NASHVILLE, Tennessee — With the continued advancement of artificial intelligence and new booking channels emerging, hoteliers should be keen on evolving their distribution strategy to meet travelers where they are.
It comes down to knowing your hotel and the guests you're hoping to attract, said Lynsey Kreitzer, executive vice president of commercial strategy at Lark Hospitality.
"I think understanding the channel that is most profitable and beneficial to your hotel during a specific time frame is really important, and not just casting the net and hoping that all the fish go into it — being very deliberate in the channels that you are actually pushing in," she said on a panel at the recent Hotel Data Conference.
Of course, deducing which channels hoteliers should prioritize requires having the right data and knowing how to use it accurately. With tech systems that have been cobbled together over the years, that's a bigger challenge than it should be, said Linda Gulrajani, vice president of revenue strategy and distribution at Marcus Hotels & Resorts.
"We don't have a great database to be able to look at what channels are actually producing, to look at lifetime value of those customers, who those customers are," she said. "I think some of this is just creating the tech stack to be able to actually measure the distribution performance."
Unfortunately, the situation will only get worse as channel volume grows.
"I don't think channels are going away. I think we're going to see more," Gulrajani said.
AI's role and rate disparity
Even if hoteliers feel confident about how they prioritize their channels and the data insights they are using to do so, the wrench in the plan is AI and potential new booking channels. The panelists mentioned upcoming moves from TikTok and Reddit.
While social media and AI both are currently mostly used for trip planning rather than booking, that won't always be the case. Agentic travel booking is definitely on the horizon, said Philip Barton, head of product strategy and innovation at IBS Software.
"I think there is a sort of general drive that everybody wants to add more channels, and somehow that will add more revenue. But that isn't necessarily the case really anymore," he said. "It's a case of how do we fold in that additional AI channel."
For now, Gulrajani said her biggest concern is AI platforms distributing a lower rate than what a hotel's pricing strategy calls for.
"I think as AI continues to evolve and drive our distribution, it's going to make things really ugly, and we're going to have a lot more rate leakage — or whatever the buzzword is around that — if we don't get control of all of those resellers of our rates, and some of them are faulty," she said.
Gulrajani and Kreitzer agreed that having strong relationships with online travel agency partners is critical to acting quickly when the wrong rates are listed online. Hoteliers should also make sure internal rate distribution is streamlined, and corporate and in-the-field teams are on the same page, Gulrajani added.
"I'm really nervous that it's going to just hold the low rates, and that it's going to find the rate leakers, and that it's going to cause our rates to decline," she said.
While technology might be exacerbating the problem, it's not necessarily the solution, Barton admitted even as a tech provider himself.
Rate disparity "is a really a systemic issue rather than a technology issue," he said. "At the moment, we're trying to present the same offer rigorously down every channel and maintain it across there. Maybe the solution ultimately is to repackage that and make sure we're presenting different offers down different channels."
On the other hand, AI is changing internal systems and hoteliers can use it to their advantage.
"I don't think we always have to be afraid of what AI is doing," Kreitzer said. "You know, is it a little scary on the distribution side? Sure, but on the flip side, within our distribution channels, it's making some really good recommendations for our leaders so that they can be more macro and strategic and put a lot of different processes in place."
However, hoteliers need to put the right policies in place to prepare for it now since tech advancement is happening fast, Barton said.
Silos and shifting ownership of distribution
The other challenge to hoteliers' distribution strategy is internal organization, and that comes from teams operating independently, Kreitzer said.
"If you have your sales, your marketing, your revenue management, all working in separate silos, we're not seeing the grand scheme of things, and we're not selling every component of our hotel. ... So if that strategy isn't in place, all of a sudden we're on our heels, and we do have to depend on more distribution channels," she said.
But one team in particular needs to have ownership of distribution strategy, Kreitzer said.
"I do think it's a commercial aspect, and the reason is that you really do need to understand the hotel to have distribution work for you," she said. "So it's not going to be the same across every single hotel. Two hotels could be sitting next door to each other, and it's not going to be the same."
A solution to the silos problem is sharing information and data with all teams — but also making sure everyone with access to the data understands how to use it.
"The biggest thing is making sure that our teams understand the data, even if it's not all in one place — how are we collecting it, and then how are we using it moving forward, so that we can be truly successful," she said.