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Automation is on the up and could hold the key to increasing online sales
IN-DEPTH: With so many channels to track on daily basis, it can be a challenge for hotel companies to know what’s being offered in the multi-channel environment. However, technology has evolved considerably to keep distribution and revenue management executives updated, writes Ritesh Gupta.
In today’s multi-channel environment, hoteliers need to have quick access to hotel-rate data and inventory positions on various sales channels. With online sales bringing increased revenue, hoteliers need to proactively manage their online presence and ensure that room rates and availability accurately reflect the hotel’s current status on all sales channels.
The process of doing this manually is now a thing of the past and even using separate pieces of software to manage different aspects of online sales is being phased out. In fact real-time XML connectivity with channels and optional integration with revenue management and property management systems is allowing hotels to respond to market conditions and process rate and inventory updates faster than ever before.
“Over the last couple of years we have seen an increased focus on integrated applications, allowing hotels to do most of these complex tasks through a single system,” says Michael McCartan, chief executive officer, eRevMax International.
According to McCartan, a single system will save time, reduce costs, and enable revenue managers to focus on the data at hand in order to make better judgments based on the information in front of them. Consolidating this data into a single integrated system prevents simple errors and applies restrictions to protect the hotel. Also, decisions will become quicker and more dynamic as the hotelier can focus on a wider strategy remit, says McCartan.
Responding to market needs
Sudhir Ghildiyal, revenue manager - corporate (electronic distribution), The Lalit Suri Hospitality Group, says in the last 12 months, OTAs have taken up rate parity aggressively, thereby putting pressure on the hotels to maintain the same rate across all channels. This is where the role of channel management technology comes in.
“Channel management solutions have really helped hoteliers to cope with that pressure,” says Ghildiyal. “With online revenue registering a high growth year-on-year, it becomes crucial to follow rate parity to ensure higher rankings on the OTAs. Moreover, it really helps in keeping a total control of your inventory across all channels..
Kumar Subramanian, head of sales and revenue management, Royal Orchid Hotels, says revenue managers should abstain from becoming mere “Extranet Managers”, and focus on revenue management instead.
“The technology we now have, RT Channel manager, has created more time for hotel professionals to implement real revenue management ideas,” says Subramanian.
McCartan says hotels have moved from a strategy of selling on as many channels as possible, to being focused on the best producing sites for long-term financial gain and inventory management. “Today, the reservation data and channel margin is providing the insight required for selecting the most profitable channels rather than getting distracted by the hundreds of new channels promising gold,” he says.
Hotels have also had to control rate parity and provide inventory to all partners to avoid breaching contractual obligations, and therefore the advancement of technology in this space is solving these problems, adds McCartan.
What to look for?
Hotel companies have to diligently assess technology that is available for automating their distribution and reservations systems.
Some of the major considerations are:
· Technology or solution has to be more price sensitive considering the cost of online distribution
· It should be robust to interface with any PMS/ CRS/ CRM technology irrespective of the service provider
· Mobile and tablet tools are evolving and technology should support such systems, not just technically, but with a strategic viewpoint to business.
A channel manager for hotel companies is a key component in hotel distribution and revenue management, and therefore it’s imperative that the solution chosen is user friendly, reliable and saves time.
Live market information
Today there are channel management solutions that can consolidate live market information, so revenue managers can stay at the top of their game without losing position or revenue.
The live status of room rates alongside web ranking reports provides the state of play, availability figures based on inventory supply helps to show which channels are bringing bookings, while booking data delivery ensures all reservations reach the hotel as and when they happen.
According to McCartan, products are becoming more user-friendly as a wider cross-section of hotel staff use these tools; from front of house, general manager and revenue management specialists. Therefore navigation needs to be simple for all, making quick updates easy and providing comprehensive settings between rate shopping and channel management for more sophisticated sales strategies. The inclusion of historical reports, reservation data and administration functions also provides greater control to the OTA sales channels.
“The automated nature of the next generation of tools means hotels need greater protection from overselling, therefore safeguards built into the tools provide alerts and notifications of channel performance and manual overrides when certain conditions are achieved,” says McCartan. “A focus on XML integration providing two-way data transfer is giving greater access to OTAs, especially by delivering automated channel solutions including inventory distribution and removing the manual error-prone task of reservation and guest data entry by supplying OTA booking data direct to the PMS (property management system).”
With the new generation of channel management tools, hoteliers are now able to maintain various channels with all necessary data at their fingertips. These tools not only allow them to keep things much simpler, but also to have greater foresight. Today hotels have much better exposure; they get business from many markets more easily and a lot quicker.
The future of automation
The technology available to help hotels automate their distribution and reservation systems is still evolving, but significant progress has been made in this direction.
“Compare the time when reservations were made over the phone three to six months ahead of the stay to today’s scenario where a guest can make a reservation online or through mobile even on the day of the stay. It is all thanks to automation that hotels can make availability updates in real-time and guests can make reservations on the move which are fed into the hotel’s PMS directly,” says McCartan.
In terms of the growth of automation, there needs to be more two-way connectivity, especially as the data demands get bigger and more intelligent. Hotels want to see live-rate data and will update room rates more and more regularly. While there are automated pricing and inventory distribution technologies, and booking data delivery options, much of this still requires other PMS, RMS and OTAs to play their part in achieving this.
The sooner technology companies work together, the faster automation will grow.