MARKETING DISCUSSION – DISTRIBUTION CHANNELS OF A HOTEL

If you were marketing the boutique hotel, which distribution channels would you emphasize and why? Are there channels other than those discussed that you would take advantage of? If so, what are they and what are their advantages?

around 200 words-300 words minimum. Cite references if used.

 

HAS TO BE IN BY THEN – HOPING FOR SOONER – ASAP!

Transcript: Distribution Channels

Chains

Technically, chains are two or more properties that are affiliated with the chain brand; each hotel or restaurant sells essentially the same services/goods. What appears to be a chain, however, might actually operate under a number of ownership programs. For example, independently owned hotels may be operated by a management company performing under a management contract. Marriott, Four Seasons, and most other major franchise names frequently serve as management companies for hotel owners.

Franchises

In a franchise system, the franchiser owns the brand and sells the rights to the name, logo, reservations system, and other services to the property owner (the franchisee). These additional services can include:

• Use of a national brand so travelers can find a hospitality firm name they trust with consistent quality standards, and a marketing program that lets travelers know where the properties are located
• Ability to access a centralized computer reservation system and 800 number
• Access to a buying cooperative to help reduce costs through bulk rates or quantity discounts
• Standardized training programs to maintain consistent service quality

The downside of franchising is the expense to the franchisee in the form of royalty payments to the franchiser.

Travel and Tour Wholesalers

Travel and tour wholesalers buy blocks of rooms and/or airline tickets at discounts and assemble travel packages for the leisure market. The packages may include meals, transportation, and entertainment. The wholesalers then resell these travel packages to retail travel agents, who market them to end-users. One disadvantage is that organizations must offer discounts to the wholesalers, and risk becoming dependent on the wholesalers for a disproportionate amount of their business.

Hotel or Airline Sales Representative Companies

Hotel or airline sales representative companies sell hotel rooms or airline seats and their corresponding services in a given market area. It is often more effective for hospitality businesses to hire a representative in a given market area, especially when the market is distant and/or when cultural differences may make it difficult for an outsider to penetrate the market.

Incentive or Motivational Houses

Incentive houses or motivational houses provide incentive travel to employees or distributors as a reward for their efforts. For example, companies often use incentive travel as a prize for employees who achieve or exceed sales goals.

National, State, and Local Tourist Agencies

National, state, and local tourist agencies are an excellent way to get information to the market and gain room bookings. Some of these groups may be more passive in their promotional efforts, however, and will wait for the consumer to contact them.

The Internet

The Internet has become a dominant distribution channel. Most hospitality businesses are placing an emphasis on this direct means of reaching the end-user and nearly all have some presence on the Web.

Mobile Distribution

Mobile products are the newest channel of distribution. Although still in the emerging stage, marketing to consumers via mobile phones and PDAs is considered the next big wave. A few companies have already determined how to maintain the transactional security on these systems, which means that purchases of hospitality products will be able to be made via this channel. In addition, mobile marketing allows firms to confirm reservations, up-sell customers, and remain in contact.

Intercept Marketing

Restaurants, especially, are interested in achieving multiple points of distribution (PODs). PODs are scaled-down versions of a restaurant concept that take the form of:

• Towers or modular upright merchandisers (e.g., warmers and refrigerators)
• Carts for directly intercepting customers
• Kiosks or self-contained mini-restaurants

Essentials of Intercept Marketing

Two concepts are important to intercept marketing: hosts and venues.

• Hosts are high-traffic business locations such as malls, colleges, airports, and zoos. Hosts seek PODs to satisfy customers, increase revenue, and generate additional traffic.
• The location of the POD is called a venue. Restaurant companies seek venues to increase traffic flow, achieve cost-savings over traditional sites, and decrease competition.

A Singaporean-based company called GRANDSTAND® produces mobile nightclubs and bars. For example, AQUA® is a mobile, three-story, open-air club-lounge that launched in September 2008. The entire structure can be folded up, transported and reopened at a new location. The mobility enables AQUA® to move from one area of the city to another when trends shift, consumer preferences change, and new locations become popular. This innovation keeps AQUA® fresh and gives it tremendous competitive advantage in a cutthroat industry.