Revenue Management and Distribution

By Linda Gulrajani, CRME, vice president of revenue strategy and distribution for Marcus Hotels & Resorts and chair of HSMAI’s Revenue Management Advisory Board

Distribution is one of the hospitality industry’s evergreen topics — so much so that attendees at HSMAI’s Fall Curate 2018 event last month identified it as a priority issue. Following up on that, I led a conversation about distribution on a recent call for HSMAI’s Revenue Management Advisory Board (RMAB). Here are key takeaways: 

1. Defining distribution. “For us,” one RMAB member said, “distribution is the combination of any channel where inventory — not just hotel inventory but also inventory for other products and services, such as restaurants, spas, etc. — has been distributed to the end consumer.” Another member added: “Really anything having to do with getting a revenue-management strategy, from a B-to-B or a B-to-C standpoint, out to our partners or consumers.” I agreed, noting that distribution is anything that helps you get your product out there, whether it’s normal channels such as your global distribution system (GDS) or newer channels such as voice-interface platforms.

2. Educating ourselves. What do revenue-optimization professionals need to know about distribution? “It’s important to understand the different mechanics associated with each channel,” an RMAB member said. “With all of the channels, technology and system integrations are really the key, and we need to understand how the systems talk to each other. We see this, for example, with some of the shifts from static wholesale FIT [free independent traveler] to full dynamic. It’s about the channels on the other end: Can they handle our hotels’ recommendations and strategies in the way we expect? Do they support those? Can they integrate and handle other systems’ decisions — sophisticated revenue-management systems and the like?”

3. Delineating roles. Are there specific things that revenue-optimization professionals at different levels should know? “I definitely think there are different roles for, let’s say, a corporate-level RM versus a property-level RM,” one RMAB member said. “For corporate-level RM, definitely one of their largest stakeholders will be the distribution department, so having a better and more complex understanding of the global settings will definitely help. Whereas at the property level, really understanding how distribution impacts that property is important.”

Another RMAB member added: “Defining responsibilities of other departments and disciplines is key as well: Where does relationship management reside — i.e., sales or marketing — and where is revenue management taking the lead? In many organizations, it has been somewhat difficult for some sales individuals to let go of some of their former relationship responsibilities as everything becomes much more focused on technology.”

4. Turning the tables. Conversely, what do distribution teams need to know about revenue optimization? “In my experience, it’s really just understanding the strategy,” one RMAB member said. “A lot of times, there could be a potential offer that’s available, but they don’t really understand our underlying strategy of why we’re doing something. If they had that basic understanding, it could help us uncover a lot of unique ways of tweaking our distribution to get better results.”

5. Finding success. How do you make distribution work for your whole organization? “Alignment on overall commercial focus and overall strategy,” an RMAB member said. “So, really making sure that when you have conversations at a high level from a revenue-management perspective, distribution stakeholders are in the room. And then vice versa, if you’re doing any systems implementation, like an RMS [revenue-management system] or CRS [customer-relationship system] that you need distribution to be a lead on, there is shared communication on both sides, because they’re going to know that side of the business better than the RMs.”

Categories: Marketing
Insight Type: Articles