Tales of Distribution Channel Mismanagement

By Cihan Cobanoglu | August 10, 2009

The catch phrase that hotels once embraced when it came to attracting potential guests used to be "location, location, location." Now, however, hoteliers are quickly learning that it is about "location, distribution and differentiation." Of course, in all of these "it-words" technology plays a very important role. Distribution technology enables hoteliers to advertise to the world that they exist and are ready to welcome travelers with a plethora of services and amenities. In-room and other technologies create differentiation which then directly impacts a guest's decision to return. Yet for all of the power that technologies can hold in the booking and decision making process, hoteliers need to be prepared for system failure.

A case in point
When a specific technology fails, which it can and probably will at some point, are you going to be ready? Take this real-world example: A friend of mine, "Joe," recently found a great rate on a resort hotel's website for a given date. Surprised at the low rate, Joe called the hotel directly to confirm the rate and was told that the hotel reveals good deals on its website. He booked the room for four nights, printed the confirmation, and gave it to the front desk clerk upon check-in.

For the first two days of his stay, Joe didn't encounter any problems with his stay. On the third day of his stay, he received a call from the front desk manager informing him that the rate for his room for the subsequent two nights would be triple what he originally paid. The front desk manager explained that there was a problem with the resort's website and that the rate he received at the time of booking was a mistake. Joe told the front desk manager that he would not pay the extra charges to continue his stay, and insisted that the hotel honor the rate that was given on its website.

In response, the front desk manager explained that when Joe booked the room, he agreed to a number of conditions, one of which indicates that the hotel is not responsible for rate errors posted on its site, and reserves the right to charge or refund the difference in a published rate. As a final word, the front desk manager told Joe that he would either have to pay the difference or else leave the hotel, even threatening to call security.

When the incident eventually reached the general manager level, Joe was told that the hotel would honor the published rate. By this time, however, Joe and his family had already checked out of the property with the resolution that they would never return.

Distribution maintenance is key
In this age of technology and Internet distribution, this story is hard to believe, but it is a reality. Hotels must ensure that the systems they employ are working properly and are maintained by professionals. In this age of social networking tools, one unhappy customer will not tell just nine people about a negative experience; he or she will broadcast the experience to hundreds, thousands or even more. In the event that technology fails, hoteliers must recognize that failure and make sure that their guests are not the ones who suffer.

Finally, hotel distribution channels are now more complex than ever, bringing even greater responsibility to manage them properly and effectively. Many hotels now have a revenue manager on staff who oversees these channels on a daily basis. This is a great step to ensuring rate parity among distribution channels and will, in turn, increase brand integrity and loyalty in the end.

I invite all of the readers of this column to please share your distribution challenges with me. I would love to hear about your experiences.

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