Travel agencies that want to remain relevant in a hotel distribution plan must sharpen their source market understanding and engagement abilities.
Travel agencies may have to enhance their market expertise and engagement as hotels look to funnel more consumers towards direct booking channels, potentially widening the gap in the hotel-agent relationship.
Speaking at the Hotel Revenue Distribution Summit in Singapore earlier this year, hospitality players expressed greater confidence in increasing direct bookings and reducing their reliance on OTAs, whose rapid expansion in the past decade have dominated the booking process. Hotels are now balancing their OTA partnerships with reinvestments into other distribution channels.
This forewarns that hoteliers may also re-examine the place of traditional travel agencies in their distribution strategies.
Ludovic Cacciapaglia, assistant vice president global distribution, Shangri-La Hotels and Resorts, said: “If we want to work with other channels like TMCs, we must ask how can they help us better reach our target market and how can they impact my hotel.”
The ability to effectively engage and capture target markets is the linchpin agencies need to keep the hotel-agent relationship intact.
Cacciapaglia noted that hotels have the option of many other distribution channels, and to determine which ones are a good fit, hoteliers must understand their target geographical source markets.
“For example, it is important to know the booking window of a market, and their different lead times and touchpoints,” he said.
Such market expertise is critical but uncommon in the hospitality sphere, even with a wealth of data available. For instance, Brett Henry, president director, MG Group, raised the example of millennials, which have become a generalised target segment that in actuality exhibit distinct preferences across different geographical markets.
He said: “The concept of millennials is at a level too high to target for real results. (Hotels) need to be more tactical and have their ears to the ground; they need to be much more focused and targeted to a specific group.”
The next avenue that hotels may be turning their eye to are “bigger players that are making moves on bed banks and tour operators,” opined Cacciapaglia.