Online vs Offline Distribution Strategies for Hotels
In order to set the context of the presentation, it is important to examine where the distribution strategy takes place in the global marketing strategy. According to Meidan and Lee (1982), four main stages constitute the global marketing strategy of hotels: identification of the target market and the needs of these customers; formulation of the marketing objectives; definition of the constraints (mainly linked to the environment of the hotel); and finally, allocation of marketing resources. This last stage can itself be divided in four components, following the Marketing Mix model of McCarthy (1960): product, place (also called distribution), promotion and price.
Before the internet and online technologies, the distribution channels were limited in the hotel industry. They could be separated into two categories: direct and indirect channels of distribution. Direct channel was the internal Sales team of the hotel. Salespeople were of vital importance when it came to “making contacts with companies, organisations and channel intermediaries, such as travel agents” (Meidan and Lee, 1982). Indirect channels of distribution include Tour Operators (travel agents), airlines and in centralized operations in the case of franchised or chains of hotels.
In these circumstances, what kind of distribution strategy can be put in place? The importance of intermediaries in creating value has been outlined by Dubέ and Renaghan (2000). Surveys amongst travel agents have shown that the expectations of these different actors differ. Second in the top ten hotel practices cited by these intermediaries stands the criteria “hotel has good sales representation”, while first is that the “hotel has up-to-date reservations computer”. This last argument might nowadays be seen as a required attribute, but in 2000 this was seen as an advantage to the hotel. Another example of distribution strategy is developing intermediaries’ loyalty, and the attributes leading to this loyalty differ
Before the internet and online technologies, the distribution channels were limited in the hotel industry. They could be separated into two categories: direct and indirect channels of distribution. Direct channel was the internal Sales team of the hotel. Salespeople were of vital importance when it came to “making contacts with companies, organisations and channel intermediaries, such as travel agents” (Meidan and Lee, 1982). Indirect channels of distribution include Tour Operators (travel agents), airlines and in centralized operations in the case of franchised or chains of hotels.
In these circumstances, what kind of distribution strategy can be put in place? The importance of intermediaries in creating value has been outlined by Dubέ and Renaghan (2000). Surveys amongst travel agents have shown that the expectations of these different actors differ. Second in the top ten hotel practices cited by these intermediaries stands the criteria “hotel has good sales representation”, while first is that the “hotel has up-to-date reservations computer”. This last argument might nowadays be seen as a required attribute, but in 2000 this was seen as an advantage to the hotel. Another example of distribution strategy is developing intermediaries’ loyalty, and the attributes leading to this loyalty differ