The Importance of a Balanced Distribution Network

9 Mar 2017     |    Taz Bareham

The key to creating a successful distribution network is to diversify the types of agents that you work with on a daily basis. If all of your bookings are coming from your hotel website and one well-known OTA, you might be setting yourself up for challenges in the months and years to come. When you develop a distribution network that is balanced, you will be protected from the downturn that can occur if you rely solely on one type of distribution channel. For example, if that OTA goes belly-up, then you would be left without a significant number of bookings, and it can be challenging to create a new distribution network in a short amount of time.

Why is a Balanced Distribution Network Essential? 

  • It allows your tour and activity company to reach travelers in every type of market segment around the world. Your independent marketing and promotional materials will not reach every type of interested traveler. When you create a balanced distribution network, you can connect with agents who specialize in working with niche travel markets. These markets are not always easy to reach or identify, so this is a valuable benefit of any distribution network.
  • It prevents you from relying too heavily on one distribution agent or one channel. As the old saying goes, you don’t want to put all of your eggs in one basket. If one distribution agent stops producing a significant number of bookings for your tour and activity company, you can rest easy knowing that you have many other agents within your network who will fill in the available spots on your tours.
  • It helps you to avoid spending too much on commission fees. Different types of distribution agents will require you to pay various commission rates. OTAs, for example, have higher commission rates than other independent agents, but it can be worthwhile to partner with them in order to reach their expansive travel audiences. By balancing your distribution network, you won’t get stuck paying high commission fees to every type of agent. You can spread the fees out amongst your entire network in order to maximize the revenue that you generate per booking.
  • It gives you an opportunity to build a global brand identity. The more agents that you are able to include in your distribution network, the more noteworthy your brand will become within the industry. Not only are you increasing your brand awareness amongst travelers who are visiting your destination, but you’re connecting with industry professionals who can help you grow and succeed.

You aren’t going to be able to create a distribution network overnight. However, Rezdy can help you design and implement a distribution strategy that allows you to frequently connect with new agents and increase your bookings. Rezdy offers an innovative Channel Manager that allows you to easily manage a larger distribution network by offering every agent real-time information about your live availability. The Rezdy Marketplace is also the world’s largest single network of agents and suppliers all pooled together to let agents and suppliers network and thrive. To learn more about Rezdy and the importance of creating an effective distribution strategy, download our distribution ebook now.

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