Escolar Documentos
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Cultura Documentos
OF CHOICE.
WHY HOTEL DISTRIBUTION
COSTS MATTER TO CORPORATES.
www.hrscorporate.com
CONTENTS
Introduction 3
Executive Summary 4
Distribution channels 8
HRS & the distribution chain
10
14
16
HRS solution 18
Conclusions 20
Acknowledgements & sources
3
2
22
INTRODUCTION.
Jon West
Managing Director
(London), HRS
EXECUTIVE SUMMARY.
2013
2014
Arrival of TripAdvisor
hotel availability check
www.distributionpartner.com
PEGASUS
ODD
BRAND /
S&DP
CRS
SWITCH
PEGASUS
GDS
TA IMPLANTS
(CORPORATE TAs AND TRAVEL DEPT.)
HOTEL
HOMEPAGE,
IBE
HOTEL DIRECT
SALES
RETAILER
(HRS, HOTEL.DE,
BOOKING.COM)
TO
HOTEL
TRAVELTAINMENT
(LEISURE)
BISTRO
ONLINE / OFFLINE TA
UNISTER
FLUEGE.DE,
AB-IN-DEM-URLAUB.DE
COMPANIES &
TRAVELLERS
EXECUTIVE SUMMARY.
DISTRIBUTION CHANNELS.
92% of
travellers
now check
online guest
reviews
before they
book
TripAdvisor
DIRECT CHANNELS
The most profitable sales channels for
hotels are the direct ones, where the
booking is made over the phone or via the
hotels own website. Google estimates that
just 20% of web traffic finds its way to
hotels branded sites (although the figure
is higher for budget brands), emphasising
the power of the online intermediaries.
The hotelier pays no commission for
direct bookings; there are cross-selling and
up-selling opportunities and the channel
is relatively easy to monitor. On the
other hand, the hotelier bears the cost
of the personnel, systems and website
development to convert and deliver the
booking not to mention the sales team
to source direct corporate contracts and
the marketing spend to generate website
traffic through pay-per-click and email
campaigns.
And with mobile set to become a major
distribution channel over the next two
years, hotels relying on direct bookings
will have to invest heavily to maintain
this decreasing revenue source and
competitive advantage.
TMCS/HBAS
GDS
Of the three major GDS providers, HRS supplies content to two - Amadeus and
Sabre as well as directly to both TMCs and OBTs. Corporate profiles in the HRS
system make booking in policy easier and enable corporates to access content/
profiles through each of these channels.
DISTRIBUTION CHANNELS.
in five
ofOne
all mobile
bookings
are now
made using
an iPad
Pegasus
OTAS
MOBILE
10
SOCIAL MEDIA
FIG. 2 TOP 5 HOTEL BRANDS BY SOCIAL MEDIA TRAFFIC (AS AT DECEMBER 2013)
Source: Skift/HVS
Brand
Twitter
followers
Facebook
likes
YouTube
views
Instagram
followers
Marriott International
280,380
176,653
410,005
5,332
Hilton
114,119
1,163,844
1,132,878
3,272
Four Seasons
96,157
206,089
1,656,537
25,991
90,299
33,825
124,380
Fairmont
23,366
114,716
87,788
16,040
In 20
13
17%
of all
intern
et
usage
world
w
came ide
vi
mobi a
le
Around
35%
otel
of all h el
v
and tra ffic
t
e ra
websit m the
ro
came f urce
o
e
sam s
11
HRS
customers
can book
online, with
no booking
fees, at
marketbeating
rates
MORE THAN
40,000
CORPORATES
OBT
TMC
CHAIN HOTELS
12
MORE THAN
80 million
VISITS A YEAR
CORPORATE
PORTALS
24/7 CALL
CENTRE
HRS.COM
MOBILE
APPS
300,000
AFFILIATE
PORTAL
GDSs
BUSINESS PARTNERS
SOCIAL
MEDIA
MORE THAN
8,000
INDEPENDENT HOTELS
TMC POSs
PMS /
CRS
BOOKING FEE:
> 10
SWITCH
COMPANY
GDS
TMC
7% TRANSACTION
FEE OR FIXED FEE
INCENTIVE
FIG. 5 LOST
PRODUCTIVITY ESTIMATES
Average annual salary
(inc. NI) for booker
32,335 inc. employee
& employer NI*
Cost to employer
per hour
19.60 (44 weeks at
37.5 hours per week
Cost to employer
per minute
0.33
Cost to employer
for booking via OTA
10.45
(32 minutes x 0.33)**
Cost to employer
for booking via HRS
0.98
(3 minutes x 0.33)***
(*) Monster 2013
(**) Source: Microsoft/ACTE
(***) Source: HRS
13
COST COMPARISON
BY CHANNEL.
14
Channel
Cost to corporate
(In addition to
100 room rate)
Phone call
to hotel
10 labour / systems
10
(10%)
Hotel
website
visit
2 labour / systems
8 - 10 digital
marketing (10:1 yield)
5 transaction fee to
website transaction
engine
15 - 17
(15% - 17%)
Hotel
website
accessed
via mobile
2 labour / systems
3 digital marketing
5 transaction fee to
website transaction
engine
10
(10%)
TMC/HBA
8% 10% commission
2 4 listing fees
5% 7.5% GDS fees
7% switch fees
2% - 4% override
2 labour / systems
26 - 34.50
(26% - 35%)
OTA
20 - 27
(20% - 27%)
HRS
corporate
portal
15% commission
(0 for bookings on
corporate negotiated
rates) 2 labour /
systems
9.50*
(9.5%)
offers
a HRS
lower
cost of
distribution
channel
than direct
bookings by
telephone
or hotel
website
15
CASE STUDY #1
The five-star Dukes Hotel in
Mayfair was voted the AAs
London Hotel of the Year in
2013/14 and is one of the worlds
leading classic boutique hotels.
Revenue Manager Olga Boiko estimates
that the overall cost of distribution
(commission, marketing, reservations and
sales) equates to 10% of gross sales per
annum. As expected, the cost to the hotel
of processing a booking varies according
to the channel used.
The overall
cost
of
distribution
equates to
10% of gross
sales per
annum
16
CASE STUDY #2
The Best Western Plus Seraphine
Hammersmith is a 58 room four
star hotel serving both business
and leisure customers in and
around West London.
The booking channels that generate both
the highest numbers of reservations and
highest Average Daily Rate are OTAs,
according to Group Revenue Manager Ravi
Ivaturi, although the commission rates
charged vary from 10 17%.
We would
definitely
pass on
the benefit
of lower
distribution
costs to the
corporate
17
HRS SOLUTION.
HRS
absorbs
commissions,
transaction,
digital
marketing
and other
fees that
account for
up to 40% of
the hoteliers
booking
revenue
90,000
90,000
PMS
CRS
SWITCH
TMC
GDS
TRAVELLER
CHAIN HOTELS
LEGACY
WORLD
PMS
CRS
SWITCH
TMC
GDS
TRAVELLER
CHAIN HOTELS
100,000
OBT
100,000
OBT
CHAIN HOTELS
NEW
WORLD
NEW
WORLD
150,000
CHAIN HOTELS
ONLINE
OFFLINE
MOBILE
TRAVELLER
150,000
ONLINE
OFFLINE
MOBILE
TRAVELLER
INDEPENDENT HOTELS
INDEPENDENT HOTELS
GDS
TMC
TMC
GDS
15% COMMISSION
ON HRS MARKET
RATES
(PAY FOR PERFORMANCE)
18
CONTENT QUALITY
19
CONCLUSIONS.
DIRECT
DEAL WITH
HOTEL
ONLINE
SEARCH
OTA, AFFILIATE,
SEARCH ENGINE
Hotel
Solutions
Provider
CHAIN HOTELS
20
HBA
OBT
HOTEL
BOOKING
AGENCY
ONLINE
BOOKING
TOOL
GDS
INDEPENDENT HOTELS
TMC
TRAVEL
MANAGEMENT
COMPANY
Changing distribution
channels
lowers costs and
allows hotel rates to be
reduced because of the
savings made as a result
21
ACKNOWLEDGEMENTS
& SOURCES
ACTE
Bain & Co.
Best Western Plus Seraphine
Hammersmith
Carlson Wagonlit Travel
Dukes Hotel
Google
GTMC
HRS
HVS
HSMAI Foundation
Microsoft
Monster
Pegasus
Skift.com
STR Global
TripAdvisor
22
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