Sample interview questions: How do you handle pricing and revenue decisions for different distribution channels, such as direct bookings versus third-party websites?
Sample answer:
Pricing and Revenue Decisions for Different Distribution Channels
-
Direct Bookings
-
Pros:
- Higher control over pricing and availability
- Improved customer experience and loyalty
- Increased opportunities for upselling and cross-selling
- Lower distribution costs
-
Cons:
- Limited reach to potential customers
- Increased marketing and advertising expenses
-
Third-Party Websites
-
Pros:
- Wider reach to potential customers
- Reduced marketing and advertising expenses
- Access to new markets and customer segments
-
Cons:
- Lower control over pricing and availability
- Increased competition from other hotels
- Reduced profit margins
- Potential damage to brand image
-
Strategies for Managing Pricing and Revenue ACROSS Distribution Channels
-
Parity Management:
- Monitor and adjust prices across all distribution channels to ensure consistency.
- Use technology to automate the process of updating prices.
-
Segmentation and Targeting:
- Identify and target different customer segments with tailored pricing strategies.
- Offer exclusive rates and benefits to direct bookers.
-
Dynamic Pricing:
- Adjust prices based on factors such as demand, seasonality, and occupancy levels.
- Use revenue management software to optimize pricing decisions.
-
Bundling:
- Offer bundled packages that include room rates, meals, activities, and other amenities.
- Use bundling to increase perceived value and drive bookings.
-
Flash Sales and Promotions:
- Offer flash sales and promotions to generate interest and drive bookings.
- Use promotions strategically to target specific customer segments or fill occupancy gaps. Read full answer