The Revenue Manager series threw an epic live podcast event called "How Distribution Impacts the Bottom Line." This mind-blowing session dived deep into the vital role distribution plays in shaping a business's financial success.
The event gathered a Rockstar panel of industry experts who explored various aspects of distribution and its direct influence on the bottom line. They delved into hot topics like channel management, pricing strategies, revenue optimization, and the ever-evolving world of distribution technology.
The direct channel stole the spotlight as the most lucrative avenue, thanks to its low acquisition costs and the ability to generate higher revenue per booking, longer average stays, and lower cancellation rates.
To kick things off, a panel discussion took center stage with industry heavyweights Vikram Pradhan, the SVP of Revenue at Wyndham Hotels and Resorts, Antonio Ducceschi, the CCO of Starhotels, Amit Rahav, the Founder and CRO of HyperGuest, all moderated by the brilliant Christina Blaj, Founder of Open Revenue Consulting.
To watch the full session, click here.
Christina: Hey folks! Today, we're diving deep into the art of boosting profitability through killer distribution strategies. Distribution is the key to keeping those margins healthy. So, let's focus on leveraging the most profitable channel and keeping everything in sync. Here's a hot topic for you - the cost of acquisition. How do you handle it these days?
Antonio: Before choosing a distribution channel for optimizing customer acquisition, it's crucial to define metrics and calculate the investment in each area. We need to pinpoint the real costs, efforts, and staff expenses associated with different segments.
Vikram: Cost goes beyond the upfront payment; it's the hidden costs that can bite you. With a massive portfolio of over 9000 hotels, even the tiniest change can result in big numbers. Balancing cost with reach is key. We utilize all channels, online platforms, social media, GDS, and call centers. One metric we obsess over is incrementality. Does the channel add value to our strategy? We also consider the channel's reach and whether it's worth the cost. Timing and seasonality also affect how much we're willing to invest.
Christina: Let's talk about rate parity. How do you approach it?
Vikram: Parity serves as one of our validation points for choosing the right partner. Transparency from partners is crucial. We have a pricing strategy for our hotels, and we want it consistently implemented across all channels. However, achieving 100% parity is a pipe dream. It comes down to what we can tolerate and steer towards the right booking channels.
Antonio: Maintaining the integrity of our strategy is paramount. We're a smaller hotel group, so certain differentiations are acceptable. Achieving 100% parity is almost impossible. It's important to understand what's acceptable without alienating the customer. We also emphasize rate integrity. When there are disparities, we're honest and communicate with our partners. We invest time in monitoring and understanding the sources of disparity.
That's why we've chosen HyperGuest as our strategic partner. Through this collaboration, we gain several significant advantages. Firstly, by working with a single connectivity platform, we streamline our operations and improve efficiency in reducing rates disparities. Additionally, our margins receive a boost, and we enhance our visibility in hard-to-reach sales channels. Most importantly, HyperGuest's technology seamlessly integrates with ours, enabling us to overcome technological barriers and expand our reach. This partnership is a strategic move that promises tangible benefits for our business.
Christina: Let's shift gears to the B2B approach to distribution. What's your take?
Amit: We've touched upon B2B reach, rate parity, and profitability, and they all represent "Control at scale." The good news is technology keeps evolving, giving hotels more control. Now hoteliers can dictate their commission strategies and have better control over the distribution chain, closer to the point of sale. The real benefit is immediate action-taking for hotels.
Audience attendee: How do you communicate added value?
Antonio: We need to enable customers to choose their preferred channel to interact with us.
Vikram: Customers will book from wherever they prefer anyway.
Audience attendee: Does the pricing strategy and channel costs remain the same for all hotels?
Vikram: It's impossible to have the same pricing strategy for every hotel. There are vast differences. However, some guiding principles help maintain uniformity.
Audience attendee: Any recommendations for a loyalty program for an independent hotel?
Antonio: Independent hotels face challenges when implementing their own loyalty programs. Joining other loyalty programs can provide opportunities
Audience attendee: What are the gains of playing in the meta search field?
Vikram: Meta search is vital. We're guilty of using it ourselves. It offers a broader range of pricing options beyond a single hotel.
Antonio: Having a reliable partner that provides solid data is crucial.
Amit: Absolutely! Data is key, but the user and booking experience matter too.
The next session featured a captivating Executive Interview between Federica Salvatori and Amit Rahav, the Co-Founder of HyperGuest.
Federica: Distribution is undergoing massive changes in the hospitality industry. What trends and predictions do you see?
Amit: We launched HyperGuest in 2020, right when the pandemic hit. It's been an exciting journey exploring how we can leverage HyperGuest to embrace new trends in hospitality.
Artificial Intelligence is playing a significant role in every aspect of the business. The more digital your processes become, the more opportunities arise.
One area benefiting from this transformation is B2B distribution. Technology empowers hotels to regain control in the marketplace.
Federica: How did the idea for HyperGuest come about?
Amit: After years of experience in room sales, we realized that working directly is the dream. The new capabilities in distribution are indispensable today. We're now working with hotels that are learning how to directly engage with the B2B segment. It's an educational and technological evolution.
Federica: In what ways is HyperGuest disruptive?
Amit: What's disruptive is the barriers customers face when doing business with hotels. Booking.com and Expedia are sophisticated in their approach. Many services want to sell hotel products, but technological and commercial obstacles hinder them.
Federica: We have a question from the audience. Is the B2B module better for global businesses? And do you see B2C as a challenge for HyperGuest in local markets?
Amit: B2C is more than welcome, and we do have B2C segments. It varies from hotel to hotel and region to region.
The third session featured a masterclass on distribution.
Christina Blaj from Open Revenue Consulting shared insights into RevMarketing strategies for the direct channel, the powerhouse for hotel profitability. Federica Salvatori from Federica Salvatori Consulting provided insights into the luxury market and the best channels to target high-spending customers.
Access the session by clicking here and skip to 1:10:30 to start watching.
The final session featured a pitch and HyperGuest demo on "How to Turn Your Static Distribution into Profitable Bookings."
Amit: Our mission is to eliminate barriers between hotels and demand generators. HyperGuest is present wherever hotel products are sold—brand websites, global OTAs, and bed banks. HyperGuest eliminates intermediaries. With HyperGuest, all connectivity challenges are resolved.
"How Distribution Impacts the Bottom Line" provided an in-depth exploration of the pivotal role distribution plays in driving financial performance. The live podcast event equipped revenue managers and industry professionals with practical insights, strategic frameworks, and actionable tips to navigate the ever-evolving distribution landscape effectively and boost their bottom line.
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