The Importance of a Direct Online Distribution Strategy

July 16, 2008

“In business, strategy is defined as a long-term plan of action designed to achieve a particular goal i.e. Success.”

As an hotelier, you have marketing plans, advertising campaigns and a host of other tactics designed to attract guests to your hotel, increase your occupancy levels and boost your revenue. The question you need to ask, ‘Are any of these plans meant for your online distribution channel? If your answer is ‘No’ then, you need to ask ‘Why not?’

Today, the internet plays an integral role in your guest’s lives – they use it to communicate, to increase knowledge, to search for information and even source for their travel requirements. As an hotelier, you have already taken steps to adjust to this changing environment by adding an Online Distribution Channel ‘Hotel Website’ to your distribution mix. Now, you need to go a step further by developing a direct online distribution strategy that will squeeze the maximum out of your 24 x 7 sales channel i.e. your 'Hotel Website'.

So, what is a Direct Online Distribution Strategy?
Direct Online Distribution Strategy is a line of action, which will encourage travelers to book their travel requirements directly through your hotel website. Developing a successful direct online distribution strategy is not easy. In this article, we will help you develop a direct online distribution strategy for your hotel website by providing you with in-sights into your consumer and the different online marketing techniques at your disposal.

Understanding the impact of the Internet on Consumer Behavior
You can enhance your hotel’s presence on the Internet by understanding the current Internet marketing trends and traveler’s expectations and perceptions.
  • In the past few years, the Internet has become an integral part of people’s lives. It has become a basic tool of information such as a newspaper or a television. In fact, it has surpassed these two mediums as sources of information as it provides guests with unparallel convenience and search capabilities. Today, an increasing number of people are using the internet to search for their travel requirements and compare to hotels, pricing and packages. This convenience has caused a shift in the booking pattern from traditional mediums like travel agents to online mediums. In fact, a study by Merrill Lynch on booking patterns within the hospitality industry indicates that this number will only increase in future.

    Shift in Booking Patterns – Merrill Lynch
     Overall for the industry (USA) 2003 2005 2007 2008 2010
     Hotel Branded Websites 53% 54% 60% 62% 65%
     Intermediary Websites 47% 46% 40% 38% 35%

  • Travelers sourcing their travel requirements online use two basic sources – Travel Websites and Hotel websites. According to a study conducted by Forrester Research, “Online customers prefer dealing directly with the travel suppliers, including hotels, when purchasing travel online.” However, price does play an important role in the final decision making process of the traveler, as he will choose to book from the website offering him the best package at the lowest price.

    If you knew that the price of travel would be the same, who would you prefer to buy travel from? - Forrester Research (2002)
     Travel Supplier: 69%
     Travel Agency: 27%
     Other: 4%

  • Travelers are also using discussion forums, blogs and social networking sites like Trip Advisor to compare information found on your website with what your past guests say about you.

Now that we know how the traveler thinks when booking online, let us learn what direct online distribution strategy is and how to develop a strategy that will drive travelers to book directly from your hotel website.

Marketing Stratgies used in a Direct Online Distribution Strategy
We will discuss 5 types of marketing techniques and how you can use them in your Direct Online Distribution Strategy. They are website optimization, search engine optimization, destination focused optimizaion, email marketing and PPC programs.

Website Optimization
A hotel website is a 24 x 7 sales channel that will increase your hotel's revenue. You can achieve this goal by optimizing your website to be use-friendly. You can achieve this by making sure your design is aesthetic and will appeal to your guests, all website content is relevant and updated and guests can navigate through the website with ease.

This will help you draw more traffic to your hotel website and then, retain their attention once they are there:

Search Engine Optimization
Search engines are an essential component of the direct online distribution strategy, as it will drive interested visitors to your hotel's website, which will improve your look-to-book conversion rate. According to Forrester Research, about 80% of overall website visits begin in a search engine or a directory service. Many other surveys also show that up to 85% of Internet users rely on search engines to locate relevant information on the Web (e.g. Google, Yahoo, MSN, etc).

To optimize your website for search engines, you need to make sure you have created web-friendly copy that is embedded with keywords, destination focused text, included target keywords, meta tags, description tags, etc.

Destination Focused Optimization
Customers search for travel and hospitality services and offerings within the context of a particular destination.

For example: Your hotel ‘Angel Resorts’ is located on a beach in Goa. And you can optimize your hotel website using the keywords such as Hotel + Angel Resorts + Beach + Goa, then when an interested guest searches for hotel accommodation using those keywords, your hotel website will rank higher (will be on the first few page) on the search engine.

You can boost your revenue by optimizing your website using a destination-focused search engine strategy i.e. use the destination’s popularity to sell your hotel.

Email Marketing
Email marketing is a crucial component of the hotel's direct eMarketing and online distribution strategy. You can use email marketing to solicit new customers and retain exiting customers. You can use monthly e-newsletters to communicate with guests about what is happening in and around your hotel such as festivals, carnivals, competitions, new schemes etc. This will help generate interest and convert potential guests into guests.

When using your own email list to market your hotel, the conversion rates can be 15-20 times greater than any rented mailing list because the targeted group already knows and has experienced your product first-hand. In addition, you can customize your communication to appeal to a certain audience, you can offer returning guests discounts and include a Book Now button to encourage guests to book immediately

So, start interacting with potential and existing guests today with monthly or quarterly newsletters.

Pay-Per-Click (PPC) Marketing
PPC marketing (PPC) is a powerful tool in your hotelier's direct-to-consumer online distribution strategy.

Pay-per-click marketing is a popular and smart technique used to position your hotel website as "Sponsored Links" or enhanced listings on top of the search engine results. Unlike algorithmic (natural) search engine listings, you control the actual creative copy of your listing (i.e. you can promote a concrete rate) and its ranking (i.e. your listing can be at #1 position if you can afford it).

We hope this article has proved to be informative and helps you build a Direct Online Distribution Strategy that will boost your revenues.

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