How can Hotels gain Control over

Distribution Channels?

Alex Zheng

Chief Brand Architect, Plateno Hotels Group

Sep.11, 2013

Distribution Channels such as

OTAs have grown rapidly

In recent years

，

1

OTA's hotel business saw rapid growth

Global： Mainland China

： 2011H1-2013H1 OTA Hotel Revenue 2011H1-2013H1 OTA Room Night Booking

In Ten Thousand Room Night

Data Source：Travel Click Data Source：ctcnn.com

2

In Millions USD

Emerging online distribution models

Group

Buying

Last

Minute Vague

Pricing Reverse

Auctions

Hotel’s

Revenue

Management

3

4

Global：

Data source：Travel Click

Hotel Revenue by Channel

Hotels’ reliance on distribution channels

has increased

4

Web

CRO

GDS

OTA

Direct

Web—brand web site CRO—central reservations via voice, chat or email

Direct—walk-ins,direct call in

2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2

24.6% 25.3% 21.2% 25.5% 25.0% 25.8%

15.7% 16.1% 16.9% 15.4% 14.5% 14.6%

27.6% 26.8% 37.1% 27.9% 27.7% 26.6%

10.7% 12.3% 11.1% 12.2% 12.0% 13.3%

21.4% 19.6% 13.7% 19.0% 20.8% 19.6%

Mainland China：

Sales Channel by Hotel Type

Data Source：iResearch China Hotel Sales Channel Report of 2012

Hotels’ reliance on distribution channels

has increased cont'd

5

6

How should Hotels Cooperate

and Compete with OTAs?

Response,

8

In life, Brands induce different feelings

7

9

Why do consumers pay 250% higher for a

cup of Starbucks Coffee？

Treat

Myself

Good

Taste

Pretend

to be

Cool

+60% +50%

+55%

RMB 9 RMB 33

+45%

+40%

8

Economic

Price

Petty

Bourgeois

Sentiment

Social

Coffee

Culture

Brand

Feelings

Social

Status

9

Is it sufficient for Hotel Brands to just satisfy

customer’s functional needs?

When the functional needs of customers have been

satisfied,they need more …

Culture

Preference

Minds

1

2 3

Multi-industry

interaction increases

customer loyalty

Multi brands meet

various demands

Creativity –Soul of Brand

10

Characterized brands

through defining life-style

Brand

Soul

Originates from Portofino in Italy.

Abandon excessive luxury, back to pure life .

Focus on core requirements on hotel.

Respect and cherish each noble and free soul…

11

Portofino-- A Paradise for Private Enjoyment, A Harbor for Your Soul

With the core of comfortable culture

Lavande-- Experience-oriented

Boutique Hotel

12

Featuring natural fragrance, Lavande

provides a extremely comfortable resting

space with considerate 3-dimension

caring---breath, sleep and feeling.

Perfect combination of coffee

culture and hotel experience.

China's first new service model of

mid-scale boutique hotel, which

creating an elegant atmosphere of

humanity, social life and style to

free yourself.

James Joyce Coffetel

--Journey within Coffee

13

Z M AX , the FUNNEST

& trend-leading hotel in the

city

ZMAXERs are always following their own

heart, refusing constraints and pursing unique

character.

ZMAX defines new concept of hotel, and

creates Z-life style for freedom-hunters ---

ZMAXERs.

14

Strong brands leverage internet channels to

become easily accessible and searchable

Baidu...

B2C...

OTA

Qunar... •Brand.com

•M.com

•APP

Social

Media

Mobile

Channels

• WeChat

• Microblog

Hotels introduce customers to their own online

platforms via direct and non-direct channels

16

Data Source：7 Days

Direct Channels include website, mobile

website and APP

2012 7 Days Booking by Channel

Hotel

Offline multi-industry cooperation enhance

customer loyalty

10 Points

Integrated Membership and Points

Management Platform = RMB100

Hotel brands can offer more Value-added Service based on their

membership system

17

10 Points 10 Points 10 Points 10 Points 10 Points

Conclusion

• Strong brands conduct consumers’ purposeful decision

making in their hotel selecting process rather than solely

leaning on OTA’s recommendation;

• More comprehensive and interactive member loyalty

programmes combining with hotel’s efficient direct sales

channels will increase customer’s brand loyalty.

Q&A

What else could brand and membership

bring to a hotel ？

Thanks for your attention！