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Hotel Distribution Lecture

Milan, April 3, 2014
by

Michael Grohs

on 29 October 2014

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Transcript of Hotel Distribution Lecture

What is
Hotel Distribution?
Hotel?
HOTEL
Hotel?
HOTEL
Travel
Agency
Drawbacks:
Hotel?
Hotel?
HOTEL
Call
Center
Hotel?
Walk-in
GDS
Central Reservations Office
CRO
Hotel?
OTA
Online Travel Agent
HOTEL
WEB
OTA
Distribution
Channels
So what's the big deal?
Phone
Email
In a typical Supermarket there are
20,000 - 40,000
different items
How are
Hotels
managing available
Shelf Space?
Distribution Strategy
First Things First:
Cost of Distribution
Exercise:
Rank below distribution channels by profitability;
if a guest pays €100, how much does the hotel receive?*
Cost of Distribution
GDS
Walk-in
Phone
CRO
Email
WEB
OTA
Exercise:
Rank below distribution channels by profitability;
if a guest pays €100, how much does the hotel receive?*
GDS
Walk-in
Phone
CRO
Email
WEB
OTA
€100
€90
€97
€90
€88
€84
€79
*excl. marketing cost; depending on negotiation
*excl. marketing cost; depending on negotiation
GDS
Global Distribution System
Hotel?
HOTEL
Travel
Agency
for OTA & GDS commissions & transactions fees**
In 2010 alone US hotel industry paid over
$3.8 Billion
**Source: STR Global
GDS Screenshots
GDS - Reservation Flow
I'm R. Blair
Smith, IBM
I'm C.R. Smith, President of AA; have a look at our Reservations
... start of the Semi-Automatic Business Research Environment (SABRE) project in 1953
80-85% Business Travel
OTA
Online Travel Agency
Hotel?
HOTEL
Different OTA business models:
Retail
HOTEL
Hotel?
$100
15-25%
Commission
Merchant
HOTEL
Hotel?
$100
15-25%
Mark-up
$75-85
Opaque
HOTEL
Hotel?
$100
40%
Mark-up
$60
?
Flash Sales
HOTEL
Hotel?
20-30%
Commission
$12-18
$60
only tonight!
$15-25
OTA - Reservation Flow
Agenda
What is Hotel Distribution?
Distribution Channels
Cost of Distribution
Future of Hotel Distribution
Global Distrbution
Systems
GDS
OTA
WEB
Online Distribution Channels
Direct Hotel Website
Metasearch?
http://www.trivago.com
http://www.kayak.com
http://www.google.com/hotelfinder
Online Marketing
Hotel Shelf Space
Stand-alone, One-way vs Two-way
PMS interface
CRS
Where do I manage my distribution?
}
convert
Lookers
into
Bookers
Direct Hotel Website
http://www.hotelurban.com/#!en/home/
Online Travel Agency
Image
Loyalty
Best Rate
Guarantee
http://www.hotelmennini.com/
Booking
Engine
https://www.morganshotelgroup.com/originals/originals-morgans-new-york
http://shangri-la.com
Conversion
Push
Pull
vs.
Distribution Strategy
highest profitability
means managing your channels for
Technical Setup
HOTEL
PMS
Property Management System
OTA
Future of
Hotel Distribution
Group Exercise
How might Hotel Distribution look like in
2020?
Distribution Channel
PUZZLE
"Nothing is permanent
except
change
."

Heraclitus, Greek Philosopher 535-475 BC
Your
Vision
might be the next
Big Thing
http://www.google.com
Central Reservation System
small groups
complete the distribution puzzle in 15 min.
WEB
CRO
GDS
Package
Hotel?
HOTEL
40%
Mark-up
$60
$190
Package
$54
Full transcript