September 11, 2013

Direct versus indirect: understanding booking windows can help hotels yield better


Hotels have to improvise their channel mix with evolving market conditions. In this multichannel environment, an understanding of booking windows and knowing when and where to target your customer is absolutely crucial.

Understanding the booking window today is significant considering that the number of channels have exploded and all have vastly different characteristics. Indeed, wholesale, corporate, direct, online travel agents and MICE (meetings, incentives, conferences, and exhibitions) all act differently and if you want to optimise your revenue. It is essential to be aware of lead times, volumes, average revenue and total revenue generated from all of these.

Before a significant proportion of our business started coming from the Internet, most business was driven mainly by wholesale (including groups, FIT and series) and corporates. Depending on the source markets the lead times were quite predictable. In the initial years of Internet growth, it was considered as a last-minute channel and most hotels used it to offload leftover inventory. This continued for a while until the power of direct and power of yielding were realised.

Now the scenario is that the wholesale channel has retreated but is still largely predictable with the lead-time of several weeks to months but online channels are significantly varied. The online lead times are last minute to several weeks with more and more piling on closer to the check in dates.

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