Understanding where business is coming from and how much it costs is key in making the most out of revenue management, marketing and distribution.
LONDON—With the world of distribution changing rapidly, revenue managers must reassess their approach.
Adaptation is the name of the game.
Speaking at a panel titled “Debating distribution” at the recent Hotel Distribution Event, Osama Hirzalla, VP of sales and distribution, Europe at Marriott International, said one large change concerns bodies on the ground.
“We have a dedicated distribution team in Europe looking at relationships, and we’ve added a team for connectivity,” Hirzalla said.
He added additional changes have included more investment in revenue-management systems, more education aimed on understanding demand and pricing and a focus on yielding each channel.
Vineeth Purushothaman, digital and distribution projects, Europe, Middle East and Africa at Wyndham Hotels & Resorts, said the discipline is growing globally.
“(We have a) distribution team in the U.S., that is where we’re from, but when I joined we did not have one in Europe, and it has had to expand as its specific needs were not always considered from the U.S. Today, the world is a flatter place,” he said.
Suzie Thompson, VP of marketing, distribution and revenue management, Red Carnation Hotels, said her firm is London-centric, apart from four properties in Africa, but has a parent company, The Travel Corporation, from South Africa.
“The biggest change is cultural, in that everything must be considered on a business basis and everyone has a part to play. We do not just consider where the booking was placed. Nothing is siloed. A lot of businesses are moving that way, but it is difficult,” she said.
Purushothaman said in terms of working with aggregator meta-search companies, it has to be a partnership and there must be understanding where things overlap.
“The vitally important aspect of meta is the integration of our rates,” he said.
Hirzalla said revenue management lies within sales, while metasearch sits within distribution and research remains the responsibility of everyone.
“Marketing is seen as a cost of acquisition, and you cannot stop that. When you do, you lose visibility and share,” he said.
Thompson said when any channel is analyzed, it has to be done so from the guests’ points of view, and Hirzalla said marketing has had to become a dedicated, core discipline, regardless if that marketing is brand- or digital-led.
Cost per channel
Marketing, whatever form it takes, is not cheap, especially if acquisition costs are seen as directly correlated to average daily rate, panelists said.
Spreading acquisition costs would at least have the effect of making sales channels shine in a better light.
“You can get completely bogged down and not do any marketing, but there are tools to understand the booking journey and touchpoints,” Thompson said.
“The process is about learning about yourself and the guest, having more confidence in your ADR and giving credit where credit is due throughout the process,” she said.
Understanding acquisition costs helps better understand the value of different channels and how much you can afford spending on them, Hirzalla said.
“We obviously look at channel costs, but we also look at channel profitability, which helps with negotiations with channels later down the line,” he said.
Thompson said her parent company’s larger clout also can be turned on and is a wonderful support.
“(It) said we’d love to support your businesses by showcasing them to our guests, which I think is a nice thing to do and see more of, rather than us going it alone, which is too expensive,” Thompson added.
Purushothaman said he thought the future would be one in which individual properties are allowed to top up on marketing when it is needed.
Thompson said her company has long been at the top of best-in-class scores on aggregator websites such as TripAdvistor, but that also remains a struggle.
“In the era of mobile we are fighting harder for a small space,” she said.