Why hoteliers need to adopt a lean distribution model?

As a hotelier you’re constantly faced with the challenge of implementing a distribution strategy that is responsive to customer demands at all points in time.

The solution may be in adopting a lean model of distribution.

What is lean distribution?
Lean is a simple process of aligning your distribution efforts with what the customer values and is willing to pay for. Any activity that does not add value to your customer hampers your profitability and hence, needs to be done away with. The key to achieve a lean distribution model is to plug the gap in customer demand and response time. This can be achieved by investing in a real-time intelligent distribution platform that delivers a seamless connection between your hotel’s PMS and all leading demand generators, and is backed by data-driven insights for agile and accurate decision-making.

How can hoteliers adopt a lean distribution strategy?

Discoverability
Online bookings count for a large share of the hotel’s revenue. To capitalise on it, hoteliers need to adopt an intelligent distribution system that not only ensures hotel inventory is being displayed across the right channels at all times, but also establishes a real-time connect that helps automate the reservation process and reduces staff-time spent on manual entry of such bookings. This means your staff can engage in customer relationship building and cater to customer demands better rather than manually entering reservations on the PMS. With advanced distribution technology, reservation managers can sell up to the last available inventory to maximise their revenue opportunity.

Implement an intelligent distribution-mix
The greater control you have over your distribution process, the better are your chances for higher revenue generation. Your distribution strategy should be a careful mix of real-time distribution and allocation model. While the former ensures 24×7 visibility of inventory and automated booking processes till the last available inventory, the latter gives you the freedom to allocate inventory manually based on channel performance and commission rates giving you a much better control over your yield.

Focus on driving direct bookings
A very effective revenue generation channel can be your own website. One way to adopt a lean model is to make the most of your own website. Implementing a responsive design, interactive navigation, integrating customer reviews at the point of decision making, and including a secured booking engine will increase your chances of direct bookings. Your website can also be a vehicle to run promotional offers for preferred customer groups ensuring customer loyalty. It is a great point to cross-sell your services too, through a complete e-commerce environment where consumers can combine multiple services – from room type to spa to food and beverages – into a single transaction.

lean distributionLeverage technology to stay connected with your customers
Today’s consumer is a dynamic, tech savvy group who value the look and feel of a hotel more than the price. This group is heavily dependent on their social circles and need to stay connected. A lean model of distribution will also mean to connect with customers across all platforms – from OTAs to direct booking engines to social media platforms. Mobile technology is on the rise which should be built into your distribution technology for more operational efficiency. A booking engine integrated mobile app is crucial for any hotel. Along with it mobile technology should be leveraged to offer a more engaging brand experience to customers during their stay – for instance mobile apps can be used as access cards to rooms, or for room service.

Proactively identify and meet customer preferences
At the core of lean distribution is information on consumer behaviour pattern. The goal of a lean model is to identify the hotel’s distribution strategy with customer preference. This makes it important for hoteliers to be able to forecast consumer behaviour based on past records. With access to data-driven insights, revenue managers can not only predict consumer trends but also implement it to modify and align operational activities and proactively meet consumer demands.

Intelligent business analytics can be crucial for lean distribution as it helps resolve operational challenges through drill-down of each business segment such as occupancy trends by day, month, year or performance by channels and more.

Thinking lean is not a concept anymore – but a critical strategy that will help hotels to be prepared for the changing market conditions ahead of time, and ride on market opportunities.