Top Metrics You Need to Measure for Distribution Performance
When it comes to your hotel’s distribution performance, you need to be sure that you’re using the right metrics to measure it. This is because tracking the right metric across distribution channels can pinpoint operational or business inefficiencies that might be impacting revenue. As such, this enables you to optimise the performance across your different distribution channels, which is becoming even more important as the market swiftly changes, online travel agencies (OTAs) consolidate and mobile bookings continue to expand at extreme rates.
Each of your distribution channels has a different cost and will deliver a different ratio of profit in return, so it’s important that you’re constantly choosing the right mix of channels in order to give yourself the best possible profit. The easiest task will be to differentiate between the best and worst performing channels, but it might not be as easy to decipher the success of some others. According to Matthew Goulden, managing director at Triometric, there are five critical data sets derived from XML transaction streams that are essential for every distributor when it comes to managing daily distribution challenges.
It goes without saying that there are times when a timeout cannot be avoided, due to networks, servers, applications and even errors in requests. Because of this, there are times when customer requests won’t be able to get through, which can cause a missed sales opportunity. So that you are able to mitigate the adverse impact of timeouts, your distributors need to be alerted to when a timeout happens, pinpoint why, where and how it happened and then fix it as quickly as possible.
The health and performance of your systems and end-user experience can be measured by its end-to-end speed. If you find that response times are consistently poor, then this could be costing you money. The distributor needs to know how long it takes to process requests, or how often timeouts occur. It’s important that you look at the exact percentages of this data rather than the average over a period of time, as the average isn’t really accurate for a business that’s very much driven by speed. For example, you’ll find that looking at a 90 percentage view will much more accurately show the number of timeouts than an average view, where a number of timeouts could disappear from the graph and literally end up off the radar.
It’s important that your distributors have an up-to-date inventory at all times to ensure that they’re able to continue to offer your hotel rooms to guests. It’s actually very common that they end up showing zero availability, when in fact there are rooms available. Monitoring system performance, error-checking XML messages, and analysing real-time search to keep inventory levels in line with demand, are three simple data-gathering steps that can save a distributor millions in annual revenue.
When you’re using different suppliers, a range of room types and even hotels in varying locations, you may have a range of costing and pricing structures. You need to be sure that you’re staying on top of the margin variations between the price you’re selling to the distributors and the price that the guest is paying, particularly when you’re selling the same room at different costs to a range of distributors. Optimum margin management is all about trying to sell rooms at the best prices for the lowest cost – also taking into account the speed that they’re sold.
Revenue per search
It’s also extremely important to consider your look-to-book ratio. This is how the industry measures activity levels between trading partners, although it doesn’t accurately represent the contribution of different channels. The number of searches made by consumers continues to rise, as does the overhead of managing them, so it is important for distributors to know not only who is hitting their systems with requests but also the quality of those requests in terms of delivering revenue. The most accurate measure of this is to look at each distribution channel separately, evaluating their own revenue per search, rather than all together as an average.
By accurately measuring each of these metrics, you can much more easily measure the performance of your different distribution channels. This way, you can see which channels are performing best, and therefore make changes to your distribution strategies to try and get the best possible results.