NEW YORK—When analyzing one distribution nnel over another, be cautious not to paint with too broad of a brush. There are many factors that go into periodic rising or falling demand from a certain channel, said Tim Hart, executive VP of TravelClick.
Hart, during a break at the NYU International Hospitality Industry Investment Conference, discussed TravelClick’s take on distribution channel management and how hoteliers should optimize their mix.
“I’m a believer in the various channels performing their various functions. It’s always customer-segment specific,” Hart said. “Some of the channel noise is sometimes misplaced because it’s all so segment-specific, type-of-customer specific. If one customer segment is up and another is down, we make conclusions about the channel itself when it’s really just all about the guest they serve, the customer they serve and how they prefer to book.”
For example, the global distribution systems channel took a nose dive a couple years back, and many experts in the industry were predicting its demise. Hart said the downturn had a lot to do with decreasing demand driven from the GDSs. However, the channel appears to be rebounding.
“When the GDSs were dying and rumors of their death were bounding, it was during a downturn when the business traveler had gone away. They were probably hit harder than anybody since they really cater to the business traveler,” he said. “Because the business traveler has been resurgent ever since, they’ve been strong as well.”
Hart said he doesn’t buy into the debate about good and bad channels. Of the five channels TravelClick tracks—brand.com, voice, property direct, GDS and online travel agenciess—Hart said they all play a role in bringing guests to hotels.
“It really comes down to which ones are more important to each segment you serve,” he said.
For example, for hotels that cater mostly to business travelers, most attention should be paid to travel agents, direct-to-hotel distribution and brand.com. OTAs really don’t play in that space, Hart said.
When marketing specifically toward the leisure guest, hoteliers should have more of a mixed strategy, placing inventory on the direct channels and third-party channels, Hart said.
Particularly in the leisure segment, the brand.com channel has shown the most year-over-year growth, while OTA growth follows shortly behind, Hart said. Rates, however, are growing fastest from the OTA channel.
“The rates that are coming through the OTAs have grown a lot more than any of the other channels,” he said. “That’s really just a function of hoteliers having more choices. There are fewer discounted products out there, especially on the opaque channels.”
Also because of increased demand, hoteliers selling an opaque room or a package deal won’t discount as heavily as last year, Hart said, which has led to a “more than average” bump in average daily rate coming from those channels.
Overall, Hart said the industry “has seen a steady progression toward online versus offline.”
“Not that voice and direct to property is not important—they still play a major role—but more and more guests do move online to either brand.com, and you have to look at the OTAs there on the leisure side as well,” he said.
Hart said the mobile channel is going to change the dynamic of how guests interact with hotels and book hotel rooms.