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CHAPTER 8: DISTRIBUTION CHANNELS Travel wholesaler: A large-volume travel industry intermediary who sells to other, smallervolume travel intermediaries. Exp: hotelbeds group; JTB As a hotels, your Contracting blocks of rooms to a wholesaler and it is called a release schedule so you contract those rooms when you give them a discount on those rooms essentially you're giving them a wholesale rate on a room. So in theory, the way it supposed to work as you give them a discount on the rooms and they package them and so there's no issue with rate parity. The customer saying the room they're supposed to cheaper than With this wholesalers i will booked in here because they do packaging them, if they don’t packaging them, they will supposed to resell them the room you're supposed to mark it up a certain percentage so it's now selling in line with what are sell rate is that's how it's supposed to work. What often happens is wholesalers resale rooms to other wholesalers who then mark it down in market more than they're supposed to so you end up having best rate guarantee issues meaning customer might see lower rates elsewhere they call the hotel and say why is there a cheaper rate here in the hotel has to match it and cost them money and anyway there's a lot of issues managing. Recently as part of the last round of negotiations between Expedia and Marriott is that Expedia gave Marriott a significantly reduced commission amount I believe it's somewhere around 12% now that used to be 50 and 16% Commission in exchange for that and out of courses in represents hundreds of millions around the world and exchange for that Marriott has given Expedia their wholesale business to manage so all wholesale business through for Marriott is now managed by Expedia because it was such a headache for Marriott to manage it so some give-and-take with the negotiations so hotels are selling block space the whole city want to say 2 years ago

Hi s t o r i c a lo fdi s t r i but i o nchannel Prior to 1970s, primary distribution channel was telegraph, mail systems and telephone => slow and labor-intensive

1970, global distribution system (GDS), the larger airlines use the electronic booking of tickets to be more efficient and cost- effective.

In its early development, each airline created its own GDS program. -

Sabre by American Airlines to its electronic booking system.

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Amadeus by the joint GDS effort created by Air France, Lufthansa, Iberia, and SAS airlines.

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Apollo by United Airlines (later merged with the GDS system devised by British Airways, Alitalia, Swiss Air and others, and renamed Galileo BECA).

16 of the largest hotel chains decided that if they pooled their resources they could develop a single GDS interface to reduce GDS reservation fees from the airlines. As a result, for each reservation made using the GDS, hotels paid three fees—one to the travel agent using the GDS, another to the switching company interfaced with the GDS, and yet another to the GDS operator. Today, Pegasus Solutions is the company that owns and maintains the original lodging industry’s GDS switch connects the three remaining GDS companies (Sabre, Amadeus, and Galileo) to over 86,000 hotels and 63,000 travel agents ???Why market segment set up in the different way/ for exp one chain hotel might have their ota booking segment by itself and why another chain mix ota booking with retail room !! in some cases they will determine the different way which is the most efficient for them to evaluate their business which is the easiest way to manage. For exp, retail with ota booking, but different advantage booking. Other may have opeue for itself to have discount, ultimately, using different and tricky to compare. Why we segment How we segment Consideration -

Guest preference or they don’t know any different even, different guest book different room by different ways Brand.com vs ota.??? Why most of reservation are booked through GDS rather than brand.com => it is because of mandated. Many cooperation are booked through the GDS

Many companies will mandate therefore in some company, their bookings all go through the specific GDS or agency or OTA. Travel policy

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Expanding my reach I don’t want all my eggs in one basket to not lose potential booking.

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Seasonality

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Ease of management

Choosing distribution channel consideration -

Net ADR yield : after we pay the commission, how much we earn

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Revenue / revpar: rate, margin and volume as well as occupancy to consider that whether you should choose that OTA or not

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Reach and exposure: do significant advertising to make customers know about u otherwise you will love potential customers. All will have to considered in the end of the day is the effect on hotel profitability Different channels

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Social media ( facebook) click the link to directly brand.com

Electronic reservation set up specific to track it to know how much business from that now here's the same with electronically booked reservations soSo I know how much business I'm receiving from that now here's the thing with electronically booked reservations so you know whether it's Facebook or or you know as a result of a specific promotion that set up by our marketing department or whatever we set up specifically so we can actually track a booking just by the way it was booked as well as their lot of electronic ways to track bookings but for me the most a ffe c t e dt h ee a s i e s twa yt op u l lr e p or t si sb yr a t ep l a n ss oIc a nc o l o u rwa i tt i mep r o du c t i o nr e p o r t a ndIc a ns e ee x a c t l ywh a tig o tf r omt h a t

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r d 3 p a r t yme e t i n gp l a n

Ba s i c a l l yi sf o rGr o upb u s i n e s sa n dt h e s et h i r dp a r t yMe e t i n gPl a n n e r swo r konc o mmi s s i o n a n dt h e yd e a lwi t ht h es a l e sma n a g e r st ob r i n ggr o up st oh ot e l sa n dt h e r ea r ep a i dg e n e r a l l ya 1 0 %c o mmi s s i o n -

GDS

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WHOLESALERS

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OTAs

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Br a n d . c o m

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CRS

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Pr o p e r t yd i r e c t

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Me t as i t e s

No r ma l l yweu s ep i ec h a r tt or e p r e s e n ts e g me n ta n dp e r c e nt a g ea s s o c i a t e dwi t hi ts owec a ns e ei t a sa me nd e ds o me h o ws owh a twewa n tt of o c u smo r eo nc e r t a i nc h a nn e l sa ndl e s so nc e r t a i n c ha n ne l sIfin dap i ec h a r t sa r ear e a l l ye a s ywa yt ot a k eal o o ka tt h a tt oma k eae v a l ua t i o no nt h e v o l u meo fb u s i n e s sf o rd o i n gf r o me a c hCh a nn e l .

Global distribution system (GDS): A group of companies that electronically connect travel-related businesses such as airlines and hotels with those individuals and companies seeking to buy from them Slides: computerized network sys that enables transactions between Tas ( travel sellers) and industry service providers- making decisions by comparing to others ( Mark added) – why? that's important is because if you are not effectively on the GDs so for example if your room types don't make sense obviously what the difference is and they have different room names lead to confusing and not make, so travel agency will not spending time on you so they're comparing you to others and choose which one better. three remaining GDS companies (Sabre 36%, Amadeus44%, and Travelport 20%)

GDSc har t

Flowcharts the top you've got the hotel property management system (PMS) and that of course communicates with the central reservation system (CRS) right and then you also have the various GDS like Amadeus; Galileo; sabre and Worldspan is examples and each one of those also communicates with CRS GDS switch that it has to pass through in order to get to the CRS and then once CRS in the hotel exchange information back and forth so that's how that works so there are a variety of fees involved commission in general unless it's a negotiated corporate that doesn't have a commission, you have a GDS fee and you have was called the pass through fee. GDS bookings tend not to be the cheapest because of paying a fair bit if there is a commission and pass through fee and they vary depending on the brand total see you somewhere in the neighbourhood of about $10 and then you may or may not have a commission However, GDS tend to be the higher-rated bookings you do have a lot of retail bookings that will come for GDS; travel agent booking for people who don't necessarily have a corporate rate and the corporations that are booked through DSS in many cases are not commissionable and they tend to be higher rated as well so corporate rates tend to be for the most part not as high as retail obviously but they tend to be kind of in line with better group rates and just under the race in terms of How High they are

OTAs – ONLINE TRAVEL AGENCY (3RD PARTY) Travel website that specialize in the sale of travel products including hotel rooms, flights car rental cruise …. And packages to consumers OTA Extranet permitted controlled access of a company intranet to authorized external users/ partners

BRAND.COM/ INDEPENDENT SITE/ CRS -

Direct booking ( call or website)

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Websites controlled/ managed by brand or independent hotels

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Lowest cost

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Consider CRS fee and level of expertise

Brand.com cost consideration: -

Electronic cost increasing -

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SEM – marketing for cus on differentiator to distinct your hotel to others by Google Ad words

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SEO, digital marketing, website maintenance

DIFFERENT CHANNEL- PROPERTY DIRECT -

Telephone : it is hard

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Email

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Front desk to deal with repeat guest and walk ins

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Group sales

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CVB leads

COMMODITIZATION Commoditization is the process by which consumers are driven more by price than features and attributes that distinguish brands Hotel which is considered is commodity is when customers probably don't have a preference or brand

META SEARCH- trivago

CHAPTER 7 INVENTORY AND PRICE MANAGEMENT -

Close out

Example : In this case, Shanna’s ability to better manage inventory, based primarily on her superior forecasting techniques, resulted in decision making that generated an improved RevPAR. Shanna did not change her room rates on this Saturday. She did, however, recognize that a DD made available at a discounted rate is a different room product from the same room offered at rack rate. Her success was the result of her decision to close out discounted DDs on this specific Saturday. SO Professional rooms inventory management requires that RMs know their guest rooms’ distinctive characteristics and that they match them to potential guests who value those same characteristics.( room size; location, bed configuration, package, location). Will affect price Concierge floor: An area (often an entire f oor) located within a hotel, access to which is limited only to those guests staying in rooms located within that restricted area. In most cases, specialized amenities and services are provided to guests staying on concierge floors. Also known as a concierge level or VIP level.( khu vuc dac biet khach vip) -

Room code: KP ( KP- king pool view, DDP - double double bed pool view, GKO- grand suite king bed ocean view) help hotel sales and front desk staffs clearly understand the

significant differences between the hotel’s various room types. But not too much to make confusing cumbersome and error prone. -

Room size or types ( big room, small room, whirlpool suites, parlor suites, bridal suites, or junior suites

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Bed configuration

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Package: honey moon, dinner for two, breakfast the following morning, creates a unique product for both accounting and room-selection purposes.

Guest classifying by market segment: - Transient : prearrival strategies: clearly communicating to potential buyers the availability of the hotel’s various room types and then accurately recording these guests’ purchases. Should be updated( called Real time) to avoid selling room not available or wrong room to wrong guests and wrong rates. Should have degree of connectivity( interfaced) between a hotel’s available rooms data and its channels of distribution greatly affect the prearrival revenue management strategies that can be employed. If not, it can caused error like double booking, incorrect guests information which upset guests

ONE-WAY connectivity pros and cons (p.217-218) TWO-WAY NO-WAY The best situation is that of a two-way communication model. In this arrangement, all of the inventory and rates are communicated, in real time, utilizing data in the property’s reservation management and availability system. When a reservation is made by any entity, that entity’s system actually checks with the CRS or PMS, to ensure room availability. - stay-pattern; fully yielable … (slide) - Group Hotel PMS can provide guest history, room reference, room rate, form of payment Managing group room inventory is challenging because normally the number of rooms they want to book in forecast not same in reality, change room, last minute request; challenging in room rate management - Special contract and negotiated - Overbooking, walk guest...