"We will not permit any online agent to breach our promise"
Published: 24 Jun 2008
EFT Travel Distribution Middle East 2008
Rate parity, establishing a rate structure, and the appointment of a dedicated revenue/distribution manager were some of the issues, which were keenly discussed during EyeforTravel's first Travel Distribution Middle East conference held in Dubai last week.
One of the speakers, Romain Saada, Director of Revenue Management, Shangri-La Hotel, Dubai, said his goal is to change the mindset of the head of departments on revenue management practices.
"I think our job is very much more complex. We also need to concentrate on reducing the cost per distribution channel," Saada told EyeforTravel.com's Ritesh Gupta in an interview.
Saada also spoke about RM practice, the areas which RM needs to focus upon and much more. Excerpts:
Ritesh Gupta: How do you think the task of a senior RM executive evolved in this region?
Romain Saada: There are a lot of good revenue management practitioners in the region, given the bullish market we have enjoyed in Dubai. Rather than focusing on the technical skills (Pricing, Accounts Analysis, Distribution Channels, and System Configuration), I would rather stress the point that revenue management should also concentrate on three main points: management skills, total hotel revenue management approach (Rooms, Catering Spaces, Spa and Health Club, Business Centre) and GOP contribution projects.
The position evolved as a result of the bullish market and the resultant enhanced revenue opportunities available.
Ritesh Gupta: The increment in the number of distribution channels has highlighted the significance of channel managers. How do you assess the situation today from a hotelier's perspective?
Romain Saada: Shangri-La currently uses a multi-channel system. This is a channel management platform that can manage up to 300 online wholesalers. In our property, however, we are using it to power 8-10 key third party distributors. The manual extranets are very competitive and customer savvy, so their use is not that complicated and they always run major updates to remain user friendly. Since we are using a parity rate structures, it is pretty easy to display our rates faster on all distribution channels.
If the distributors are running different rates for 3rd party online distributors, it might become a difficult task to address. I think the hotel's channel managers or distribution agents are key for revenue management / sales & marketing, provided they are multi-tasked on other relevant areas such as online marketing, pay per click reporting and anything related to rate management.
Ritesh Gupta: How can hotels take care of technology and support costs in your opinion?
Romain Saada: We constantly upgrade our system and look for areas of synergy. We recently changed our CRS provider as we intend to fully use the capabilities of our revenue management system throughout our properties. For smaller operators, they would have to think about their technology costs (PMS, CRS, Distribution channels) as it might be too costly.
Ritesh Gupta: How do you progress made by online travel intermediaries especially online travel agents in this region?
Romain Saada: According to the market managers of the major online travel agents in this region, they are generating between 15-18,000 room nights per month throughout the city. Thus, they have strong partnerships with Dubai hotels. From a revenue management's point of view, these suppliers are hotelier-friendly as they do offer flexible allocations, cut off days and pricing so we can, at any time, change the rate which is good for hoteliers and 3rd parties.
We have good relationships with our online 3rd parties. We are very transparent with them and made the rules clear from the start. They can only display rates if there is an existing contract between the Hotel and the online travel agents. Every month, we discover new websites that are affiliated with our major tour operators and in the past, we had to take stern actions to get out these sites as these tour operators breached the contract and displayed the contracted rate. We practice Best Rate Guarantee and will not permit any online agent to breach our promise.
Ritesh Gupta: Hoteliers in mature markets acknowledge that Hotel Direct channel is becoming less important as the Internet grows and single image inventory becomes the standard across all hotels. How do you assess the situation?
Romain Saada: Single image inventory is definitely a plus for a hotel company as our booking pace in the market is very short. The key to success is to get the right balance of channels and to identify the differences in each of these markets.
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