Distribution, big data, hype and the need for speed
Posted on 27 Jan, 2014
An accommodation distribution agency says the industry must enjoy and embrace change
The way hotel organisations and other accomodation providers manage and supervise their distribution mix varies from market to market. While some are adept at handling issues like contracting, pricing, distribution and content, for others that isn’t that easy especially given the emergence of new channels. But should suppliers outsource their distribution operations or not? EyeforTravel’s Ritesh Gupta talks to Sascha Hausmann, CEO, Busy Rooms, an accommodation distribution agency to find out.
EFT: In 2013 what would you count as major developments in hotel distribution?
SH: Followed by a couple of significant transactions in the metasearch sector in late 2012, 2013 has seen more discussions on alternative distribution besides the regular and traditional OTA business. Consumers like the fact that products can be easily compared. The discussion heated up further when TripAdvisor announced it’s entry into the metasearch arena with an even clearer focus on direct hotel website bookings achieved by connecting hundreds of booking engines. Another topic, in 2013, just like in 2012, has off course been the continuous hype around smartphones and their impact on the travel booking market.
EFT: So what major trends do you forecast for 2014?
SH: I see three in particular:
•As in previous years, continuous growth in mobile and a shift from web-based to mobile web-based
•A focus on direct distribution fostered by metasearch
•Rate parity will become a tool used by hoteliers rather than forced by OTA/tour operators
EFT: What it comes to optimising the effectiveness of all distribution channels what are your recommendations?
SH: One of the most important things is to have the right distribution mix. Only four to five years ago we discussed what mix of online travel agencies you should have. Nowadays the right mix goes beyond that and hotels have to pay attention to other avenues of booking providers like the metasearch engines, lastminute booking apps - nothing new but reviving it seems - and online advertising options.
Target customers don’t easily group themselves around a specific set of channels anymore. Instead today’s consumer uses a broad range of outlets. That means that hotels have to spend time to explore and manage those.
EFT: How should you go about maximising the potential sales on all available channels in real-time?
SH: You need to have a system that allows you to centrally manage a variety of different outlets both in terms of availability and pricing. The channel management industry came into existence to solve that particular problem, but they have not progressed from just being an online travel agency management tool. The next generation of channel management will be able to go far beyond just managing the online booking sector, but will also allow for centralising online marketing opportunities and direct consumer traffic while providing detailed performance metrics and market intelligence. They will be more a competency centre than a service tool.
EFT: When it comes to extending distribution reach and targeting incremental revenue, where is there room for improvement?
SH: Besides the industry working on standards and simplifying technology and interfaces, we want to see channel management evolve from a standalone product to a tool that is used within a wider range of distribution management. The future really lies in combining different technologies into one system that is easy to manage, rather then reinventing the wheel. By combining best of breed in channel management, revenue management and customer review management technologies into one system, hoteliers can reach a wider audience more easily.
But all the technology will only work if we provide hotels with what they need first. By this I mean the knowledge and access to the channels that technology will help to maintain. We believe that technology in the future will require services built around it.
EFT: In your view, when it comes to new avenues for revenue generation - like mobile distribution or big data/analytics for upselling - where does the industry stand today?
SH: Currently mobile is a new and ever-changing platform for reaching consumers. There are lots of immature options and hoteliers are only just beginning to discover what is available, never mind what is most effective. Mobile bookings continue to grow year-on-year and its important that hoteliers are able to offer direct booking via both mobile and social media. But first they need to learn and understand what the obstacles, challenges and opportunities are. And they need help through this jungle of offerings.
We believe big data still needs to be properly defined before you can decide a logical route forward.
Right now the industry still loosely uses the term and there is a sudden hype. Time will tell.
EFT: Is understanding the booking funnel the secret of a strong distribution strategy?
SH: Of course, by understanding the booking funnel in more depth hoteliers can strengthen their distribution. Better knowledge of a consumers thought process leads to more effective distribution by feeding the right information to the right consumer at the right time. Consumers need to be handled throughout the shopping process from exploration to booking, during the stay and after. It is about helping the customer at every stage of the journey with tools that provide content, access to various outlets, reports to monitor satisfaction and dashboards that compare to competitors.
EFT: Are distribution executives doing enough to embrace changes – like the impact of social media on a hotel’s pricing strategy?
The hotel industry and its executives have to understand that times have changed. The internet has infected the travel industry with a bug called speed. Today we don’t see changes in a matter of years but in a matter of weeks or days. There are new ideas every day and consumers like jumping from one trend and hype to another.
Travel executives have to continuously educate themselves, enjoy and embrace change. Only when new opportunities are seen with excitement rather than disgust will distribution managers learn to cope and make the best out of a market that has a lot to offer for the one that is willing to adapt.