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BUILDING A DIVERSIFIED
HOTEL DISTRIBUTION
STRATEGY IN THE ERA
OF COVID-19
DECEMBER 2020
Presented by
+
BUILDING A DIVERSIFIED HOTEL DISTRIBUTION STRATEGY IN THE ERA OF COVID-19 INSIGHTS DECK | DECEMBER 2020 2
BUILDING A DIVERSIFIED HOTEL DISTRIBUTION STRATEGY IN THE ERA OF COVID-19 INSIGHTS DECK | DECEMBER 2020 3
EXECUTIVE LETTER
Diversify hotel distribution to master the evolution of guest experience in
the era of Covid-19
For the hospitality industry, historical norms and patterns pre-Covid-19 are no longer valid as predictors
in the new world. New patterns are also emerging in the recovery that are unrecognizable, and the
data we are seeing today isn’t telling us much about tomorrow either. Serving more than 42,000
properties around the world, Sabre Hospitality Solutions helps hoteliers rethink their business and focus
on next-generation technologies to implement a holistic buying experience that delivers distinct and
dependable guest experiences.
We understand the complexities of the market today and the challenges that hotel brands face, as well
as the upended rules of hotel distribution. We know that hoteliers are working constantly to allocate
limited resources in support of core business strategies, such as channel optimization. Considering Frank Trampert
SVP & Global Managing
changes in traveler behavior, hoteliers need to increase demand for hotels' services again. They also face
Director, Commercial,
a difficult choice between securing short-term revenue and cash flow versus longer-term profitability Sabre Hospitality Solutions
and branding.
Paradigm shifts within the industry are driving new imperatives for hoteliers, and navigating them
successfully starts with a diversified distribution strategy. That means hotels must be present in all travel booking channels and consider the
emergence of new customer types, while stimulating demand in a smart, flexible, and even creative way.
Hoteliers must master distribution in the era of Covid-19. Having a partner that deeply understands distribution makes a world of difference.
At Sabre, we are that partner -- distribution is at our core. We believe that an intelligent retailing approach is key to mastering and improving
the evolution of the guest experience. Armed with guest data, unique physical spaces, and a local perspective, hotels are in a prime position
to open up many new revenue streams, increase loyalty and trust, and appeal to a wider segment of guests. Sabre can help with that:
building resilience in times of recession and increasing performance in periods of growth.
BUILDING A DIVERSIFIED HOTEL DISTRIBUTION STRATEGY IN THE ERA OF COVID-19 INSIGHTS DECK | DECEMBER 2020 4
TABLE OF CONTENTS
ABOUT SKIFT
15 Part Two: Understanding the 2020 Hotel Consumer Visit skiftx.com to learn more or email at skiftx@skift.com.
21 Part Three: Defining the New Rules of Distribution in 2020 ABOUT SABRE CORPORATION
INTRODUCTION
1.
THE STATE OF
HOTEL DEMAND
BUILDING A DIVERSIFIED HOTEL DISTRIBUTION STRATEGY IN THE ERA OF COVID-19 INSIGHTS DECK | DECEMBER 2020 7
2.
As travel came to an abrupt halt
globally, OTAs saw the steepest
decline in bookings compared
to GDS and booking engine
channels
3.
Leisure travel takes priority
over corporate travel in the
short term. Booking engine
channel shows faster recovery
while GDS bookings show the
slowest recovery
Source: Sabre Hospitality, 2020
BUILDING A DIVERSIFIED HOTEL DISTRIBUTION STRATEGY IN THE ERA OF COVID-19 INSIGHTS DECK | DECEMBER 2020 8
US Forecast
Key Performance Indicators
(% Change vs. Prior Year)
Outlook
2019-2020F-2021F
Metric 2019 Actual 2020 Forecast 2021 Forecast
Source: STR
BUILDING A DIVERSIFIED HOTEL DISTRIBUTION STRATEGY IN THE ERA OF COVID-19 INSIGHTS DECK | DECEMBER 2020 9
GDSs 40-50%
GDSs 50-60%
GDSs 30-40%
GDSs 40-50%
1.
Change VS 2019, %
Epidemiological realities of
90 Scenario 1 +2%
the virus (immunity/vaccine
80 and mortality/cure)
70 Scenario 2 -20%
2.
60
50 Government policy
40
developments (restrictions
on movement and social
30
interaction)
20
3.
10
Source: McKinsey, Hospitality and Covid-19: How Long Until No Vacancy for US Hotels?
BUILDING A DIVERSIFIED HOTEL DISTRIBUTION STRATEGY IN THE ERA OF COVID-19 INSIGHTS DECK | DECEMBER 2020 14
2.
UNDERSTANDING
THE 2020 HOTEL GUEST
BUILDING A DIVERSIFIED HOTEL DISTRIBUTION STRATEGY IN THE ERA OF COVID-19 INSIGHTS DECK | DECEMBER 2020 16
Countering Traveler Interest in Short Term Rentals: How Should Hotels Adapt?
Interest in short term rentals appears to have increased in 2020, but the reasons for the interest remain unclear. Is it simply
perceptions related to social distancing? Hotels may be able to counteract this perception by promoting amenities like
contactless services, hygiene protocols, and convenience factors.
Source: https://www.usatoday.com/story/travel/hotels/2020/08/26/airbnb-vrbo-more-popular-than-hotels-during-covid-19-pandemic/5607312002/
BUILDING A DIVERSIFIED HOTEL DISTRIBUTION STRATEGY IN THE ERA OF COVID-19 INSIGHTS DECK | DECEMBER 2020 18
20%
Starting in March, there was a significant
15% spike in the 0 to 1 day average booking
10%
window bucket, along with a drop within
the 2-7 and 8-30 day booking windows
5%
Source: Koddi
BUILDING A DIVERSIFIED HOTEL DISTRIBUTION STRATEGY IN THE ERA OF COVID-19 INSIGHTS DECK | DECEMBER 2020 19
3.
DEFINING THE
NEW RULES OF
DISTRIBUTION
BUILDING A DIVERSIFIED HOTEL DISTRIBUTION STRATEGY IN THE ERA OF COVID-19 INSIGHTS DECK | DECEMBER 2020 22
What changes, if any, are you considering to your company’s booking and distribution strategy?
Hotel Executives
No plans to Considering this change Already made/making
change in the future this change
51%
Corporate
Contracted
50%
Third Party
(Non Restricted)
39%
Direct
(Non Restricted)
1. Direct booking becomes
even more critical
Source: otainsight.com
BUILDING A DIVERSIFIED HOTEL DISTRIBUTION STRATEGY IN THE ERA OF COVID-19 INSIGHTS DECK | DECEMBER 2020 27
4.
TIPS TO BUILD A
DIVERSIFIED
DISTRIBUTION
STRATEGY
BUILDING A DIVERSIFIED HOTEL DISTRIBUTION STRATEGY IN THE ERA OF COVID-19 INSIGHTS DECK | DECEMBER 2020 32
CHALLENGE
As they look for ways to boost bookings and conversions in Covid-19 locations post-
lockdown, many hotels have struggled to decide on the optimal distribution channels to
choose to maximize the effectiveness of promotional efforts
13%
increase in campaign
A 5-star city hotel brand with locations in France, Italy, the U.K. and the U.S. needed conversions
assistance deciding where it should focus its limited advertising spend to help drive
these post-lockdown bookings
SOLUTION
The hotel brand partnered with Sabre's Digital Experience (DX) team to help optimize their
metasearch campaigns between June - September 2020
The Sabre DX team's optimizations, combined with returning consumer demand, lead to a
119%
increase in bookings for
13 percent increase in campaign conversions and a 119 percent overall increase in bookings
Jun-Sept 2020
BUILDING A DIVERSIFIED HOTEL DISTRIBUTION STRATEGY IN THE ERA OF COVID-19 INSIGHTS DECK | DECEMBER 2020 34
CHALLENGE
Many hotels don’t always have a complete picture of their guests, preventing them
from knowing how to target them with advertising and drive more bookings
SOLUTION
Alila Hotels and Resorts faced a similar situation several years ago. The brand partnered
with Sabre to implement a new targeted, user-based advertising system built on the
82%
increase in website
SynXis platform. The new system created a centralized location for guest data and
enabled dynamic content for digital ads
revenue
BUILDING A DIVERSIFIED HOTEL DISTRIBUTION STRATEGY IN THE ERA OF COVID-19 INSIGHTS DECK | DECEMBER 2020 35
CHALLENGE
2020 has stretched hotel resources like never before. With many properties operating
with fewer staff and smaller budgets, they face tough decisions about how to continue
promoting themselves to potential guests
3x
increase in average
One hotel facing this challenge is a 5-star property located in the Irish countryside, which monthly bookings
was trying to decide on how to restart its Google Paid Search campaigns in June 2020
SOLUTION
The property partnered with Sabre to help optimize its spending strategy for Google Paid
Search, resulting in a significant improvement for the same dollar value investment used
prior to the pandemic
373%
increase in bookings
Average monthly bookings were up by a factor of three compared to February 2020. The
optimized campaign also resulted in a 373 percent increase in booking revenue when
revenue for Q3 2020 vs. Q1
comparing Q3 with Q1 2020
BUILDING A DIVERSIFIED HOTEL DISTRIBUTION STRATEGY IN THE ERA OF COVID-19 INSIGHTS DECK | DECEMBER 2020 36
CHALLENGE
Many hotels have found that in 2020 the hotel brand.com booking channel has been one
of the best performing booking channels
Independent brands like New Victorian, even as recently as 2018, were facing increasing
competition from larger chains, who often have access to more sophisticated website
booking tools and may be quicker to lower rates in response to market demand
SOLUTION
The New Victorian Hotel Group partnered with Sabre to upgrade to the SynXis Booking
Engine several years ago, offering a more flexible, scalable, cloud-based booking solution
to further optimize their website booking experience 37%
The new strategy helped the hotel group increase its year-over-year direct bookings by YoY increase in
nearly 40 percent alongside lower bounce rates and increased conversions direct bookings
BUILDING A DIVERSIFIED HOTEL DISTRIBUTION STRATEGY IN THE ERA OF COVID-19 INSIGHTS DECK | DECEMBER 2020 37
Through daily news, research, podcasts, and Skift Global Forum conferences, Skift deciphers
and defines the trends that matter to the marketers, strategists, and technologists shaping the
industry.
SkiftX is Skift’s in-house content marketing studio, working collaboratively with partners like
Mastercard, Hyatt, Adobe, Lyft, and many more on custom projects to engage the world’s largest
audience of travel influencers and decision makers.
Carolyn Kremins
President, Skift
ck@skift.com
212-564-5830