution channels.

Situations like the ones in the example below are a testament to that.

Source: Booking.com

Without a handle on inventory management, oversights that lead to double bookings are a common occurrence that’s very inconvenient—both for your guests and for your hotel.

Whether they’re booking a room with you for business or leisure, the last thing your guests want is to find out that their accommodation arrangements are non-existent due to a mistake on your part.

When this sort of thing happens, reviews like the one below are bound to affect your hotel’s reputation.

Source: Expedia

And even if you fix the mistake and provide good customer service, chances are that future travelers will be discouraged from booking a room with you for fear that the same thing might happen to them.

So, what can you do to prevent overbookings?

The answer is simple: invest in a central reservation system (CRS) to help you manage all of your reservations-related processes.

Illustration: WebBookingPro / Data: AltexSoft

In conjunction with your channel manager, a CRS is going to help you consolidate and manage reservations from all of your distribution channels at once.

That way you’ll never have to worry about finding yourself in an uncomfortable situation where you have to find alternative accommodation for a guest you accidentally overbooked.

Source: WebBookingPro

With the help of a solution like this, you’ll have a holistic view of your bookings and availability, which minimizes the risk of inventory management mistakes that can be harmful both to your guests and your business.

Conclusion

While hotel distribution has its challenges, it is an integral part of your hotel operations.

That is why it’s important for you to proactively take the steps to overcome them or, ideally, avoid them altogether.

Good hotel distribution starts with discovering which distribution channel mix is the right fit for your hotel, and then making sure that you’re maintaining consistent pricing and accurate room availability across all of your platforms.

Lastly, consider investing more effort and resources into optimizing your direct booking processes.

Making direct website reservations your strongest distribution channel has the power to remedy many of the challenges that come with heavily relying on third-party channels, so it’s definitely an option worth exploring.

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