Hotels connectivity, a stake for the whole travel industry

06 fév. 2011 | Written by Julia

In the Thirties, Conrad Hilton used to say that hotel’s performances relays first in the “hotel location”, secondly in the “hotel location” and third in the “hotel location”. This adage is still true, except that the location is not anymore physical. Indeed it plays out on the web; online visibility ensures the hotel occupancy, thereby the hotel owner only has to focus on the profitability.

I agree this version is a bit simplified. However, it is true that before starting a yield or a CRM strategy, the e-distribution must be optimized, which means that  hotel rooms must be available in electronic channels. If we consider that 84% of the hotels’ customers only search their room on the Internet (Source Coach, Omnium), we better understand the issue of hotels connectivity.

Hotel reservation channels – From the hotel point of view

An hotel can sell rooms through direct channels (walk-in, phone, own web site…) or through a third-party (hotel chains, hotel booking specialists, OTA…).

Direct sales are the simplest. However, even with the perfect marketing strategy, they are not enough to fill all the rooms of an hotel. Indeed, to answer the needs of diverse customers, an hotel must be presence on diverse distribution channels (the locations!).

To be on several distribution channels, there are two methods: filling manually several web planning or using technology.

Technology has a cost. In fact, it represents an investment for a hotel. At the same time, it allows hotels to save time (web planning are a fastidious work) and improve the quality of information (more updates, more flexibility, less errors and the ability to receive bookings until the last minute with no overbooking risks).

The channel management solutions: updaters and switch.

The channel management solutions are tools to update rooms’ prices and availability on several channel. They are a double issues in Europe.

Indeed, 80% of the hotels are independent hotels (in contrast with the North American hospitality industry). Independents can represent 89% of the offer in some country like France. So, on the top of making e-distribution possible, channel management solutions participate also in standardizing the hotels’ offer.

The first generation of channel management tools are the updaters. They allow hoteliers to update several distribution channel from a central point. However they only offer a one way connectivity, which means the solution doesn’t handle real time bookings. The reservation are received through fax or email.

The second generation of channel management systems offer 2 ways connectivity.  They can be called “switch” or 2 way connectivity platforms and they are the most powerful (but also the most expensive).

The information flows in two directions between the hotel PMS and third parties allow the hotelier to update availability and rates without the need to split the inventory between channels and with no risk of overbooking.

Overview of the main players offering hotel connectivity in Europe.

Company Fastbooking eRevMax
Category Updater Updater
Creation date 2000 2001
Historic Originaly it was positioned as a service company facilitating direct bookings (booking engine, online marketing services…).

Now, the company has become a specialist of hotel online reservation and on top of its previous services, FastBooking offers a channel management solution and a tool to compare competitors’ inventories and rates.

RateTiger is the flagship product of the company. It has allowed eRevMax to become a major player in hotels’ rooms online distribution; and at the same time has supported the development of associated solutions (as for example RTConnect, a 2 ways channel management solution).
CM solution Fastbooking Updater RateTiger Channelmanagement
Business model Commission Annual cost between 99€ and 199€ (depending of the product version)
Number of customers (hotels) 6000 hotels - – -
3rd party resellers connected 100 sites 600 sites
Company AvailPro Interface Technologies TouriSoft
Category Channel Manager Channel Manager Channel Manager
Creation date 2001 1998 2001
Historic The company was originally specialised in connectivity with distributors. In 2008, to expend its activity Availpro started to focus on PMS connection. Firstly preoccupied in centralizing inventories (connecting PMS with chains’ CRS), Interface Technologies has now a strategy rather oriented in third party web sites connection.

They consider hotel direct reservations as essential and have adapted their business model to support this approach

Initially specialized in IT solutions for tourism offices, the company widened his activities in 2007 with the launch of Hotel Spider.
CM solution The Smart Channel Manager® ExplIT Hotel Spider
Busines model 2.50€ per room reserved.

No entry fee, no annual fee.

Fees per 3rd party connected + 2.50€ per booking (with fee ceiling) Annual fee (50€ per 10 rooms) + 0.50€ per night reserved
Number of customers (hotels) 7500 hotels 12000 hotels from chains + independant hotels 2500 hotels
3rd party resellers connected Booking.com, Venere, HRS, Atrapalo, Expedia, Hotel.de, Hotels.com, LateRooms.com, RatesToGo, Easytobook, BudgetPlaces.com, Guides de Charme, Paris Hotels Booking, HotelaParis.com, HotelsChart.com, ToBook, UniTravel, Cybeasion.fr, Hotelbook, France hotels online, Heart of Paris Hotels, France.com, Francehotelguide, 123France, Prestigia

+ 4 GDS

AfricaResa, Ambiance Travel, Booking.com, CDS Groupe, Club Hotel, Expedia, Federal Hotel, French Travel Connection, hotel.de, HRS, La France du nord au sud, Locasun.fr, Myboutiquehotel.com, Original France, Safarclick, Solar Tours, Transat, TransHotel, Venere, ViaMichelin, Weekenddesk.fr, Wonderbox

+ 4 GDS

Atel, Atrapalo, Berlin Tourismus, Booking.com, Bookit, Bookyourhotel, Budgetplaces, Caesar-Data, Easytobook, Ehotel, Expedia, Feratel, Globres, Holidayinsider, Hostelsclub, Hotel.de, HotelSpecials, Hoteladvisor, Hoteliers, Hotelletje.nl, Hotels.be, Hotels.nl, Hotelschart, HRS, LateRooms.com, Nethotels, Pegasus, RatesToGo, Reconline, Roomgenie, Switzerland Travel Centre, Tobook, Tomas, Venere, Weekendcompany, Weekendjeweg.nl

+ 4 GDS

PMS connected Infor SoftBrands, Fiducial, Micros Fidelio, MediaLog, Vega, HotSoft, GHM Gesthotel, MultiMicro, Cudbe, He Hoteleasy, SoftInn, Jazotel Winhotel(CEGID), Fiducial V3, Infhotik, Hotel , Vega, Bentisoft, SoftInn, MultiMicro, Micrologic, ADN, Informatique, GHM Gesthotel, Chloé, Hop Hotel Planning, Orchestra Hôtels Betisoft, Elite solutions, Hotline Hotelsoftware, Netspirit-Zeeland, Planet WInner, Protel Hotelsoftware, , WebPmsPro

Note : Amadeus also includes a channel management solution  (Amadeus Hotel Distribution) in Hotel Platform.

This stake of connectivity is mainly present in the hotel industry. Several IT players are positioned on this gap and we can say that they are now entering a consolidation phase. Thereby, the next big issue should be the integration of campsites and holiday residences’ products that are even less standardized.

7 comments about “Hotels connectivity, a stake for the whole travel industry”

  • gds dit :

    Excellent review of channel managers in the market. The list is not complete but covers some of the fast developing companies. Interestingly, all of the channel managers offer GDS update as well.

  • Julia dit :

    Hi Nameless,
    Thanks for your comment. What is exactly the role of you company? How do you rank among the technological players of the hotel industry?
    Thanks,
    Julia

    PS: it would have been nicer to say who are the missing channel managers rather than sayins « the list is not complete »

  • Aliesha dit :

    An important one that is not being covered here is RateGain’s ChannelGain which is used by more than 6000+ hotels worldwide that covers some of the top hotel brands as well as mid-sized groups. It has a huge network of 3rd party resellers and is connected to some of the leading PMS and RMS system providers.

    Aliesha

  • Julia dit :

    Hi Aliesha,
    Thanks for the extra information. It looks like RateChain is quite big. From which markets are the hoteliers using your solution?

  • Uday dit :

    Hi,
    Thank you very much for the article. It was really informative. I am an MBA student currently researching Channel Managers. Do you know if there is a repository anywhere that has a complete listing of Channel Managers (Either Global or regional)?
    Any help would be greatly appreciated! I´m just hitting a wall right now.
    Thanks,
    Uday

  • Julia dit :

    Hi Uday,
    Unfortunately, I did find any repository of that kind.
    However, a good way to get an exhaustive list should be to contact the people in charge of connectivity in the main hotels specialists web sites and/or online travel agencies. They often have in their “hotels relation team” a person in charge of connection with channel managers and this person should know this info for his main markets. You can find them under the title Hotel Account Manager or Connectivity/Interfaces Manager.

    Good luck and please don’t hesite to share your findings ;-)

  • Hi Uday,
    You can check the list here (not 100% complete):
    http://www.cultuzz.com/hotel-channel-management
    OnlineGDS is going to launch its channel manager solution very soon as well. (not in the list yet).