Electronic Channel Distribution Hotel Inventory Pearl Brewer, Ph.D. University of Nevada, Las Vegas

Channel Distribution Terms Merchant Model –Intermediaries negotiates rooms at net rates with suppliers and then sells them at a marked-up price. Opaque Site –Brand opaque Hotwire.com –Price opaque Friendlyplanet.com –Auctions or Name your own Price Priceline.com

Distribution Channels The Hotels Website Chain Website CRS links to travel agent websites or travel agents Auctions or other opaque sites Airline sites Online intermediaries –Affiliates Tour Operators Brokers

Distribution Channels Handout

Issues for Hotels – A Study Of Hotel Operators

Control Issues Ability to control inventory –manipulating black out dates and allotments –inability to close out inventory –manipulating availability Ability to control Rates –maintaining rate parity –not able to change rates as needed Power in the negotiation of Contracts with large companies (Expedia, Travelocity etc.) Control property descriptions across the web.

Profitability Issues Revenue Yield Reduction in Margins due to discounting Collecting Payment Transactions costs

Ability to Manage Channels Time Knowledge of the channels –Ease of use of each channel from the management perspective –Data received from channels Skills needed to manage channels –Who should be responsible

Customer-centric Issues Visibility of sites to the target audience –Do they reach the intended market? Market positioning –visual ranking of the channel on the user’s search engine display Purchase of keywords Purchase Sponsored links Usefulness of the sites –Ease of use for the customer –Availability of information Image of the channel in the mind of the customers

Corporate Restriction, Technology, and Data Issues Chains and Corporation may place restrictions on their individual properties Technology to control channel management is either not known or understood by management Data collection an use in minimal and difficult

Channel Management Strategies Most Hotels did not have an official strategy Those strategies in use:

Channel Management Strategies Best rate guarantee –Rate parity is a pricing strategy Yield management strategies including regular yield meetings, to maximize revenue by establishing rates and availability or driving rates over high occupancy dates. Search engine strategy Selective channel participation

Still a “hot” topic for Hoteliers