The 8 most common distribution management mistakes

Mar 26, 2020Revenue Management

Effective hotel revenue management is all about using its full potential. This requires not only using the properly synchronized software and keeping an eye on competitor offers, but also maintaining best possible relationship with guests and making regular evaluations of sales channels being in use and adjusting their pricing strategy to current state of the market.

If you want to manage booking in your hotel successfully you should remember about avoiding 8 common mistakes described below.

1) Lack of proper software synchronization
Having the proper software in place is today more than crucial. Without using new technology and omnichannel distribution strategy you won’t be able to use the potential of your object to its limit. Remember, though, that all the software you use should be properly connected and synchronized. Lack of channel manager, channel manager not connected to PMS (Property Management System) or booking engine not supported by your technology providers – all that mistakes will cause you lots of problems and make the effective distribution management much more difficult, onerous, time consuming and prone to errors.

2) No structured approach to price lists extension
Booking in advance is still a pattern for a group of foreseeing travelers, so you shouldn’t forget about putting in place not only pricing strategy, but also organized approach for price lists extension. Giving your clients a chance to book a room only for next 2 or 3 months deprives you of a significant portion of potential revenue. In all OTAs you work with prices should be available for at least next 12 months.

3) Improper restriction management
If it comes to managing OTAs you should also learn how to properly work with restrictions. You can set restrictions on a general level in any OTA you work with or apply them on a daily level using your channel manager – usually a good channel manager gives you much more options and takes your restriction management to a higher level. So where is the risk here for your hotel? In general using restrictions may improve revenue of your hotel, but there is one condition – you have to use them wisely. Improper restrictions management leads to a situation when your property is available to book in OTAs only during certain periods making your property less visible to potential bookers. You need to learn how to use minimum / maximum stay restrictions, when to close particular OTA and how effectively use CTA (Closed to Arrival) and CTD (Closed to Departure) restrictions, otherwise your object may become unbookable on too many days what in return will reflect on your revenues.

4) Overwriting data in OTAs manually
Thanks to investing in technology and creating powerful and perfectly synchronized software infrastructure you can now automate huge part of reception duties. This results not only in significant savings for your hotel, but also better and more efficient booking management. Once you connected all channels to your channel manager, remember to avoid overwriting data in OTAs manually. Why is this so crucial? Any manual input reduces data consistency which in consequence can lead to lower sales or in extreme cases even no sales.

5) Opening all dates for booking without revenue management analysis
Hotel revenue management is all about optimization and understanding how the supply and demand forces work. The common mistake here is to open all dates for booking without prior revenue management analysis. This mistake may result in selling off the most attractive dates too quickly, what in other words means you will lose a chance to optimize revenues for your hotel for the most profitable periods during the year. If you earn mainly during the high season and your hotel occupancy remains low during the remaining months, you should be particularly careful in this regard – possible mistake is yours “to be or not to be” in the business.

6) Group reservations mismanagement
Do you have a lot of group reservations? Admittedly they are not always highly profitable, but thanks to them you can quickly raise your occupancy rate. On the other hand in case of late cancellation your potential loss can be significant, thus remember to have a precise procedure how to deal with group bookings, secure payments and negotiate sufficient cancellation deadlines. Because of improper management of group reservations many hotels are not using the full potential other channels and revenue sources. Nowadays you can even use software to assess revenue from group bookings and help you with group bookings pricing.

7) Lack of yearly OTA performance review
Already having technology in place, OTAs mix added to your channel manager, but your revenue still stays at the same level? Instead of adding another bunch of OTAs try to reach current channels fullest potential first. Start with an audit and figure out what is the performance of each channel and what are the barriers to earn even more revenue there. Locked accounts, outdated contracts or low quality content – all these issues are potentially decreasing the number of bookings in your hotel. Keep in mind that quality matters . It is better to invest your time in boosting already performing channels first and then move on to market research and look for new potential sources of revenue.

8) Strict approach to overbooking can end up with lower revenue
Dealing with overbooking is always a challenge, but proper overbooking strategy may help you generate more revenue. Dive into statistics, learn your cancellation ratio and get to know your customers behaviour patterns. All this will help you in building overbooking strategy that will work for you. Secure strong relationships with neighbouring hotels in case you need to find alternative accommodation from time to time for your customers. Not only overbooking strategy that matters but also detailed procedures securing guests comfort when there is no room left. The common mistake here might be putting too much focus on avoiding overbooking which results in closing distribution too quickly and losing many potential bookings.


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