Distribution Channels and Their Effectiveness in Revenue Management

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Literature Review

According to (Malik and Ullah., 2019)A distribution channel is the chain of the business or intermediaries through which companies goods and their services passes until their product reaches to the customers. There are different channels are included in this distribution channels such as - retailers , distributor , wholesalers even the intranet. It is important for the business to make look relationship with those distributors, so they can add some values in the product, and they can make profit from selling of product and services. Distribution channels are the part by which all the services and goods must travel to arrive at the intended consumer.

As per the view of (Vicky., 2020) It is important for the hotel's management to look for their distribution channels to increase and enhance the sale of the hotel. Most of the online system helps hotels a lot in attaching and attracting the guest to the hotels. This helps hotels to increase their profit more , there are some hotel websites who are mediator and provide online booking to the travellers. This makes easy for the hotels to guest in the hotels and people use those sites to get accommodation services. Almost every hotel collaborate with those online travel booking sides. Technology always helps to increase the revenue and this trend helping this industry to take growth in the market. Distribution channels of the company have many advantages which affect the business and company can show their presence in the market. Distribution channels are an approach currently accepted by many hotels in this industry, so they can increase their sales and revenue of the hotel.

The matter of the fact is that the goals of the hotels is to make better visibility on all the channels of distribution. So customers can find them easily, and they can take accommodation services for them. It directly affects von the companies' profitability, and they can show their presence in the market. Having good distribution for the hotels means high revenue and reputation among the guest and their customers. They can connect with the customers and gain customer loyalty. Some marketing distribution channels who help hotels to provide their information to the trailers and guest which show the facilities provided by the hotels which attract the customers to take their services. Reaching new customers means increase in the profitability and reputation of the hotels so it is important for the hotels to make good distribution network, so they can take competitive advantages in the Hospitality industry.

According to (Rance and et.al., 2017) there are many distribution channels in Hospitality industry which is helping hotels to earn high revenues and take competitive advantages in the market. One of them is an official website - most of the people look for the hotel's website, so they can know about the services provided by the hotels and it is important for them to make their worn official website so customers can look and make booking in the hotels. Booking engine- Ux is the most important factor which shows experience of the guest. It can be determined whether potential guest bounce or book after arriving at the hotels booking engine. Social media - this is one of the effective distribution channels who have provided high growth to this industry. Companies run campaign on the social media platform to attract travellers. This distribution channels helps to make new customers and also helps to increase profitability of the hotel. Travelling sites- another most important channels which provide growth in the sector is 3 party applications.

Most of the common types of the distribution channel in this industry is official website. Almost every hotel have their own website to attract customers to take competitive advantages. When travellers look for the hotels the check hotels in the areas where they are going, it helps them to know which hotel is best and nearby the destination. It has huge role to make this industry successful and increase profitability of the hotels.

Analyses of Distribution Channels Used by Two Brands

Distribution channel can be defined as path which is used by companies to deliver its goods to end users. Firm can make direct distribution or indirect distribution channels. There are many kinds of distribution channels such as wholesalers, retailers, online etc.(Malik and Ullah, 2019).

Hilton hotel is one of leading and well known hotel that is serving well to consumers across the world. Firm is using online and electronic distribution channels to interact with its guests and to manage room reservations. Company has around 2000 hotel properties globally hence it is very difficult to deal with large consumers manually hence entity has used online or direct distribution channel. One of the great benefit of this tool is its price integrity. Hilton has developed its standards for brand (Dieck, Fountoulaki and Jung, 2018). Company is providing quality and luxurious services to wide range of consumers hence it charges that much amount and all this detail are clearly written on its website and other online sites. Individual can also use third party online channel to confirm its rates of rooms and other services. Hence customers always get value for money in Hilton hotel.

Direct distribution channel through online site aids Hilton in brand enhancement. As consumers can view its website to make their purchase decision, they can get upgraded benefit if they use online booking. Online reservation process of Hilton is very smooth and it easily fulfil needs of consumers. When individual search for best hotels online then individual can find the name of Hilton along with its all features. Hilton HHonors members can make their profile and can sign any time to re-book their past reservations (Eriksson and et.al., 2020).

Hilton has recently entered into online merchant model program with Expedia Inc, now participants can get all details of room prices, availability of room on its central reservation system. Cost of using online sites or electronic distribution channel is quite low as compare to indirect distribution channels (Rance and et.al., 2017). Hence Hilton is taking advantage of it and managing its revenues in effective manner. Hilton uses OTA system (Online travel agents) for booking of rooms. Statistical records show that more than 64% hotel bookings are done through this system.

This is the global brand that serves its guests well and ensure to make them satisfied with services of hotel and resort. It is using GDS system (Global distribution system). This is the wide network that generally used by big companies that are having strong position in market. This distribution channel helps the firm in getting connected with wide range of customers internationally. This tool aids hotel in making balance in room rates by this way enterprise can maintain healthy relationship with its consumers and can enhance revenues of organisation. This GDS system allows hotel in increasing sales and remain in competition. Many tour operators are using this GDS system and they book hotels for travellers online, as compare to 2010 there is 8.3% demand hike in hotel bookings by using global distribution system.

Major GDS are such as Sabre, Galileo etc. This aids Marriott hotel in making close connection with the travellers and enhance their reservation rate for rooms. This is helpful tool and its average cost in the year 2010 was 20% whereas in 2015 it reached to 15%. In the year hotel room revenues was 300000 (Vicky, 2020). Hotel can manage large data through this channel easily and it needs not to worry about services to consumers. As consumers can search about room separately and hotel services. Being a global brand, Marriott hotel always maintain automated connection with suppliers. This is beneficial application to raises profitability of company and also support in enhancing occupancy rate of hotel rooms.

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CONCLUSION

As per the above report has been provided literature review of the distribution channel and it has been included effectiveness of those channel on the Hotel revenue. This section has been analysed approaches of the distribution channel and most common approach amongst all. In the other analysis and discussion section of this report has been analysed distribution channels of Hotel Hilton and Marriott. It has been compared both the hotels on the bases of their distribution channels. To get more details about the online assignment help ask our experts.

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