Hotels connectivity, a stake for the whole travel industry
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.
|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|
|Category||Channel Manager||Channel Manager||Channel Manager|
|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.