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Labor Relations
Selling goods in a marketing system is the only way to return the funds invested in the production of goods and make a profit. Therefore, the goal of distribution policy is to ensure the availability of goods to consumers. To do this, it is necessary: - to accurately determine the target market’s need for goods and plan the possible size of their sale; - to form effective distribution channels (CD) and quickly bring your products to the consumer; - to create maximum conditions for a quick meeting of the product with the consumer.
The distribution channel ensures the availability of a product to the consumer, while the channel itself consists of a certain number of individuals and firms that ensure the possibility of consumption or use of this product by an individual consumer or enterprise.
The main elements of sales planning are: - forecast of trade turnover, - preparation of a financial estimate of sales (we describe what profit we will receive and what the costs will be), - establishment of sales standards, - trade reporting and control.
Distribution strategies: - selective distribution (household appliances), - exclusive, - extensive (everywhere).
Forms of sales organization: 1. Merchandising - optimization of the arrangement of goods on the sales floor. 2. Franchising. 3. Direct marketing (Internet, personal sales, by telephone, through catalogues).
Distribution and distribution channels in a constantly changing market.
Channels of product distribution and distribution are the path through which goods move from producers to consumers, thereby eliminating long gaps in time, place and ownership that separate goods and services from consumers. Product distribution channels are characterized by the level of integration, width, length, as well as differences determined by the nature of the goods being moved and sold.
Functions:· informational - collection and dissemination of information obtained during marketing research about existing and potential customers, competitors, other participants and other factors of the marketing environment; · promotion - the formation of a communication policy in order to attract buyers; · negotiations - reaching agreement on price and other issues to ensure the transfer of rights of ownership or disposal of goods; · ordering - concluding agreements with other channel participants for the purchase of goods from the manufacturer; · financing - finding and distributing funds necessary to cover costs arising at various levels of the channel’s functioning; · taking risks - taking responsibility for the functioning of the channel; · possession of goods - sequential storage and movement of the products themselves, starting from the manufacturer’s warehouse and ending with the premises of end consumers; · payment - transfer of buyer's money to the seller's accounts through banks and other financial institutions; · labeling - transfer of ownership from one individual or legal entity to another.
Levels: Single-level channel includes one intermediary in the markets for industrial goods. This intermediary can usually be a sales agent or broker. Two-level channel consists of two intermediaries. In industrial goods markets, such intermediaries can be industrial distributors (supply and sales organizations) and dealers. Three-level channel includes three intermediaries. For example, in the processing industry, between wholesalers and retailers there are usually small wholesalers who buy goods from large wholesalers and resell them in small quantities to retailers. There are more levels, but they are less common. From the manufacturers' point of view, the more layers a distribution channel has, the less control there is over it.
Advantages and disadvantages of the main methods of promoting goods to the market.
1.Providing free product samples. Benefits: Attracts new consumers. Gives them the opportunity to fully evaluate the product. Promotes faster perception of the product. Ned-ki: Involves significant costs. Does not allow you to fully assess the prospects for selling the product. 2.Free demonstration and testing of the product. Advantage: Overcoming immunity to a new, unusual product. Formation of a new product. Ned-ki: Difficult and expensive to organize and carry out. Large investment of time. Reaching a narrow circle of consumers. 3. Dissemination of information with offers of benefits and discounts by sales agents. Advantages: High selectivity, targeting a pre-selected circle of consumers. High degree of consumer sensitivity and attention to the product. Ned-ki: A very labor-intensive process that requires a lot of time to achieve a tangible effect. Needs careful monitoring. 4. Distribution of information about discounts and benefits by mail. Advantages: Very high selectivity and good consumer sensitivity to the product. The ability to catch consumers in the environment they are used to using the product. Ned-ki: It takes a lot of time to get tangible results. High dependence on the quality of written information messages to consumers. 5. Dissemination of information about discounts and benefits through newspapers. Advantages: Speed and ease of practical use. Accounting for geographical features of sales. Ned-ki: Low degree of consumer susceptibility. Retailers may not recognize discounts and incentives. Careful planning is required. 6. Dissemination of information about discounts and benefits through special publications. Advantages: The most precise targeting to pre-selected consumer groups. Effectively reach the most important consumer groups. Ned-ki: Can be quite expensive. The most important consumers do not always respond to the benefits that are offered. 7. Money back guarantee announcements. Advantage: Increases the prestige of the company. Creates a market for new products. Ned-ki: Results do not appear immediately. Very limited impact on sales growth. 8. Supply of purchases with small gifts. Benefits: Promotes sales growth. Minor additional distribution costs. Ned-ki: There is a threat of petty theft (especially from retailers). Insufficient incentive for a regular customer. 9.Package of several products at a discount. Advantages: Promotes a rapid increase in sales volumes. Visual and easy to use. Negatives: Low selectivity to pre-selected consumer groups. May undermine the prestige of the brand. 10.Competitions and lotteries. Benefits: Promotes increased trust in the brand. Ned-ki: Expensive to use. Participation of a limited number of clients. 11.Demonstration of goods at the point of sale. Advantages: An effective means of attracting the attention of consumers. Ned-ki: Dealer consent required.
The role of inventory in the product distribution system, types of inventory.
Well-established organization of product distribution is a serious competitive advantage for a retail chain, as it allows for timely replenishment of inventory, ensuring the necessary breadth of assortment, and reducing the costs of delivering goods to the network’s divisions. Achieving maximum rhythm of organizational processes in the distribution chain, drawing up the most effective delivery routes, determining the most optimal volume and period of supply of goods to departments are the issues on which the main attention of the logistics services of large retail chains is focused. The process of commodity distribution is aimed at ensuring the supply of goods to the final links along the path of commodity flow from manufacturer to consumer, which, as a rule, are retail enterprises. This category is the object of study in the disciplines “Trading”, “Logistics” and “Marketing”, and each of them has its own specific interpretation. The above points of view imply that arrival at a retail outlet (place of sale) is the final point of the product distribution process. However, once in a retail warehouse, the product does not immediately enter the consumer sphere. It still has to go through a number of warehouse operations before it reaches the consumer. In some cases, it will be redistributed, that is, its movement will continue. Therefore, it is important to add that the final stage of the product distribution process should be considered the transfer of goods to the final consumer. In this case, it ceases to be a commodity and is not part of the commodity flow. Thus, in order to obtain a definition that most fully reflects the meaning of the concept under study, let us generalize the meaning inherent in each of the three above. So, product distribution is the process of bringing goods from manufacturers to the sphere of consumption, which is a set of transportation and warehousing operations in order to satisfy the needs of consumers as fully as possible.
Types: By By purpose, inventories are divided into two main types: production and commodity, which in turn are divided into three subtypes: current, insurance, seasonal.
Inventory management at each of these sites has its own specifics. Productive reserves, located at enterprises of all industries, are intended for industrial consumption. The purpose of creating inventories is to ensure the rhythmic functioning of the production process. Inventory They represent finished products intended for the end consumer, as well as inventories located along the route of the goods from the supplier to the consumer, i.e. at wholesale, small wholesale and retail trade enterprises, in procurement organizations and stocks in transit. Commodity inventories, in turn, are divided into inventories of commodity means of production and commodity commodities.
Industrial and commodity inventories are divided into: Current stocks- the main part of all reserves. Ensures continuity of the production or trade process between successive deliveries. Safety stocks- provide materials or goods to the production or trade process in case of unforeseen circumstances. The safety stock is a kind of shock absorber that allows the entrepreneur to feel comfortable. However, you have to pay for using comfort.
Seasonal stocks- appear due to the seasonal nature of production, consumption or transportation.
In relation to production or trade, inventories are divided into the following types: * carryover; * preparatory; * illiquid; * stocks on the way, etc.
Carry-over inventories include the balance of material assets at the end of the reporting period. This type of inventory ensures the continuity of the production or trading process from the beginning of the period following the reporting period until the delivery of the next batch of goods.
Preparatory supplies- this is part of the current inventory that requires additional preparation before using it in the production or trading process.
Non-liquid inventories are industrial or commodity stocks that have not been used for a long time.
Stocks on the way- inventories that are in the process of transportation at the time of accounting.
The essence of distribution channels
Sales channels for hotel services
Distribution channel - a set of independent organizations involved in the process of production of a service and available to individual consumers or corporate users.
The development of a distribution system begins with the selection of a participant in the distribution channels. Distribution networks in the hospitality industry are formed through contractual relationships and through loosely organized alliances between independent organizations.
Intermediaries are highly effective in promoting services to target markets. Thanks to their established connections, experience, specialization and scale of action, they can provide wider sales than the company itself.
Market channel participants perform the following key functions:
Information;
Promotion;
Contact;
Adaptation;
Negotiation;
Physical distribution;
Financing;
Taking risks.
The first five functions help to conclude transactions, the last three - to execute concluded transactions.
All these functions have three features:
Use limited resources;
They work more effectively on the basis of specialization;
They can move from one distribution channel participant to another.
To keep costs low, functions should be assigned to those channel members who can perform them most effectively.
The distribution channel level refers to any level at which some work is performed to deliver a service from manufacturers to the final buyer.
Channel 1. Direct marketing channel. This is a hotel that sells services directly to consumers.
Channel 2. Contains 1 intermediary level. In the consumer market, this is usually at the travel agent level.
Channel 3. Contains 2 levels. This is usually a travel agency.
Channel 4. Consists of 3 levels. A small wholesaler buys a service from large wholesalers and sells it to small retailers that are not served by large wholesalers.
Intermediary links of the sales system in the field of hospitality and tourism:
Travel agencies;
Tour operators;
Tour wholesalers;
Specialists;
Hotel sales representatives;
Government tourism associations;
Consortia;
Reservation systems;
Electronic service distribution systems.
Travel agents
Hotels that work with travel agents should make it easier for them to make reservations. Free telephone reservation makes the ordering process easier. Travel agents prefer quick payment for their services, so hotels must pay them commissions quickly. Agents select clients for the hotel. Many organizations sign exclusive agreements with one travel agency and require employees to book hotels only through that company.
Wholesalers of travel services
Wholesale travel companies collect so-called “travel packages” that are in good demand in the leisure market. These packages typically include not only transportation and hotel accommodations, but also meals, ground transportation, excursions and entertainment. The travel wholesaler must provide a commission to the travel agent and provide a travel package to consumers.
Specialists: travel brokers, motivational houses and representatives of gaming establishments
Travel brokers sell coach tours that appeal to a variety of markets. Motivational houses develop incentive trips offered to employees or distributors as a reward for success in their work. Representatives of gaming establishments serve the casino business as intermediaries for premium players.
Hotel representatives
They sell hotel rooms and hotel services in a specific market area. This method is effective for hotels that hire their own representative and do not use their own salespeople. Such sales representatives must represent the interests of non-competing hotels.
National, state and local travel agencies
An excellent way to inform the market and increase bookings. National organizations promote tourism within their own countries. Government agencies promote their services both abroad and within their own state. Regional associations can also help independent operators and hotel chains.
Consortiums and reservation systems
Room reservation systems are centralized room reservation systems for hotels. They usually provide a system for small hotel chains or reservation services abroad.
A consortium is a group of organizations in the hospitality industry that is based on an alliance for the purpose of obtaining mutual benefits for its members. The main reason for organizing consortia is marketing. The consortium allows the hotel to be independently owned and operated while benefiting from combined marketing efforts.
Reservation systems based on airline computer networks
Catalog of travel products for travel agencies and other distributors of hospitality services. The system was developed by airlines to stimulate their sales. Airlines can also operate as tour operators.
Internet
The Internet is used in the hospitality industry as a channel for distributing its services. Users can place an order without leaving their computer.
Distribution channel - a set of independent organizations involved in the process of producing a service and available to individual consumers or corporate users.
The development of a distribution system begins with the selection of a participant in the distribution channels. Distribution networks in the hospitality industry are formed through contractual relationships and through loosely organized alliances between independent organizations.
Intermediaries are highly effective in promoting services to target markets. Thanks to their established connections, experience, specialization and scale of action, they can provide wider sales than the company itself.
Market channel participants perform the following key functions: information, promotion, contact, adaptation, negotiation, physical distribution, financing, risk taking.
The first five functions help to conclude transactions, the last three - to execute concluded transactions.
All these functions have three features:
- 1) use limited resources;
- 2) work more efficiently on the basis of specialization;
3) can move from one distribution channel participant to another.
To keep costs low, functions should be assigned to those channel members who can perform them most effectively.
The distribution channel level refers to any level at which some work is performed to deliver a service from manufacturers to the final buyer.
Channel 1. Direct marketing channel. This is a hotel that sells services directly to consumers.
Channel 2. Contains one intermediary level. In the consumer market, this is usually at the travel agent level.
Channel 3. Contains two levels. This is usually a travel agency.
Channel 4. Consists of three levels. A small wholesaler buys a service from large wholesalers and sells it to small retailers that are not served by large wholesalers.
In the field of hospitality and tourism, the intermediary links of the sales system are: travel agencies, tour operators, tour wholesalers, specialists, hotel sales representatives, government tourism associations, consortia, reservation systems, electronic service distribution systems.
- 1. Hotels working with travel agents should make it easier for them to make reservations. Free telephone reservation makes the ordering process easier. Travel agents prefer quick payment for their services, so hotels must pay them commissions quickly. Agents select clients for the hotel. Many organizations sign exclusive agreements with one travel agency and require employees to book hotels only through that company.
- 2. Wholesale travel companies are wholesale sellers of tourism services, they collect “travel packages” that are in good demand in the leisure market. These packages typically include not only transportation and hotel accommodations, but also meals, ground transportation, excursions and entertainment. The travel wholesaler must provide a commission to the travel agent and provide a travel package to consumers.
- 3. Specialists: Travel brokers, motivational houses and representatives of gaming establishments are also market intermediaries of hotels. Travel brokers sell coach tours that appeal to a variety of markets. Motivational houses develop incentive trips offered to employees or distributors as a reward for success in their work. Representatives of gaming establishments serve the casino business as intermediaries for premium players.
- 4. Hotel representatives sell hotel rooms and hotel services in a specific market area. This method is effective for hotels that hire their own representative and do not use their own salespeople. Such sales representatives must represent the interests of non-competing hotels.
- 5. National, state and local travel agencies provide an excellent channel to inform the market and increase bookings. National organizations promote tourism within their own countries. Government agencies promote their services both abroad and within their own state. Regional associations can also help independent operators and hotel chains.
- 6. Consortia and reservation systems play a large role in the marketing of hotel services. Room reservation systems are centralized room reservation systems for hotels. They usually provide a system for small hotel chains or reservation services abroad. A consortium is a group of organizations in the hospitality industry that is based on an alliance for the purpose of obtaining mutual benefits for its members. The main reason for organizing consortia is marketing. A consortium allows a hotel to be independently owned and operated while benefiting from combined marketing efforts (eg Leading Hotels of the World).
- 7. Reservation systems based on airline computer networks, as a representative of hotel market intermediaries, represent a catalog of travel products for travel agencies and other distributors of hospitality services. The system was developed by airlines to stimulate their sales. Airlines can also operate as tour operators.
- 8. The Internet is used in the hospitality industry as a channel for distributing its services. Users can place an order without leaving their computer.
Before designing distribution channel systems, it is necessary to analyze the requirements and demands of the consumer, identify and analyze the goals and limitations of the channel, as well as the main channel alternatives and their evaluation.
Designing a service distribution channel begins with identifying the services that consumers in different market segments need. To develop an effective distribution channel, a company must not only understand what services the customer needs, but also balance customer needs with the ability to satisfy them and the costs of satisfying them. The hotel must be able to cover the costs associated with operating the distribution channel and maintain an attractive price level.
The company must decide which customer segment to serve and which distribution channels to use. A company's distribution channel objectives are also influenced by the products and services themselves, company characteristics and policies, characteristics of intermediaries, and factors in the marketing environment.
Companies and intermediaries must agree on the rules and responsibilities of each member of the distribution channel. To avoid disputes and conflicts, companies and channel participants must have a specific written agreement.
The hotel must evaluate each alternative distribution channel option according to economic criteria and criteria of adaptability and control.
The possible level of sales that a distribution channel participant achieves must be assessed in relation to the costs of its creation and operation.
Each channel has a different level of sales and costs. An independent sales representative is more useful in markets unfamiliar to the hotel.
Some clients prefer to deal with a company that represents several different hotels.
An important criterion when choosing the structure of distribution channels is the degree of their control. The work of sales representatives involves less control than the work of an in-house sales department. Control is also an important criterion in the franchising system and in the selection of participants in a combined distribution channel structure.
The long-term commitments of each distribution channel make it inflexible. Typically, the benefits gained from developing a long-term alliance are replaced by a loss of flexibility. Understanding the meaning of deals and the potential for future market changes can help a manager decide on the duration of agreements involving a distribution channel.
Managing a distribution channel requires selecting and motivating individual intermediaries and evaluating their performance.
Teamwork, organizational management actions, effective marketing policies, close cooperation with all participants in the sales channel ensure high quality customer service.
Hotels have different capabilities and abilities in attracting qualified intermediaries. The selection of channel participants for services must be as careful as the selection of employees.
When selecting channel participants, hotel management must evaluate: the development opportunities of each applicant company, its profits over the past period, income level, cooperation opportunities, reputation, number and quality of the workforce.
The hotel must continually encourage distribution channel members to perform effectively. He must motivate not only his own employees, but also independent intermediaries.
Hotels must inform sales representatives of changes in facilities, services and equipment.
The performance of intermediaries should be regularly assessed. Hotels should evaluate the support that one channel member provides to another and adjust those relationships as necessary.
1Recommendations have been developed for working with hotel sales channels for developing tourist destinations in the Russian Federation. Particular attention is paid to electronic sales channels. Hotels in developing hubs do not pay enough attention to improving e-sales efficiency and channels in general, which leads to ineffective operations, complex and thoughtless pricing across channels or within a single channel. It is necessary to evaluate the selected pricing strategies and bring them to a unified approach in accordance with the selected distribution channels of hotel services. It is proposed to use the “price parity” strategy more widely, taking into account the specifics of specific hotel enterprises. Analysis of the effectiveness of working with distribution channels for hotel services is complicated by the fact that current indicators do not assess the cost of working with distribution channels.
hotel business
distribution channels
pricing
reservation systems
organization
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In world practice, the distribution of hotel services is carried out through a large number of channels. These include: direct sales, sales through a hotel website, travel agency, centralized (corporate) booking systems, online travel agencies, virtual tourist communities, tour operators, tour operator websites, global booking systems, consolidators, auctions, mobile applications, representative companies, company websites -representatives, destination management systems, tourist information centers.
According to consulting agencies, despite the widespread development of the Internet and social networks, online distribution channels account for only 45% of all bookings in 2015. This means that a large share of bookings comes from traditional booking methods: telephone, reception desk, event agencies, etc. .e. bypassing online channels. It should be understood that the share of online distribution channels is constantly growing, but at the moment they are not the only means.
The development of hotels as part of hotel chains is three times faster than the development of independent hotel enterprises. For independent hotels, digital channels are more important than for chains: independent hotels account for 58% of bookings globally, and even more in Europe - 74%. Most of them are accounted for by the services Booking.com and Priceline.com, as they are more widespread in Europe (in the rest of the world Expedia.com is also added to them).
When searching for a hotel, a tourist visits a different number and types of sites, for example, the British make an average of 35 visits to travel sites, in particular, TripAdvisor.com and popular online travel agency sites, Americans make an average of 38 visits, paying more attention to the websites of hotels and airlines themselves.
In Europe, 71% of gross bookings came from online travel agencies in 2015. In this region, Booking.com is the most popular service, with 87% of hotels finding it the most useful service among online travel agencies. The second most useful and popular site is TripAdvisor.com, especially for independent hospitality businesses.
Currently, only half of Europe's independent hotels have online booking facilities. In the Russian Federation there are many times fewer such hotels. Many hotels use pseudo-online booking (without communication with the hotel management system and instant confirmation).
Thus, electronic channels for the distribution of hotel services are an element with high potential. Hotel enterprises in the Russian Federation, especially in emerging markets, need a clear approach that determines how and through what channels to sell their hotel product most effectively.
Purpose of the study
The purpose of this study is to analyze existing approaches to working with hotel product distribution channels and develop recommendations for improving methods of working with online channels for hotel industry enterprises in developing tourist destinations in the Russian Federation. To do this, statistics on hotel booking parameters in developed and developing tourist centers of the Russian Federation were analyzed, and a study of the features of working with distribution channels was conducted.
Research results and discussion
The work of Russian hotels with distribution channels is the most important point. To demonstrate the approaches, let’s look at how Russian hotels are presented in electronic channels. 11 hotel enterprises were studied. The results of 6 Crimean hotels are compared as representatives of the developing hotel market, as well as iconic hotels in Moscow, St. Petersburg and Sochi. The purpose of the analysis is to compare approaches to working with channels and pricing. The booking was made for the period from April 4 to April 8, 2016 - a season of average activity without any random factors affecting demand. We booked a standard double room. The analysis was carried out based on data from world tourism portals Booking, Expedia, HRS, Hotels, to which were added the results of Russian portals OZON, Ostrovok and the websites of hotel companies themselves. The results are presented in the table.
The results of the study demonstrate different approaches to working with electronic channels. The first thing you should pay attention to is the representation of hotels in the services under study. Firstly, the complete absence of Crimean hotels in the world systems Expedia and Hotels. At the moment this is due to sanctions against the Russian Federation. In addition, Crimea on these portals still refers to Ukraine. Those portals on which Crimean hotels are present are not fully used: some hotels are not sold on datravel and HRS.
One of the largest and most famous hotels in Crimea, Yalta Intourist, shows the worst results: it is not represented anywhere except datravel and Ostrovok. Even the most popular Booking portal in Europe was ignored, which causes some misunderstanding, since the number of rooms of this hotel enterprise is very large: 1186 rooms, 10 restaurants and bars.
In general, the hotels in Crimea under consideration at this moment use only 54% of the potential of electronic channels (for comparison, other hotels studied use 74%), which in itself raises the question: how can efficiency be improved if the hotel does not want to sell itself?
Secondly, you should consider the price structure of various hotel portals and websites. Here you can see that, as throughout the world, hotels adhere to two approaches: “price parity” and working with each channel separately. A prominent representative of the concept of “price parity” is the Swissotel Resort Kamelia in Sochi: all channels sell it at the same price, including even the hotel company’s own website.
Sochi Radisson Blu Paradise Resort & Spa actually also works according to this concept, with the exception of sales on datravel and Ostrovok. Most likely, the discrepancy in prices on these services is due to reorientation to other channels.
Such representatives of the hotel business as Belmond Grand Hotel Europe and Baltschug Kempinski Moscow use the same “price parity” on international portals, and make a discount for Russian channels. You should also pay attention to the comparison of room prices on the services under study and on the websites of the hotels themselves. "Grand Hotel" sells rooms on its website cheaper, and "Balchug" - more expensive. In this situation, the activities of a Moscow hotel seem more effective from the point of view of profitability, since when selling through portals, the commission that will be paid if a reservation is made should be taken into account. In addition, when selling cheaper through your website, as Grand Hotel does, a conflict may arise with portals, since their sales volumes will decrease. Such a conflict occurred recently with a well-known Moscow tour operator.
The Sochi Imeretinsky Hotel shows the greatest variety of prices across channels. The difference in price per room ranges from 3.2 to 6.1 thousand rubles. However, the hotel is represented on almost all channels.
The opposite situation is demonstrated by hotels in the developing market of Crimea. “Yalta Intourist” is practically not represented on different channels, and its room prices are different everywhere. “Villa Elena” is presented on 62% of channels, with two channels at one price, two more at a different price, and one at a third. “Best Western Sevastopol” actually operates at “price parity”, but sells rooms cheaper on its own website. Its representation is also 62%. “Aquamarine” shows a complete spread of prices with 62% representation. “Crimean Breeze” has parity across three channels, the price corresponds to the price on its own website, and is presented on 75% of channels.
Thus, hotels in emerging markets, firstly, are poorly represented on various channels, and secondly, pricing across channels is not entirely acceptable. In this case, it can be recommended to follow the strategies used by the leaders of the hotel market, in particular, to apply the concept of “price parity” more widely at the current stage of development.
Let's look at this concept in more detail. The main idea of the concept is as follows: no matter through which channel the client bought the number, any of them will have the same price. This strategy is very good if the hotel does not plan a variety of offers. However, in this case there is no possibility of any reorientation of customers to a specific sales channel, for example, to your own website. If a hotel has several powerful sales channels, you can ensure parity only for them, and increase the rate for others; in this case, a situation may occur when the “offended” channels simply stop showing the hotel in search results.
It should be taken into account that price parity is established for public offers on sites, which leaves the possibility of working with special rates that hotels can offer to their closed list of guests.
Room prices on popular online resources and hotel sites
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Price per day, rub. |
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Hotel website |
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"Yalta Intourist", Yalta |
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"Oreanda", Yalta |
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"Villa Elena", Yalta |
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"Best Western Sevastopol" Sevastopol |
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"Aquamarine", Sevastopol |
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"Crimean Breeze", Yalta |
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Baltschug Kempinski Moscow, Moscow |
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Belmond Grand Hotel Europe", St. Petersburg |
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Swissotel Resort Camellia", Sochi |
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Sochi Radisson Blu Paradise Resort & Spa, Sochi |
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"Imeretinsky", Sochi |
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For blind booking sites (such as Priceline), it is not possible to track parity because the selling price on these sites is unknown and only determined at the time the booking is made.
It is impossible to maintain price parity in package sales. Online services take some time to update hotel offers. However, package sales provide an opportunity for hospitality businesses to circumvent parity requirements. The hotel can post such packages on its website in order to attract customers. Package sales represent a hidden discount and can be used by hotels to increase sales through their own website without violating the requirements of online services. According to research results, when searching for a hotel, most tourists first go to online service sites, and having found a suitable hotel there, they go to its own website and book a room there. This is precisely why price parity between portals and your own website is needed. It should also be noted that not all categories of hotel rooms can be sold through portals, so it is possible not to maintain price parity for such categories and apply any other pricing strategies to them.
Thus, price parity is important for most hotel businesses. During periods of recession, many hotels cannot survive without electronic sales channels, making the use of parity almost mandatory.
An important issue in working with sales channels is the cost of booking for a hotel. According to the Hotelsmag.com agency, the average cost of hotel distribution channels is as follows: corporate website of a chain hotel - $2-5 per booking; independent hotel website - $8.5-12.5; telephone number of a chain hotel $6-10; independent hotel telephone - $10-15; online travel agencies for chain brands - $40-120 (subject to a 20% commission, two-day stay and an average price of $100 to $300 per night); online travel agencies for independent hotels - $75-$150 (subject to 25% commission, two-day stay and average price from $150 to $300); global booking systems for networks - $24.5-66 (subject to transaction fees of $4.5-6, 10% travel agency commission, two-day stay and average price of $100-300); global systems for independent hotels - $42.85-74.5 (subject to transaction fees of $12.85-14.5, 10% travel agency commission, two-night stay and average price of $150-300) .
In fact, there is a kind of paradox: the statistics of the hotel's performance do not correspond to the profitability of its activities. For example, a hotel sold a room for $100 through an online channel with a 15% commission, and a room for $90 directly. In the first case, the average price will be higher, but the profitability will be higher in the second case. In this situation, it becomes impossible to evaluate the hotel's performance using standard indicators. The main indicators of hotel profitability are gross operating profit per room (GOPPAR) and revenue per room (RevPAR), the difference between which is that when calculating GOPPAR, all operating expenses of the hotel are taken into account. The problem with these indicators is that they cannot be used to understand and determine the effectiveness of a hotel's pricing and distribution system. Under these conditions, a new indicator arose - NREVPAR - net revenue per available room (Net Rooms Revenue per Available Room).
Calculated using the formula:
where the net income from the sale of rooms is calculated as the difference between the income from the sale of rooms and the cost of the channel, channel commission, travel agency commission, etc.
Net revenue can be measured not only for the hotel as a whole, but also for each marketing segment. This approach can lead to the calculation of not just the average ADR price, but to the calculation of the NADR (Net Average Daily Rate) for each market segment or distribution channel. Additionally, net revenue and net average price can be used to analyze corporate bookings, direct sales, groups, travel agencies, tour operators and wholesalers. For correct calculation, accurate information about commission percentages and transaction costs is required. In addition to this indicator, you can additionally use standard economic indicators of the efficiency of distribution channels: return on investment in advertising ROAS (Return on Ad Spend) and a simple return on investment ratio ROI (Return of Investments).
Conclusion
In the modern hotel business, effective work with distribution channels plays a huge role. The share of electronic distribution channels is constantly increasing, so the greatest attention must be paid to working with them. An analysis of hotel enterprises in the developing tourism markets of the Russian Federation shows that work with distribution channels is unsystematic in nature, and pricing for rooms by channels is not always effective. In these conditions, it is necessary to develop clear strategies for working with channels, in particular, compliance with the conditions of “price parity,” as well as the need to constantly monitor the effectiveness of channels and the hotel enterprise itself, taking into account the shortcomings of currently used indicators.
Bibliographic link
Kozlov D.A. ORGANIZATION OF WORK WITH DISTRIBUTION CHANNELS IN HOTELS OF THE RUSSIAN FEDERATION // International Journal of Applied and Fundamental Research. – 2016. – No. 4-3. – P. 600-604;URL: https://applied-research.ru/ru/article/view?id=9022 (access date: 10/11/2019). We bring to your attention magazines published by the publishing house "Academy of Natural Sciences"
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The implementation of hotel services is the final stage of the marketing policy of a hotel enterprise. Each hotel strives to create an effective system for selling its services - a set of intermediary organizations and structures involved in their promotion and delivery to the consumer. The sale of hotel services can be carried out through various distribution channels: direct sales, sales through intermediaries, through international and national computer reservation systems or those belonging to large hotel chains. Direct sales are carried out by employees of the reception and reservation departments, i.e. Hotel employees sell hotel services to individual clients, organizations, enterprises, and institutions that purchase them for their employees. To sell services through intermediaries, the hotel creates sales channels that organize advertising of services, accumulate information about market conditions and the state of demand, carry out sales, and share the financial risk with the hotel in the sale of hotel services. Intermediaries are organizations that hold various business events, exhibitions and congresses, entertainment events, sports competitions, etc. Customers of hotel services can be territorial authorities and administrations that organize receptions for various, including foreign, delegations. Hotel servants are the main component of tourist travel, so tour operators are also sales channels for Hotels.
Purchasing a block of places on a commitment basis is one of the forms of work of a tour operator and a hotel. In this case, the tour operator makes a full or partial prepayment of the declared number of rooms immediately before the season and does not have the right to refuse the declared block before the expiration of the commitment period. Compared to renting, the costs and risks of the tour operator in this case are not so significant. He determines the number of rooms for which he is willing to take the risk of selling them. Purchasing a block of places simultaneously in several hotels gives the tour operator the opportunity to expand the range of its tours, focusing on different market segments. The size of the discounts provided by the hotel to the tour operator depends on the terms of the commitment. The blocks sold are divided into several types: strictly fixed; freely fixed without indicating their number. Depending on the risk level of the tour operator, blocks are classified into hard and soft. A rigid block of seats implies the full financial responsibility of the tour operator for the sale of the declared and paid block during the entire booking period. A soft block refers to the working conditions of a tour operator, which make it possible to refuse part or all of a block a certain time before the planned arrival if the actual sales volume turned out to be significantly less than planned.
Depending on the size of the purchased blocks, they can be:
Exclusive;
Large;
Significant;
Minor.
Some tour operators practice irrevocable bookings - a certain number of rooms for a relatively short period of time, indicating a deadline for payment in the application. In this case, the tour operator cannot refuse the booked rooms without paying penalties. There are two types of irrevocable reservation: strictly fixed; and renewable. A distinctive feature of working on the terms of an increased commission is the reservation and payment of rooms for a specific tour operator client who agrees with the terms of the tour, has made an advance payment or has paid for the tour package in full. This eliminates the risk in the work of the tour operator, since even if the client refuses the tour, the tour operator’s penalties are transferred to the refused client. In these cases, it is customary to talk not about discounts, but about a simple operator’s commission, the amount of which depends on the cost of the room. Working on an increased commission basis is the most common means of stimulating the trading activity of tour operators working with a hotel. Reserving rooms through national computer reservation systems allows the hotel management to independently determine the conditions, number and category of rooms offered for sale, and change these parameters at any time; at the time of booking, the allocated quota of rooms is automatically reduced, and a notification of the order is sent to the hotel reception service . Inquiring about availability and making a reservation takes place at the company’s office, connected to the system via the Internet. Payment, including the cost of accommodation and booking, as well as commission, is accepted by the company at the time of booking. After payment, the client is given a completed voucher form, which contains complete information about the services provided and is written as the basis for checking into the hotel. Operation of the system is possible with a dedicated Internet line and does not require any special equipment or software.
