The old adage goes: "It's not what you know, it's who you know." But, actually, when it comes to your hotel brand's distribution strategy, it might be more about what you know regarding your guest's motivation and inspiration, rather than who you know them to be demographically.
According to Noctober Value Partners research, the reason why a guest travels — or the "stay occasion" as the company has dubbed it — may have far greater power over how and with whom a guest chooses to book, than that guest's age, gender, nationality or income.
In an excellent blog, Noctober Value Partners managing director, Del Ross, states that using demographics (such as occupation, gender, income, age and so on) to determine the kind of guest a particular hotel brand attracts, is not as powerful as initially believed. The single biggest driver of hotel selection, he writes, is the decision process behind why a particular person travels.
Interestingly, his company's research revealed that different reasons and motivations for traveling result in the use of different distribution channels. For example, despite having several distribution channels as viable booking options, leisure travellers who were going on vacation preferred to use an OTA, business travellers who didn't require reimbursement went direct, while those who went with a business group or for meeting used a planner.
Interpreting the research
When you consider that hoteliers have no influence over whether a person travels and no power to increase the overall number of travellers and trips, this kind of information becomes vital. The market is finite, after all, so how you move within its boundaries and work its dynamics is key.
If a guest's reason for traveling informs their decision over where and how they book, then it's more than worth your while to figure out exactly why your hotel guests are staying with you. You need to know what their decision process is like and how that relates to the way they book (direct or through a third party channel — and which one).
So do a little digging, churn over your data and ask yourself these questions:
- How do I see my hotel in terms of stay occasions (i.e.: Is it a business travel destination or a holiday resort?)?
- Is there a discernible difference in the type of stay occasion the various distribution channels attract?
- Does this match my image of my hotel?
- Does one OTA attract a different stay occasion to the others?
- Is this a good or a bad thing?
- Does one particular stay occasion dominate across all channels (or across all OTAs)?
- Do I want to expand into a stay occasion market that my hotel currently doesn't reach?
- If so, is there an OTA that can help me do that?
- If not, is the current level of investment in OTAs necessary?
- Does my current branding and content reflect the stay occasions that the distribution channels attract?
- Is there something I could be doing to better cater to that profile of guest?
- Does my hotel have any points of difference that would benefit the stay occasion customer and how can I highlight them?
- Which hotel facilities best match the needs of a desirable stay occasion market (for example free WiFi or conference rooms for business travelers)? Are they highlighted to their best potential?
- Which types of hotel images best reflect the stay occasion that I'm aiming to attract?
- Which keywords best describe or apply to the stay occasion customer that I'm attracting? And how can I better use them in my copy?
- Is there an OTA that I'm currently not listed with, who has good reach into a desirable stay occasion market?
An OTA strategy
Once you have your answers, you can begin tweaking your hotel revenue and OTA strategy. If the vast majority of your guests — regardless which channel they booked through — are motivated by the same thing (for example your hotel is a business travel destination), then you can focus your budget, branding and marketing efforts at better servicing them. Determine how useful the OTAs are in this and which ones are better equipped to help you supplement or expand your business. Consider scaling back or redirecting funding when an OTA doesn't reach the right type of stay occasion market.
If things aren't so clear-cut and the stay occasions are split across various distribution channels, customize your presence on each site and listing to reflect the stay occasion market that it attracts. For example, if you find that Booking.com lands you vacation leisure travellers, tailor your listing content to that type of guest. Consider whether you're happy with the split of stay occasions you currently receive or whether you'd like to take your hotel in one set direction.
Above all, use your data wisely — the better you understand the reasoning behind why guests choose your hotel from a myriad of others, the better you'll be able to pander to them. Not to mention that understanding what your guests want, helps to deliver a better guest journey and secure direct bookings in the future.
How to increase hotel revenue – A case study by hetras and AHM
With a laptop and a cup of coffee as constant companions, Agnes Stockburger lives out her life as freelance journalist, editor and published author. She once used her wordsmithery to enrich lifestyle and B2B finance publications in Sydney, Australia, but has since made her home in Munich. These days she spends her time analyzing OTAs, writing articles on a range of topics and trying to teach her toddler not to eat rocks."