Channels of Distribution

Channels of Distribution

Official Website

One of the most effective online distribution avenue for hotels is their own websites. Even though the original development fees of the websites are high, the costs related to maintaining the websites are low. A website provides a hotel with an ideal platform to provide its customers with adequate information regarding their brands in addition to appealing to its target audience. A website can make a hotel generate high and direct sales without paying any commission to another party. The focus of many hotels is generating many bookings using their websites, which is the major reason why they offer incentives to customers who prefer direct booking(Dholakia1, Zhao and Dholakia, 2009). Currently, many customers who want to access information regarding the hotels that they want to visit use tablets and mobile devices. According to the TravelClick, the bookings of hotels using mobile devices increased by 42% between 2013 and 2015. This implies that hotels should ensure that their websites are optimized.

Online Travel Agents

This is a vital strategy that positively impacts on revenue management of hotels. Examples of online travel agents that are used by hotels include Expedia, Booking.com, Hotels.com, Priceline, and Orbitz.com. One of the key benefits of using online travel agents is that they can attract new guests who may not access information using other channels. This form of distribution is also important for people who use mobile phones, According to findings by PhocusWright, approximately 64% of all mobile bookings originated through the online travel agents(Bhatt and Emdad, 2001). For hotels to get maximum benefits by using online travel agents, they need to regularly update them with information and ensure that the details they provide regarding the rooms and other facilities are accurate. Additionally, the hotels should focus on responding to the reviews of their customers as fast as possible to avoid the possibility of implications of negative feedback.

Global Distribution System

A global distribution system entails a network that is mainly adopted by travel agents while booking hotel rooms and airline seats for their customers.  The system ensures that the services provided by hotels are consolidated, thus making the booking process easier. The major global distribution systems that can be used by hotels include Sabre, Amadeus, and Travelport. In a majority of cases, a global distribution system caters to an international market of major travel consortia, for example, BCD, America Express, and Carlson Wagonlit. This method of distribution is important for hotels since it ensures they create positive relationships with customers and travel agents, resulting in higher demand for hotel rooms(Armstrong et al.  2014)..

Another advantage of using global distribution systems is that they provide opportunities for attracting demand from various parts of the world(Chaffey and Smith, 2008). To ensure that the rates of the hotels using this channel remain competitive is vital to regularly update their information, thus enhancing customer’s awareness. Given the increasing use of the internet and the rising popularity of smartphones, online channels of distribution have become more important. Even though a global distribution system generates more benefits for a hotel, it makes the hotels to incur high agents and transaction fees while bookings are being made.

References

Armstrong, G., Adam, S., Denize, S, and Kotler, P. 2014. Principles of Marketing. Sydney: Pearson.

Bhatt, D, and Emdad, F.2001). An analysis of the virtual value chain in electronic commerce. Logistics Information Management. 14 (1/2): 18–25.

Chaffey, D and Smith, R. 2008. Emarketing Excellence, Planning, and optimizing your digital marketing. Oxford: Butterworth-Heinemann.

Dholakia1, R., Zhao, M, and Dholakia, N. 2009. Multichannel retailing: A case study of early experiences. Journal of Interactive Marketing, vol. 19, pp 13–24