Brij Bhushan Chachra, Vice President of Revenue Management and Distribution, The Indian Hotels Company Limited, HSMAI Global Distribution Advisory Board Member
Distribution teams’ missions have always been focused on selling rooms across a multitude of platforms. But as the industry evolves, so should our strategies. It’s time to cast our net wider and delve into structured approaches for food & beverage (F&B) and other ancillary areas.
If distribution and revenue strategies can enhance room sales, why can’t they work on F&B and other ancillary sectors? I brought this question to fellow HSMAI Global Distribution Advisory Board members.
A Challenge: Fragmentation
In today’s landscape, no global system embraces everything: rooms, F&B, amenities, and other services. Individual systems often manage these revenue streams. One major roadblock is the decentralization in F&B distribution compared to room sales.
However, challenges also lead to innovation. Some establishments have begun launching direct channels for restaurant bookings. These endeavors, though in their infancy, have shown promise with about 8-10% topline increase for participating restaurants.
The Power of Centralization
The dream? A platform where customers can centralize their purchases. Imagine booking a room, reserving a table at the hotel’s restaurant, and buying tickets to the in-house water park, all in one go. This streamlined approach doesn’t just enhance the guest experience but also sets clear expectations for the customer journey.
The Learning Curve
Tackling the intricacies of distribution for ancillary areas isn’t about learning an entirely new skillset. Instead, it demands an expansion of existing knowledge. While there’s a significant learning curve, the foundation remains the same. The key is to evolve, pushing out of the comfort zones of room-focused strategies and embracing a holistic approach.
What’s First: Strategy or Technology?
When we talk about total revenue management, the age-old chicken-and-egg conundrum emerges. As distribution evolves, revenue strategies must also progress. There’s no point in implementing dynamic pricing if distribution systems can’t support it. Strategy and technology must move hand in hand, with neither impeding the other.
A New Lens for F&B
While the prospect of dynamic pricing in F&B might not be as straightforward as in room sales, there’s room for creativity. Differentiated pricing for locals versus travelers or offering discounts during off-peak hours are just some examples. A few players are even testing the waters with dynamic pricing for both demographics.
The future of distribution in the hospitality sector isn’t just about rooms anymore. With a growing emphasis on the whole guest experiences and maximizing revenue streams, it’s time for the discipline to broaden its horizons and venture into the untapped potential of F&B and other ancillary areas.
Questions for Your Team:
- Which areas can be impacted through distribution platforms?
- Does the scope of distribution now need to enhance to other streams?
- What are the systems and platforms available and recommended?
- Is there a need for a central distribution system for all services? Is there anything available?
- The customer being center of all, what does the customer requirements?
- How does revenue management be enabled though these platforms?