Industry Perspectives

Navigating hotel distribution during recovery

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Katie Moro, Vice President of Data Partnerships, Hospitality at Amadeus, shares how the pandemic has disrupted the hotel distribution landscape – and the data to keep an eye on moving forward

In today’s environment, the travel industry is facing constant shifts in booking behavior. From compressed booking windows to value-vying guests, how can you best adapt to these trends? We speak to Amadeus’ Vice President of Data Partnerships for Hospitality, Katie Moro, about the patterns impacting hotel distribution worldwide – and how you can rethink your strategy to capture available demand. 

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Katie Moro
Katie Moro, Vice President of Data Partnerships, Hospitality at Amadeus

Click.: What should hotel managers keep in mind when deciding their channel mix during recovery?

Moro: It’s important to be everywhere right now, and there’s an opportunity at every touch point for you to win customers. It doesn’t have to be the same channels you worked with in 2019, either. Start to figure out what other channels you could leverage to reach more travelers. For example, Online Travel Agencies (OTA) are great for independent properties to increase brand awareness because they’re in a good position to bring in travelers. Even if people book directly with a property, they still scroll through OTAs first to see what options are out there. 

Properties should focus on starting or expanding relationships with channel partners that are strong, doing well, and going to help them cater to current trends. For example, Booking.com facilitates flexibility for its partners with various cancellation policies, and we know cancellation flexibility is critical right now. As a hotel manager, you don’t want to be on a site that has strict cancellation policies because the likelihood you’ll get booked there is slim. It’s important to ensure you’re partnering with sites that are aligned with what travelers expect based on what the industry has set as the standard. 

Click.: What trends are you observing across different channels? 

Moro: Based on our Demand360® business intelligence data, since Summer 2020 we see direct bookings are leading as the strongest channel. That’s never been the case before. There weren’t a lot of reservations happening at the property level, but that number has drastically increased. This is likely because people are really trying to gather as much info about a property as possible before they book it. Ultimately, this leads to booking directly. After property direct, we see a split of the online channels – whether that’s an OTA or brand website. According to our data, these are currently the three strongest channels. 

There’s also been a huge shift in the booking window. In normal times, booking lead time is between 7 and 14 days on average, but now we’re seeing 60% of reservations coming in 0 to 7 days before arrival. We see it even stronger in the 0–3 day window, as in very last-minute bookings. OTAs do very well in those 0–3 day windows, so it’s important to make sure you’re available and people can book you on all touch points. Understanding the lead time in your market and making sure you’re available and priced appropriately based on those lead times is critical. That’s been the biggest shift and will require a change in how you run your business.

Click.: How can hotel managers best navigate and adapt to these shifts? 

Moro: Last year Average Daily Rate (ADR) in the US went down by over 20%. That’s going to be a hard thing to recover from. A big part of what properties can do to maximize revenue right now is to not drop their rates in hopes of driving demand. However, you have to stay competitive, and if the market lowers its rate and there is demand, you’re going to have to follow suit in many cases. 

It’s important to watch trends, but know you can’t really rely on historical data trends that are no longer relevant. It’s important to monitor recent data points or forward-looking data to inform decisions. Because the landscape is changing so rapidly, you can no longer use historical data to predict what’s coming.

Finally, consumers are seeking out more info than ever before, so ensuring your channels are up to date with the latest and most relevant info is crucial. Communicate with your audience across channels, highlighting important info that addresses topical concerns such as flexibility and cleanliness. Transparency is very important across all channels – not just your own website. 

Click.: Looking towards the future, can we expect these trends to continue post-covid?

Moro: COVID-19 is ongoing, and the situation remains fluid and uncertain. We continue to monitor it closely and are working with our customers to find solutions to the challenges the industry is facing. As an organization, our goal is to improve hotel manager access to market insights and to help them understand changes in traveler booking trends. This is also why using tools that leverage the most up-to-date, on-the-books data is more important than ever before because they help hotel managers to make informed decisions.

 

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Takeaway
  • Partner with sites that are aligned with what travelers now expect. For example, cancellation flexibility is critical right now, so you want to be able to offer various cancellation policies
  • There’s been a huge shift in the booking window, with many last-minute bookings coming in 0–7 days before arrival
  • With the landscape is changing so rapidly, you can no longer use historical data to predict what’s coming. Look to recent data points or forward-looking data when making decisions
  • Consumers are seeking out more info than ever before. At this time, transparency is key across all channels – not just your own website.