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An Overview of Electronic Distribution Channels
Electronic Distribution Channels are the electronic ways in which customers can find and book your hotel. Technically speaking, the telephone could be considered an electronic distribution channel, but normally its not. Electronic distribution channels are usually seen as those that involve the Internet or GDS system, or those that involve intermediaries who use the Internet or GDS system.
The following chart gives an overview of the various electronic distribution channels and how customers use them to find and book your hotel. For more information about the agent or process involved, just click on the appropriate box.
How People use Electronic Distribution Channels to Find and Book your Hotel
Telephone, Fax & Email
Bookings by telephone and fax are not normally considered as electronic distribution channels, but they are, and not only because they are electronic devices. Customers can use several communication channels when making one reservation. For example, many people will find your hotel on the Internet, but telephone you to make the reservation.
Search Engines
Most customers who are looking for hotel accommodation via the Internet begin their search using a search engine. 86% of all Internet searches are done using one of four main search engines. These are Yahoo! (26 percent), Google (23 percent), AOL (20 percent), MSN (17 percent). Other search engines include Alta Vista, Ask Jeeves, Alltheweb, Looksmart, Lycos, etc..
People also search the Internet using directories, which are compiled by humans and organised into specific categories. Search engines, on the other hand, automatically find, list and deliver website links, without human involvement.
When somebody uses a search engine to look for accommodation in your area they will find either your hotel's website, or a travel intermediary. Since you pay a commission or discount on every booking made through a travel intermediary it is to your advantage that they find your hotel's website first. Since very few people will look past the first three pages of search engine results it is important to optimise your website for the search engines and promote it properly so that it shows up high on the list of search engine results. A good hotel website listed in the top of the results for keywords concerning your destination can result in a spectacular increase in bookings.
Other Websites
Some people looking for accommodation online will find your hotel's website through links from other websites. Local community websites, websites with information about your destination, websites from local suppliers and businesses, websites dealing with ancillary aspects of your business (such as weddings), and other websites can all include links to your hotel's website and thus send potential customers your way. Needless to say, the more links to your hotel's website from relevant other websites, the better. Links from other websites to your own will also help your hotel's website to move further up the rankings of search engine results.
Your Website
Your website is by far the most important part of your online presence, and your best chance of attracting business from the Internet without having to pay commissions. People find your website through search engines or via other websites.
Online Booking Services
An online booking service is a company that takes bookings from you over the Internet from
Do whatever you can to take your own bookings from your own website - without paying commissions!
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your own website - and charges you a commission for each booking. The advantage of an online booking service is that they make it easier for hoteliers to accept bookings from their own websites. The main disadvantage - and it is a big disadvantage - is that you will pay a commission for every booking made from your own site. This means that effective marketing of your hotel online will result in bigger cheques payable to your online booking service. This is why having your own booking software on your own website is much preferable.
For details of online booking services and of software that allows you to take your own bookings, see our reviews of online booking services and software.
Travel Agents
Travel agents booking hotel rooms for their customers will usually find your hotel via the GDS system. After determining the customers needs they will search the system using the appropriate search criteria and key words. They will then be presented with a list of hotels matching those criteria and make their choice from there. To attract bookings from travel agents it is important to have a GDS presence and to promote your hotel effectively on the GDS system.
Some travel agents may also contact you directly or make bookings via your hotel's website (if you can accept bookings via your website). If you get many bookings from a particular travel agent it is to your advantage to encourage that travel agent to book with you directly. You'll still have to pay the travel agent's commission (usually around 10%), but you will save the GDS commission.
As use of the Internet grows the share of the market for hotel rooms booked through travel agents is gradually declining.
GDS Systems
GDS is the worldwide computer system that 600,000 Travel Agents worldwide use to book travel. Originally created by the airline industry, these systems now provide a means for travel agents to book hotels, rental cars and other travel services as well as airline tickets. Several Internet travel sites also use GDS Systems to enable their users to find and book hotels. GDS Systems can be an important source of new business. However, since you pay a commission on every booking taken via GDS it is to your advantage to encourage your regular customers to use more direct methods where possible (and its often not possible). The four major GDS systems are Sabre, Galileo,
If you get a lot of GDS bookings from one particular travel agent, contact them and encourage them to book with you directly.
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Amadeus and WorldSpan.
GDS Representatives
A GDS representative is a company that will put you on the GDS system, usually for a sign-up charge plus a commission on each booking made through the system. For details of individual GDS representatives, including their fee structures, see our reviews of GDS representatives.
Travel Websites
Travel websites are websites that act as intermediaries between your customers and your hotel. They market themselves as 'One Stop Shops' where a traveller can find and book all of their accommodation and other travel needs. Some Travel websites require that you register your hotel directly with them, while others use a GDS system to get hotel details and to make bookings. In all case, however, you will have to pay commissions on bookings taken this way. Often the main advantage that Travel websites have is their skill in Internet marketing, which often place their site ahead of yours in search engine rankings.
Intermediaries
An intermediary is any company that sits between you and your customers - and collects a commission for every booking they pass on. Intermediaries, especially Internet intermediaries, can seriously decrease your revenues if you rely on them too much. Intermediaries often block-buy rooms at large discounts, selling them through other intermediaries and having a disastrous effect on your prices. The general rule is that intermediaries should be used only where absolutely necessary.
Reservation Call Centres
Reservation call centres provide a centralised telephone reservation service through which your customers can find and book hotel rooms. They generally operate 24 hours a day and most use professionally trained telephone operatives. While the services offered and the fee structures vary among different Reservation call centres, you will generally pay a commission on each reservation received this way.
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