Distribution Channel Analysis

s.genchi
Mind Map by s.genchi, updated more than 1 year ago
s.genchi
Created by s.genchi about 6 years ago
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Distribution Channel Analysis

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Distribution Channel Analysis
  1. Profitability and what the industry can expect in the near term in the distribution landscape.
    1. Hotel Business Environment
      1. Profitability and what the industry can expect in the near term in the distribution landscape.
        1. Hotel Industry Size and Structure.
          1. This section will review five widely studied performance metrics. They are room supply, room demand, occupancy, ADR, and Revpar.
          2. Supply
            1. U.S. lodging industry currently has just over 52,000 properties with 20 or more rooms in which there are almost 4.9 million hotel rooms. The 20 years the room supply in the United States has grown to the current level from 3.3 million rooms in 1990, an increase of almost 50% and a compound annual growth rate of 1.9%.
        2. Demand
          1. Turning to room demand, an examination of Exhibit 4 reveals strong and steady room night demand over the past 20 years, growing from an average number of rooms sold per day of 2.1 million to almost 2.8 million today.
          2. Occupancy
            1. Over the past 20 years, U.S. hotel industry occupancy has fluctuated as the combination of supply additions and the economic influences on demand took their turns being the major driver of this key measure
            2. Average Daily Room Rate
              1. U.S. lodging industry to have truly outstanding performance, increased revenue and profitability need to come from a combination of having more guests in their rooms coupled with increasing room rates
              2. RevPar
                1. RevPar combines the effects of both occupancy and room-rate performance, its level and movement over time is often used to gauge the general health of both the industry and individual hotels.
                2. Price Elasticity of Demand
                  1. Refers to the percentage change in demand generated by a percentage change in price.
                  2. Merchant – hotel receives net rate after intermediary get compensated based on negotiated percentage with the hotel.
                    1. Retail – intermediary is compensated on a commission basis based on a pre-negotiated percentage. The commission is paid by the hotels after the total room rate is sent to the property
                      1. Opaque – bidding method, brand not disclosed to consumer until after sale, hotel gets pre-negotiated rate with vendor. Vendor keeps difference between what the guest pays and the pre-negotiated room rate. Typically, the percentage of the room rate keep by the vendor is in the range of 35% to 50%.
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