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Developing an Effective Distribution Strategy for Your Resort or Hotel

Hotel and resort owners and operators across the globe – and especially in the Mexico and Caribbean regions – are facing growing competition as new properties move from concept to reality. To improve occupancy, maximize rates and revenue, and ensure profit, they are looking for answers in another area of travel and tourism that is also witnessing growth and change: distribution channels.

While the wide variety of online and traditional distribution options available today presents clear opportunities for resorts to attract guests and boost occupancy, this variety itself generates real challenges.

How, for instance, should properties balance their reliance on online travel agencies (OTAs) in a way that preserves their ability to command top rates? How can they forge trusting partnerships and lasting relationships with traditional wholesalers? How do they evaluate the strengths and weaknesses of any one particular distribution channel, and how can they gauge the impact of OTAs, wholesalers, discount websites, and tour operators on their brand image?

If you own a property today, you know that the answers to these questions don’t come easily. In the rush to compete, you may be inclined to sign with as many distribution channels as possible or focus too intensely on specific channels, while ignoring others.

For example, for independent hotels and resorts, and for older properties looking to keep up with a changing marketplace, the instinct is especially strong to rely heavily on OTAs and even discount websites in an effort to quickly boost interest and occupancy. OTAs can be a particularly valuable resource, but over-reliance, just as with discount websites that rely on multiple flash sales, can come at a heavy price – namely, an erosion in rates, image, and overall profitability.

The key to creating a successful distribution strategy is understanding your marketplace and your visitors, knowing how to maximize rates with the right mix of channels, and truly understanding the relative strengths of each sales partner.

It is also essential to develop strong relationships with your distribution partners so that they have insight into your property and recognize how best to attract new and returning guests. Selective distribution is key, as opposed to universal distribution.

Whether an OTA, wholesaler, tour operator, voice reservation system, loyalty program or club, or your own online booking system, each sales approach can bring value to your resort or hotel, but only when brought into balance through expert management. Here are some considerations to help guide your distribution network strategy.

Examine Your Marketplace and Your Target Travelers

To begin, you need clarity about your target market and about the specific travelers from across the globe who are most likely visit your region. Your choice of distribution partners will clearly be influenced by your prime audience, whether the luxury, family or discount segment, or a mix.

If you run a luxury resort in the Caribbean, you will of course want channels designed specifically to reach your customers at the highest possible rates; if a particular OTA reaches large numbers of potential visitors, but their audience rarely visits the Caribbean and tends toward discount properties, this channel will likely not make sense for you.

While this point may seem obvious, far too many properties allow their management teams to choose distribution channels based almost entirely on web traffic and volume of bookings, rather than on more subtle factors. Yes, you need partners with a sizable audience of potential guests, but you need to know if this audience is your audience.

As mentioned, many independent hotels, with fewer built-in channels that exist through parent organizations or partners, may place too much emphasis on a discounting approach, which could eventually degrade rates and their brand image.

In fact, in today’s competitive environment, many are pursuing brand conversions and joining forces with strong organizations that can deliver on the management and distribution front. They are looking for management organizations that have proven distribution partners.

Develop a Careful Mix of Distribution Channels that Reflect Your Property

While OTAs and the internet in general have re-calibrated the way that guests research and book resorts and hotels, it is important to develop a balance of online and traditional distribution channels. The caveat here is that simply having more distribution partners is not necessarily the strategy that yields the best results.

Many travelers prefer to work directly with experts who can help develop itineraries, recommend properties, and provide not only optimal advice, but optimal rates. AMResorts, for instance, pursues multiple channels, we work closely with other Apple Leisure Group partners, including Apple Vacations, Travel Impressions and CheapCaribbean.com.

While these wholesalers and OTAs do not prioritize AMResorts properties over other in the respective destinations, they do have an in-depth understanding or our specific benefits and amenities. They understand the value of the all-inclusive approach, work with us consistently, and are therefore a powerful fit with our organization.

In addition, the Unlimited Vacations Club membership program continuous to progressively grow. AMResorts also works very closely with preferred partners outside the family of companies to grow our mutual business. As you move to develop a distribution network that will allow you to maximize both occupancy and rates, finding the right fit is key.

It may lead you to join an organization with built-in distribution channels, or it may simply move you to diversify your approach to reach more of the guests that you need.

Evaluate the Unique Value Proposition of Each Channel

Depending on the type of property you own or operate, you will want to include distribution partners who can provide unique benefits that can expand your audience of potential guests. To this end, working with partners who offer travel packages or more customized concierge-type services can be extremely beneficial.

At AMResorts, for instance, our relationship with Apple Vacations adds value: they are an established, recognized organization that carries more vacationers to Mexico and the Dominican Republic than any tour operator in the world, and they are among the largest in the Caribbean. They also offer charter flight options, and special contracts with airlines. They can serve travelers that match with our many different properties.

Ultimately, your property needs to align with distribution partners that can help you reach a broad list of possible guests, the right list, and the kind of list that will allow you to maximize rates and profitability. Travel Impressions partners with top high-end travel consortia: Virtuoso, Signature Travel Network, American Express and Ensemble Travel Group.

Think of your distribution network like an orchestra: its elements need to work together melodically, through crescendos and de-crescendos, to deliver powerfully for you and your audience. It needs to be driven by layers of talented performers who work well together. With the right management team as maestro, the result will be strong bookings and occupancy rates that will make your property a lasting success.

What are you doing to achieve an effective distribution network? Let us know at algdevelopment@applelg.net.

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