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“ The New Normal for Distribution Channel Management”

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  1. “The New Normal for Distribution Channel Management”

  2. Our expert panel • Carrie Campbell, Director of Lodging, D.K. Shifflet & Associates • Richard Chambers, President, TravelCLICKinteractive • Bill Peters, Vice President of Reservations, Outrigger Hotels & Resorts • Jim Young, Senior Vice President, Global Distribution, InterContinental Hotels & Resorts

  3. Today’s agenda • Quick overview of the new landscape • Recent findings of consumers trends in online arena • Expert panel to comment on those trends • Summary of recommendations for channel management • Q&A from you

  4. Background • Continuing Internet growth and influence • Economy recovering • Intermediaries consolidating/evolving • Chains taking action • . . . challenges remain!

  5. Internet Hotel – U.S. Growth & Share Mix Hotel Revenue ’03‘04 13% 20%

  6. The Internet – U.S. Growth & Consolidation

  7. Consumer Use of the Internet Half of online travelers look online but book offline. Source: PhoCusWright,2003 Online Traveler Survey

  8. The Economy • An improving economy is a necessary condition for hospitality financial improvement: • Improves occupancy • Provides negotiation leverage • Sets the stage for raising ADR

  9. Hospitality Forecast Total US Occupancy Percent Source: Smith Travel Research

  10. Declining Travel Agent Role Agency Revenue ($b)

  11. GDS Changing Roles Conglomerate Component vs. Distribution Core

  12. Mega Players in the Game InterActiveCorp Expedia HRN (Hotels.com) Travelscape Hotwire TripAdvisor Ticketmaster Vacation spot.com Interval International Lending Tree Match.com WizCom Trust Galileo Cheap Tickets.com Trip.com RCI Hotels Avis/Budget Rezoultions/Anasazi Thisco Utell ASP-PMS TravelWEb.com

  13. Biggest Player you may have never heard ofLiberty Media Corporation • 20% of InterActiveCorp • 4% AOL Time Warner • 3% Cendant Corporation • 55% On Command • 100% Starz • 42% QVC • 50% Discovery Communications (Travel Channel included here) • 29% Sky Sports 1,2,3 • 56% DMX Music • 30% the Wireless Group • 89% True Position, Inc

  14. The Major Sites 3 Hotel Companies 20.13 B Top 3 “3rd Parties” 28.21 B Prices as of noon April 2, 2004

  15. Chain Response • Chain distribution focus: • Web site • Direct connect • Best rate guarantee • Portal strategy • Intermediary negotiations • Property level support: • Strategy – Pricing & Distribution • Systems

  16. Key Issues Intense competition for . . . • Guest eye share • Guest allegiance & market share • Price and inventory control Creates opportunities for resorts!

  17. “The New Normal for Distribution Channel Management”Carrie CampbellLodging Group DirectorD.K. Shifflet & Associates, Ltd.

  18. The New Normal: (Overview) • We all know distribution has changed • Room Night/Revenue Share • Who Using the Internet? • How Do We Rate?

  19. We All Know Distribution Has Changed: Hotels Resorts D.K. Shifflet & Assoc. Ltd. (Total Room Nights)

  20. Share of Nights ≠ Share of Revenue Hotels D.K. Shifflet & Assoc. Ltd.

  21. Share of Nights ≠ Share of Revenue Resorts D.K. Shifflet & Assoc. Ltd.

  22. Bargain Hunting #1 Use of Internet D.K. Shifflet & Assoc. Ltd.

  23. Who Are These People? D.K. Shifflet & Assoc. Ltd.

  24. And Why Should I Care About Them? D.K. Shifflet & Assoc. Ltd.

  25. Guests Are Getting What They Pay For… D.K. Shifflet & Assoc. Ltd.

  26. Summary • Most Internet room nights at expense of higher ADR channels • Guests Through Your Website • Travel More • Stay Longer • Spend More • Not all guest experiences are equal • In the long run, that will hurt you D.K. Shifflet & Assoc. Ltd.

  27. Our expert panel • Carrie Campbell, Director of Lodging, D.K. Shifflet & Associates • Richard Chambers, President, TravelCLICKinteractive • Bill Peters, Vice President of Reservations, Outrigger Hotels & Resorts • Jim Young, Senior Vice President, Global Distribution, InterContinental Hotels & Resorts

  28. Wrap up:Best Practices for Local Internet Marketing

  29. Topics • Functional Website Design • Search Marketing • Reservations Processing

  30. Place the booking engine on the home page • Conversion rates increase dramatically with less ‘click-throughs’.

  31. Email Capture on Home Page • Like the booking engine, acquiring e-mail addresses for future re-marketing is easier with less clicks

  32. Instill Confidence on the Site • Best Value or Best rate clear in the copy • Keep the online consumer at your site rather than clicking to another site

  33. Search Marketing • Bringing customers to your site • Need to have both organic and pay per click to optimize marketing plans

  34. Search Marketing • Market your resort by business unit • Horizontal Marketing Approach

  35. Horizontal Strategy www.hotel.com www.rest.com www.meetings.com www.golf.com www.spa.com Accommodations Restaurants Meetings Golf Spa

  36. Reservations Processing • Conversion rates are higher with less clicks

  37. Traditional Booking Engine

  38. Summary • Build Best Practices on the site • Less clicks means more business • Best Marketing Practices • Search Engines • Market by business unit