CIOTechOutlook >> Magazine >> August - 2016 issue

Optimize Revenue in Hotels with Use of Distribution Channels & Technology

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With hotels in Mumbai, Chennai and Aurangabad, The Ambassador Group is a travel and hospitality services provider in India. The Group provides services such as Hotels, Flight Catering, Food Retail, Hospitality Management, and Power Generation.

Revenue the term itself attracts the attention of any person. Every Organization aims to earn more and more Revenues in the shortest period, to achieve ROI as early as possible.
Revenue Management is also called as Yield Management in few sectors; it’s basically Optimizing Yield or Net Revenue in various situations by studying, analyzing given situation and then work out strategies accordingly. Let’s take an example of a hotel room; every hotelier knows it’s a perishable product & if you don’t sell for that day then you are lost. Selling these rooms at right price is also a challenge, to overcome both these problems new generation Revenue Management concept started in Hotel Industry.

Use of Technology in Distribution Channels:
Technology plays very important role in Online Distribution System, I will try to elaborate few Distribution Channels:

1. Global Distribution System (GDS):
The Global Distribution System (GDS) is a "TOOL" for Travel Agents to access information worldwide and book:
• Flights
• Hotel Accommodation
• Cars & Cruises etc
GDS is predominantly used by most of the Travel Agents across the world.
There are four major players:
• Amadeus
• Galileo
• Sabre
• Worldspan
Hotel ties-up with a service provider like Utell, Unirez, Luxury Group, Synxis, I-Hotelier, Trust etc. These GDS service providers generally charge the following:
- One time set up fee
- Monthly Data Maintenance Fee
- Minimum Guarantee fees
- Travel Agents commission
- GDS fees per transaction

Always better to tie-up with a GDS service provider who gives seamless connectivity. By this the person gets instant booking confirmation to the extent of inventory allocated - rather than waiting for a confirmation from the hotel. All GDS bookings are guaranteed by credit card. The hotel is expected to take a pre-auth/hold for the booking received.

2. OTA Extranet: OTA means Online Travel Agents – there are international OTAs like booking, Expedia, Agoda, HRS and domestic OTAs like Goibibo, Makemytrip, Yatra, Cleartrip, Travelguru in Indian market. In recent years OTAs are constantly increasing their Market share and thus became a very important Distribution Channel for hotels and airlines.
Every OTA is based on two aspects attractive Front End for customers and solid back end technology to take care all needs of Demand & Supply sides. These channels are often described as Extranet (distribution backend technology given to Hotels). Generally hotel gets secured access of Extranet to update inventory, rates, offers, taxes and contents on OTA, which reflects on OTA front end/portals.

3. Hotel’s Website with Booking Engine: It’s recommended to have user friendly, e-commerce based website for the hotel. Apart from the reason of giving details about the property to visitors, the main objective of having a hotels website is to generate revenue. No point in having a fantastic website and spending a bomb without any revenue generation. Any hotel website should give as much details as possible. It is a place where a Non-verbal sale is taking place. The pages need to be updated regularly. It should also have a booking engine which should be quick, user-friendly, secured, and helps in optimizing booking conversion rate. Hotel website is also required for Marketing your hotel online. As per latest technology it’s recommended to have CMS (Content Management System) linked to hotel’s website it makes your work easy to update the website pages / content regularly.

4. Social Media: Apart from connecting people, now a days social media is also being used to generate hotel bookings and thus become a new distribution channel for the hotel. Facebook which is the topmost Social Media channel gives opportunity to add hotel’s booking engine directly on your facebook page. Review Channel Tripadvisor also works as Meta Search Engine which allows OTAs to showcase hotel’s rate for given dates and thus also act as one of the Distribution network for hotels. It’s advisable to do various Marketing campaigns to optimize your direct and indirect sale through distribution channels.

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