No hotel is an island, especially in distribution, and once you accept that fact then the wisest approach to take is to then find the right distributors who can give you the most value.
That was the general consensus of hoteliers speaking at WIT Hospitality. Puneet Mahindroo, corporate director of revenue management, Four Seasons Hotels & Resorts, used the analogy of Apple to illustrate that we live in a world of collaboration and partnerships.
“An Apple product has parts made by Samsung, bits made in Taiwan and China, that’s the kind of world we live in, so hotels have to find partnerships and collaborators that make the most sense for us.”
Of course, he said hotels have to work on their direct distribution strategy but he said a key question remains unanswered, what’s the true cost of distribution channel by channel. “No one has really done the math and we at Four Seasons are attempting to answer that.”
Only with such clarity can hotels then figure out what’s the most effective digital strategy.
He said direct distribution sounds easy but “can be a nightmare” when you come up against the power of certain distributors. “That doesn’t mean we don’t try, just that it’s a challenge.”
WIT’s Yeoh Siew Hoon (2nd right) leading the panel discussion on distribution partnerships with (L-R) TravelClick’s Maria Taylor, Fairmont’s Carmen Lam & Four Seasons’ Puneet Mahindroo
This is why Carmen Lam, vice president, sales & marketing, Fairmont Hotels & Resorts, said hoteliers needed to reduce their dependence on OTAs and needed to pursue a “Tilt” strategy – from thinking of product to thinking about customers.
She said it wasn’t about cutting out OTAs but rather pursue a strategy based on owning the customer journey and experience.
Mahindroo and Lam said OTAs could help hoteliers by sharing as much of their customer data as possible in advance. This is of course a sticking point with data now sitting in silos jealously guarded by those who profess to own it.
Maria Taylor, vice president Asia of TravelClick, said one area of concern is the blurring of lines between meta and OTAs, which is driving up customer acquisition costs.
TripAdvisor, for instance, has signed partnerships with Booking.com and Marriott, extending its reach to offer customers Instant Booking capabilities on brand.com sites. Trivago and Hotelscombined are also offering facilitated booking where customers who search on their sites can book direct on a brand.com site.
Hichame Assi, COO of Hotelscombined, said beyond focusing on the “facilitated booking” feature, it was more important hotels understand the full potential of the metas and the power of the data. “Don’t get hung up on that, you’re fighting upwards. There are lots more challenging things for you to worry about – like what Airbnb is doing to your business.”
Expedia’s Mieke De Schepper: “Hoteliers should focus on being hoteliers and not be distributors.”
To harness the true potential value of distribution partners, Mieke De Schepper, vice president, Asia Pacific, Expedia said hoteliers needed to work with OTAs in a real-time way because this is where things are going.
She said hoteliers should focus on being hoteliers and not be distributors because that’s a complicated and expensive area to get into. Expedia invests millions on customer acquisition and $750m on technology last year – “make use of our reach and expertise to give you a diverse customer base”.
When asked what wish she had when it comes to distribution partners, Taylor said “they need to become a true part of the value chain, that is add value, not destroy it”.
