Optimising the utility of hotel online distribution channels

• Main Author: Zhang, Yixin
• Other Authors: PARK, Sangwon ; EVES, Anita
• Published: University of Surrey 2016
• Subjects: 647.94
• Online Access: http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.698623

Distribution channel plays an important role in the operation of hotel revenue management (RM), it is a key vehicle that can facilitate effective communication of the whole RM strategy, which helps hotels to accomplish their ultimate goal of revenue maximisation. However, the importance of distribution channel management in hotel revenue management has not received much attention in academic research (Ivanov and Zhechev, 2012), and there is a lack of studies relating to distribution channel selection and optimisation (Guillet and Mohammed, 2015). In addition, with the increasing popularity of the Internet and the rapid development of information technology, online distribution channels have been intensively promoted by hotel companies in the contemporary business environment, and these have been well received by customers (Masiero and Law, 2016). Accordingly, this research is aimed at investigating the functions of hotel online distribution channels (hotel’s own website and OTA websites), and to examine customers booking intention toward each of these two distribution channels. The overall results of the present study could help hotel companies to optimise the utility of their online distribution channels, thus to achieve their ultimate goal of revenue maximisation. In this research, there were three studies were conducted to fulfil the investigation. The first study was a qualitative study with hotel experts, based upon the method of semi-structured interview, which examined the functions of hotel online distribution channels from the organisational perspective. The second study was a qualitative study with hotel customers, based upon the method of focus group interview, which examined the functions of hotel online distribution channels from the customers’ perspective. Thus, the findings could verify whether the functions that were highlighted by the companies were actually approved by the customers. The third study was a quantitative study with hotel customers, based upon the method of survey questionnaire, which provided a further insight into customers’ booking intention toward hotels’ own websites and OTAs respectively. Based upon the qualitative studies with hotel experts and customers, 6 functions of hotel online distribution channels were identified: information, communication, promotion, security, relationship building, and payment. All these identified functions were verified to exist in both hotels’ own websites and online travel agent websites, but some functions might be performed better by one of the distributors than another one. For example, hotels’ own websites provide more detailed information about an individual property, but OTAs offer easy comparisons; hotels’ own websites have better performance in personal communications, while OTAs are good at mass market communications. The results of the quantitative study shown that attitude carried the most weight in explaining the intention of customers to make bookings via hotels’ own websites. Therefore, for the distribution channel of hotels’ own websites, hotel managers need to pay more attention to the factors that contribute to the generation of favourable attitude. In the OTA group of the present study, perceived behavioural control carried the most weight in explaining the intention of customers to make bookings on OTAs, which indicted that perceived behavioural control was the most important determinant that affected the customers who used OTAs to place hotel bookings, and these OTA customers felt confident and in control of using the distribution channel. This research provides the theoretical contribution to the literature. Firstly, by taking into account the issue that distribution channel has been overlooked in the literature of RM and the trend of online distribution channel, this research contributes to the knowledge of online distribution channel in hotel RM literature. Secondly, this research has adopted the perceptions of both hotel-related companies and hotel customers in generating comprehensive knowledge about the functions of hotel online distribution channels. The results of the overall study also offer important implications for hotel companies, which enable them to clearly understand the strengths and weaknesses of their own websites and OTA websites. As a result, they can set up efficient strategies to optimise the utility of both their internal and external online distribution channels, which for the purpose of maximise their total revenue.