How can hotels establish customer loyalty while optimizing the cooperative relationship with third-party distribution?

How to establish customer loyalty while optimizing distribution cooperation? Marriott's secret is: implementing selective channel strategy, more distribution channels do not mean more business; Establish close ties with the best OTA; Control the distribution combination to ensure long-term interests; Strengthen the advantages of direct selling in official website; Invest more actively in direct sales to ensure customer loyalty.

The following is the full text of the speech:

Alexander Pyhan, Senior Director, Asia Pacific, Africa and Middle East E-commerce Channels, Marriott International Hotels Group

First of all, let's introduce the history of Marriott International Hotel Group. The history of Marriott International Hotel Group can be traced back to 1927. The founder of the late Marriott Group founded a small beer shop in the United States. At that time, no one knew that small-scale hot shops would become large groups in the future. At that time, there was another historic event, which influenced the later tourism history. At that time, a man started his first trip to ring the atlantic. When Marriott International Hotel Group was founded, we already had the idea of taking care of our employees and let them take care of our customers. This basic principle has penetrated into the culture of Marriott Group. We believe that the loyalty of employees will make our career successful. Marriott Group has 3,800 hotels in more than 74 countries around the world, and we have different brands, including Ritz-Carlton and other brands.

Before 10 to 15, the hotel distribution industry was not complicated and the attention was not very high. Basically, most reservations are made by consumers calling the hotel directly. At that time, some hotel chain groups had a central reservation system, which reduced costs and increased synergy. GDS has become a milestone in the hotel distribution industry. This is a B2B solution. GDS was originally used by some travel agencies, mainly for booking air tickets. At that time, hotel reservations were not so popular. Hotel reservation is only some value-added services besides air ticket reservation, only for some large enterprises. At that time, the distribution system was limited, including distribution strategy and electronic distribution, which many people were not familiar with.

Due to the development of network technology, some changes have taken place in distribution. In the past few years, the complexity has become stronger and stronger. Now when it comes to distribution channels, we should consider not only a few channels, but more distribution channels in order to better understand the characteristics and relevance of each distribution channel. We should understand that the whole distribution channel has an ecosystem, and each stakeholder and other stakeholders in the ecosystem are interdependent. Only when the ecosystem is balanced can the ecosystem function well. In other words, the success of direct booking channels and some channels depends on other channels in the ecosystem to some extent. There are more and more online customers now, and they know what brands bring through online channels. Now they may get this information through word of mouth, for example, friends of friends will give them word of mouth and make online choices in this way. Speaking of customer comments, we all know that comments are now a very hot topic on the Internet. If online customers want to see the brand of Marriott Group, they can learn about it on Sina Weibo, then check the relevant information on Ctrip E Long, and then learn about the comments about Marriott Group from other channels. This ecological relationship leads customers to the Marriott Group website step by step, but Marriott Group is not the original initiator of the reservation. As can be seen from this ecosystem, this ecosystem is constantly evolving. At present, the boundaries between different distribution channels are increasingly blurred, and many channels will overlap and overlap. The business model of most intermediary service companies has expanded to more than one customer group, which makes the boundaries between different channels more and more blurred. TMC (Travel Management) can also conduct group purchase now, and some wholesalers can provide products online. We should have good tools by now. Nowadays, price comparison websites are becoming more and more popular, and some wholesalers and travel agencies are selling their products to passengers and customers through online channels. Instead of building their own infrastructure, they use this price comparison platform. The traditional model can't keep up with the new ecosystem group, and the ecosystem of the same hotel is unbalanced due to different channels and different pricing.

Distribution sometimes makes people feel helpless, but we must implement changes so that the distribution field can keep pace with the times and adopt new solutions. Everyone has the opportunity to influence the balance of the distribution system. If hotel managers don't participate in or lead the change and innovation, others will, so that your hotel can't benefit from the new trend.

In the next part, we will discuss how to better resolve risks, seize some opportunities, and discuss what changes are taking place in customer behavior. Our relationship with middlemen is very important, which can help us to better target the target group, but the online travel field and changing customer behavior bring challenges and opportunities. The survey shows that online customers should log on to 2 1 website to get all kinds of information before making a decision. Most customers initially search websites through OTA. We can observe the funnel-shaped process of customers, the first is to understand, the second is to consider, the third is to evaluate, the fourth is to make a choice according to preferences, and the fifth is to make a purchase decision. In the whole system, each distribution stakeholder plays a unique role, which often leads to the further development of customers. We cooperate more with third-party OTA. How can we seize the opportunity at the top of the funnel and let customers follow this funnel step by step in our way? As we all know, based on the optimization of our relationship with OTA, we can better guide customers to our hotel. Now customers choose hotels just like choosing goods in supermarkets. They can shop around. OTA provides an online supermarket for customers to choose from. Now we have to consider some other factors, distribution channels and distribution maps are becoming more and more diversified, and now more channels enter the industry. However, it should be noted that the number of people traveling through our channel remains unchanged. With the increase of channels, the number of tourists in the tourism market has not increased. How to better promote sales, especially in the use of channels, promotion is very important.

Where customers shop is a shopping experience. In addition, in terms of customer loyalty, is there a better and cheaper way? It is very important to choose channels. We must be selective and strategic in the process of choosing distribution partners. How to find distribution partners is very important for hotel brands to lock in customers. Third-party distribution requires a certain cost. On the one hand, it produces costs, but on the other hand, it also brings us some benefits. Every hotel must control the combination of channels to balance the ecosystem, so as to avoid the erosion of profits. If the channel portfolio management is not good, the distribution cost will rise sharply.

How does Marriott Group resolve risks and seize opportunities? First of all, what are the main principles and frameworks in the process of cooperation between Marriott Group and dealers? Marriott's long-term principle is to sell products to customers in a way that they like. The core methods of this principle are as follows: First, a unified image database. In this way, Marriott Group enables customers to obtain the functions, services and prices of Marriott Group no matter from which channel, thus integrating usability, and we do not engage in price wars. The second is to protect Marriott Group or direct channels. We don't want to offer more price concessions to third parties. Because if we do this, the influence of our online website will be affected. If the price we offer is different from that of the third party, once the price provided by the third party is lower than ours, our customers will feel that the channel of Marriott website is not good, leading to the erosion of direct sales channels.

We will also enhance customer loyalty through the reward program. Through research, Marriott's reward program has indeed received results. We also have call centers around the world, and our delivery prices in mobile channels and all OTA channels are uniform, including room inventory. Marriott also invested in infrastructure to enable customers to contact us through XML, which improved efficiency and made our prices more uniform.

The single image library and principle and the practice of selling our products to customers in a way they like have a very important impact on the distribution system. For us, this defines several related business models and ensures that these business models can meet the basic principles and will not adversely affect our prices. For example, for example, to ensure that our official website is not damaged, we know that sometimes if some third-party websites need us to offer a very low discount, it will be very unfavorable for our direct sales in official website. We believe that this business model will have a certain impact on our relationship with OTA, and ultimately it will not bring us a good return on investment.

For our part, we still make sure that guests are very willing to contact us when they contact the Marriott Hotel website or contact the hotel directly. On our website, as you know, through our focus on website design, we have a website with China characteristics in China market, and you can learn about the characteristics of China Hotel. We know that it is impossible for all hotels in the world to provide services with China characteristics. In addition, Marriott also proposed some local solutions. We believe that, in terms of website characteristics, only internationally renowned brand websites can provide such good services. Here is an example. As can be seen from this example, we have also built our own platform and designed related mobile applications on the platform. At the end of last year, we launched mobile applications for iOS and Android. You can use mobile devices to visit our website to learn about Marriott Group. The last thing I want to say is the incentive plan of Marriott Group. Marriott Group's reward program builds and deepens customers' loyalty to us through different methods. As far as we know, there are 40 million members in the world, and China has1.4000 members. In the whole industry, we have also won many awards in the frequent flyer program. According to statistics, 50% of the night trips come from passengers who participate in the incentive plan. In addition, Marriott provides customers with a unique experience through the reward program.

Summarize what I introduced today, including how to improve the cooperative relationship with third parties, maintain the healthy development of sales channels, maintain customer loyalty, and attach importance to the relationship with third-party partners. We also believe that more distribution channels do not mean more business. First of all, Marriott Group should adopt a strategy according to its core principles. Second, we should maintain good relations with the best OTA partners, especially strategic partners. Everyone should be responsible for each other and have the same goal. Third, we should have a good distribution mix, which can ensure the long-term profitability of Marriott Group. It is very important for us to realize that too many channels may affect efficiency or have some impact on business model. Fourth, never let the direct selling channel be at a disadvantage. Fifth, invest more in direct sales channels, which can build customer loyalty. Finally, at the end of my speech, I quoted the founder of Marriott Group as saying that innovation is so important and success is endless. Thank you all.