DistributionChannelManagement

Woodsetal.,ProfessionalFrontOffice
Management

2007PearsonEducation,UpperSaddleRiver,
NJ07458.AllRightsReserved.

DistributionChannelOverview
Intermediary:Anentityauthorizedbya
guesttomakeahotelreservationonthe
guestsbehalf.
TravelAgent:Ahospitalityprofessional
thatassistsclientsinplanningtravel.

Woodsetal.,ProfessionalFrontOffice
Management

2007PearsonEducation,UpperSaddleRiver,
NJ07458.AllRightsReserved.

DistributionChannelOverview
Historyofdistributionchannels:
THISCO:ShortforTheHotelIndustry
SwitchCompany.

Woodsetal.,ProfessionalFrontOffice
Management

2007PearsonEducation,UpperSaddleRiver,
NJ07458.AllRightsReserved.

DistributionChannelOverview
TravelWholesaler:Anentitythat
purchasesblocksofhotelroomsand,in
turn,sellsthemtotravelagents.
Step1:Ahotelsellsroomstoatravelwholesaler.
Step2:Thetravelwholesalersellsroomstoatravelagent.
Step3:Thetravelagentsellsroomstoanindividualguest
(orgroup).
Step4:Theguestorgroupstaysatthehotel.

Woodsetal.,ProfessionalFrontOffice
Management

2007PearsonEducation,UpperSaddleRiver,
NJ07458.AllRightsReserved.

DistributionChannelOverview
Fiduciary:Arelationshipbasedupontrust
andtheresponsibilitytoactinthebest
interestofanotherwhenperformingtasks.

Woodsetal.,ProfessionalFrontOffice
Management

2007PearsonEducation,UpperSaddleRiver,
NJ07458.AllRightsReserved.

DistributionChannel
Management

Walkin
Telephone
Fax
Email/traditionalmail
Hotelsalespersonnel
GDS
Chainorbrandcentralreservationsystem
Internet

Woodsetal.,ProfessionalFrontOffice
Management

2007PearsonEducation,UpperSaddleRiver,
NJ07458.AllRightsReserved.

DistributionChannel
Management
NetADRYield:Therate(ADR)actually
receivedbyahotelaftersubtractingthecost
offeesandassessmentsassociatedwitha
roomsale.
RoomRateReservationGenerationFees
RoomRatePaid
Woodsetal.,ProfessionalFrontOffice
Management

2007PearsonEducation,UpperSaddleRiver,
NJ07458.AllRightsReserved.

DistributionChannel
Management
Walkin
Specificstepstohelpmaximizewalkinrateacceptance:

Animmediatewelcomeandfriendlyacceptance
Attractiveandcleanlobbyarea
Specialdiscountsforlastminutetravelers
Anupgradedroomassignmentfromastandardtoa
higherlevelroomtype
Useofalogicalfaderate

Woodsetal.,ProfessionalFrontOffice
Management

2007PearsonEducation,UpperSaddleRiver,
NJ07458.AllRightsReserved.

DistributionChannel
Management
Telephone
Importantareasforpotentialimprovement:

Telephoneetiquette
Qualifyingtheguest
Describingtheproperty
Presentingtherate
Overcomingpriceresistance
Upselling
Closingthesale(makingthereservation)
Recappingthesale

Woodsetal.,ProfessionalFrontOffice
Management

2007PearsonEducation,UpperSaddleRiver,
NJ07458.AllRightsReserved.

DistributionChannel
Management
Fax
Tomaximizeeffectiveness:

Provideguestswithadesignatedtollfreefaxnumber
Trainreservationstafftorespondtoareservation
requestimmediatelyuponitsreceipt
Considerpurchasingsoftwarethatallowstheuseofthe
hotelsemailsystemtoreplytoreservationrequests
Keepadequatesuppliesonhand
Useprofessionalcoverandcontentsheets
Woodsetal.,ProfessionalFrontOffice
Management

2007PearsonEducation,UpperSaddleRiver,
NJ07458.AllRightsReserved.

DistributionChannel
Management
Email/traditionalmail
Tomaximizeeffectiveness:

Replytoallmailinquireswithin24hours
Foremailusethehotelsnameintheresponse
messagetitleline
Fortraditionalmailuseprofessionallyprinted
stationaryandprohibituseofphotocopiedfillinthe
blankletterreplies
Useautomatedspellchecksoftware
Signallmailclearly
Woodsetal.,ProfessionalFrontOffice
Management

2007PearsonEducation,UpperSaddleRiver,
NJ07458.AllRightsReserved.

DistributionChannel
Management
Groupsalesdepartment:
Attrition:Thedifferencebetweenthe
originalroomrequestandtheactual
purchaseofagroup.

Woodsetal.,ProfessionalFrontOffice
Management

2007PearsonEducation,UpperSaddleRiver,
NJ07458.AllRightsReserved.

DistributionChannel
Management
GlobalDistributionSystem(GDS)
Tomaximizeeffectiveness:

Monitorthenumberofreservationsreceivedfromeach
GDS
Establisharelationshipwith1+contactsfromeachGDS
Establisharelationshipwith1+travelagents
Considertravelagentsasauniqueandimportant
market
ConsiderjoiningandbecomingactiveintheAmerican
SocietyofTravelAgents
Woodsetal.,ProfessionalFrontOffice
Management

2007PearsonEducation,UpperSaddleRiver,
NJ07458.AllRightsReserved.

DistributionChannel
Management
CentralReservationSystem(CRS)typically
consistsof:

Tollfreetelephonecallcenter
Chainoperatedwebsite
Email/traditionalmailreservationsdivision
Groupsalesdivision

Woodsetal.,ProfessionalFrontOffice
Management

2007PearsonEducation,UpperSaddleRiver,
NJ07458.AllRightsReserved.

DistributionChannel
Management
CentralReservationSystem(CRS)
Tomaximizeeffectiveness:

Ensurethatallhotelrelatedinformationsuppliedtothe
brandscallcenterisaccurateandcurrent
ConductperiodicshoppercallstotheCRS
Consideranannualvisittothebrandscallcenter
Ensurethatallinformationlistedonthewebsiteisaccurate
anduptodate
Supplyattractivephotosandcreativesitecopy
Followuppromptlyonanygroupbusinessleadsprovided
bytheCRS
Woodsetal.,ProfessionalFrontOffice
Management

2007PearsonEducation,UpperSaddleRiver,
NJ07458.AllRightsReserved.

DistributionChannel
Management
Internet
Ewholesaler:Aroomresellerthatobtains
reduced(wholesale)roompricesandinventory
commitmentsdirectlyfromahotelorthroughan
agreementwiththehotelscorporatebrand
managers.Itthenpublishesretailratesonits
websites,usuallyatamarkupof20%to40%.

Woodsetal.,ProfessionalFrontOffice
Management

2007PearsonEducation,UpperSaddleRiver,
NJ07458.AllRightsReserved.

DistributionChannel
Management
Internet
Principlestoconsider:
Ensureaccuracy
Updateregularly
Monitorplacement
Managesearchengines
Maintainrateintegrity
Monitorresults
Woodsetal.,ProfessionalFrontOffice
Management

2007PearsonEducation,UpperSaddleRiver,
NJ07458.AllRightsReserved.

DistributionChannel
Management
Internetpropertywebsites:
Factorstoconsider:
Writtencontent
Visualandaudiocontent
Reservationsdevice
Appropriatelinks

Woodsetal.,ProfessionalFrontOffice
Management

2007PearsonEducation,UpperSaddleRiver,
NJ07458.AllRightsReserved.

DistributionChannel
Management
Internetchainwebsites:
LowestRateGuarantee:Aprogramthatassurestravelers
thelowestavailablerateforaspecificroomtypeona
specificdatewillbefoundonthefranchisorswebsite.

Woodsetal.,ProfessionalFrontOffice
Management

2007PearsonEducation,UpperSaddleRiver,
NJ07458.AllRightsReserved.

DistributionChannel
Management
Internetthirdpartywebsites:
MerchantModel:AnInternetsalesmethodinwhich
hotelssellorcommitroomstoInternetsiteoperators.
Thesesites,inturn,allowconsumerstoenterrequested
locationandarrivaldates.Theconsumersarethen
presentedwithachoiceofspecifichotelsandassociated
ratesavailableforimmediatepurchaseonthewebsite.

Woodsetal.,ProfessionalFrontOffice
Management

2007PearsonEducation,UpperSaddleRiver,
NJ07458.AllRightsReserved.

DistributionChannel
Management
Internetthirdpartywebsites:
OpaqueModel:AnInternetsalesmethodinwhich
consumersbidanamounttheyarewillingtopayfora
roomonaspecificarrivaldate,andthethirdpartywebsite
operatormatchesthatbidwithahotelwillingtosella
roomsatthatrate.

Woodsetal.,ProfessionalFrontOffice
Management

2007PearsonEducation,UpperSaddleRiver,
NJ07458.AllRightsReserved.

DistributionChannel
Management
Internet
Tomaximizeeffectiveness:
Seekrateparityacrossalldistributionchannels
Showthehotelonasmanysitesasisrealisticallyprofitable
Keepallinformationcurrent
Promotetheuseoflowercost(highernetADRyield)sites
overhighercostsites
Usetheinformationfoundoncompetitorswebsitesto
compareandevaluatethehotelsownratemanagement
decisions

Woodsetal.,ProfessionalFrontOffice
Management

2007PearsonEducation,UpperSaddleRiver,
NJ07458.AllRightsReserved.

DistributionChannel
ManagementChallenges
Inventoryownership
Websiteaccesscontrol
Guestandsalesrelatedissues:
Rateconsciousness
Groupblockmanagement
Occupancytaxliability

Woodsetal.,ProfessionalFrontOffice
Management

2007PearsonEducation,UpperSaddleRiver,
NJ07458.AllRightsReserved.