The 5 Key Metrics Every Hotel Distributor Must Have to Stay Ahead of the Game
For most hoteliers and intermediaries, hotel distribution is complex with a proliferation of connections to different channels. A veritable spider’s web, where relevance and contribution of individual channels can be unclear. Receiving travel requests and responding to them is technology intensive and speed and uptime are revenue impacting ingredients. Fresh opportunities can often be overlooked - often without even realising it. To manage this situation it’s important to monitor the different distribution channels, and their relative performance. Knowing which key performance indicators are important is half the battle in understanding where focus and resources should be applied to optimise operations and take advantage of opportunities. If channels are not delivering the bookings for one reason or another – early warnings should be heeded to avoid sleeping at the wheel, or worse crashing out altogether. This is a view expressed by Matthew Goulden, MD at Triometric, a company that specialises in performance monitoring and intelligence for anyone engaged in online travel using XML data.
This article looks at the role of hotel distributors such as wholesalers, aggregators and bedbanks and introduces the 5 data points that these enterprises should be using to successfully compete in this crowded market place. These data sets are derived from monitoring search and booking flows and analysing the XML content to be able to:
- Identify and plug revenue gaps,
- Uncover new opportunities and
- Unblock operational performance issues before they become a problem
These are just some of the benefits and insights to be gained from taking a deeper look at your XML data exchange.
Intermediaries are renowned for their vast sales networks and industry relationships. Hotels, in spite of their desire to grow direct sales, often remain dependent on them to sell rooms quickly and reliably. So hotel distributors play a pivotal role in linking accommodation supply to demand, especially with regards to diverse travel agents or niche tour operators. The distributor is focused on getting the right inventory deals from the supply side for the right prices and sell them on to their clients for the best prices achievable.
To be successful requires solid relationships with the hotels (so the right deals can be contracted) and a robust system architecture capable of handling heavy search and response traffic, largely using standard XML formatted data. Direct connects in the shape of APIs between suppliers, intermediaries and customers provides the plumbing for millions of messages flowing between providers and consumers. Beneficiaries are largely travel agents, metasearch engines, tour operators and even other wholesalers. APIs streamline the many to many connections that exist today. It means inventory and reservation systems can be linked up enabling real-time inventory management and instantaneous booking confirmations.
With online travel and Look-to-Book ratios still growing, enormous system and network capacity is required. Distributors such as wholesalers and bedbanks have these assets in abundance, but to keep on top of competition – they need to manage the performance of each of the supply chain links within their control. The necessary decision making needs data translated into insights. And of course the costs associated with distribution also play a role since not all channels are equal when it comes to delivering returns. Choosing the right mix of channels capable of yielding sustainable profit streams is a critical balancing act.
The complex task of hotel distribution brings with it three critical operational demands:
- Monitoring the infrastructure (connectivity, capacity, responsiveness)
- Managing the supply (inventory, availability, rates)
- Measuring channel contribution (relevance, margins)
So what does the hotel distributor need to effectively optimise his operations to be competitive? Having good systems and processes in place is just part of the answer. But having an eye on these 5 critical data sets is also essential when managing daily distribution challenges:
- Timeouts – how and why they occur and their financial impact
- Response Times – measuring and manging responsiveness to opportunities
- Inventory– managing what's available against market demand
- Margins – understanding impact of cost and prices on profit
- Search metrics – using search metrics to measure channel value
These five key insights are based on the raw data that is part of every distribution operation. So it's not a question of the data not being available but a case of harnessing it for best use. This is where a platform that not only measures operational performance but is also capable of extracting wide ranging intelligence from XML messages is an important competitive differentiator.
Being successful in online travel is all about measuring and understanding distribution performance in real time. These five data sets can help distributors get the optimal channel mix in an optimised operational environment. Without this insight, distributors will continue to fall short of their potential and sadly remain unaware of the cost of these missed opportunities.
To read more about each of the data points together with concrete examples download our white paper: “5 Key Metrics Hotel Distributors Need”.
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