Distribution challenge: how OTAs are making appropriate use of online technology
INTERVIEW: To ensure the best possible yield for hotel partners, online travel agencies (OTAs) must ensure that they are compatible with most of the key channel management solutions. At the same time they must aim to increase accommodation choices for travellers.
The ultimate aim of the OTA is to expand their global coverage to offer a range of properties from ordinary global chains to elite hotel groups and unique, independent hotels around the world.
With this in mind EyeforTravel’s Ritesh Gupta talks to Matthew Harris, executive general manager - EMEA & Americas at The Wotif Group about what he believes are the latest developments in online distribution technology.
EFT: How do you think online distribution technology has evolved in the last couple of years?
MH: There are a few developments I’d like to highlight. Firstly channel management tools and yield management solutions have become far more intuitive. This means that hotels can now execute their online strategy in a more nimble fashion than they were able to in the past. It is now much easier for a hotel to enter their distribution to the outside world at a single or minimal point of entry.
Take a hotel with, for example, connectivity with Trust (Yourvoyager) as their central reservation system (CRS). Through Trust’s seamless connections with multiple Internet Distribution System (IDS) & Global Distribution System (GDS) channels, that inventory can be all over the world in seconds. Five years ago that hotel probably had to update about half a dozen channels individually, which may have taken them all day. They also might have a yield management tool, such as IDeas, connected to the API, which will automatically ensure they are entering the right rates based on demand, historic data and seasonality.
Essentially all these tools (CRS/ GDS/ Channel Manager’s/ Yield Management systems and so on) can now be seamlessly connected giving the hotelier a lot more time to strategise and ensure they are getting the right blend of occupancy, rate and cost of sale.
Secondly I also think the GDS has become a lot more industry relevant and has evolved to be more OTA-centric at the nuts and bolts end. A couple of examples could be the Travelport ‘Rooms & More’ product which is essentially pushing all those OTA channels to travel agents (booking/ late rooms/ hotel reservation systems and so on) and working on a flexible and changeable commission model. The GDS’s have become a lot more user friendly and relevant (Travelport is now using VFM Leonardo for content for example), which has had hugely positive customer feedback from agents.
EFT: How do you ensure hotels achieve the best yield?
MH: We ensure we are compatible with most of the key channel management solutions out there, ensuring we are getting the best available rate and the most up to date inventory possible.
Going a step further, when talking about direct connectivity – we have built a solution to ensure we can access all rate levels for our customers giving them not just ‘best available rates’ but a multitude of advance purchase (very popular for our long haul inbound market), added value, inclusive and promotional rates.
Finally, when our suppliers are working directly with our extranet – it’s all about the relationship the hotel has with our product manager for that region.
EFT: How can online travel agencies avoid booking errors and higher IT costs?
MH: It’s really two-fold. From a connectivity side, ensure any site updates are communicated down the line for any changes and testing that may be needed. As long as errors are communicated through the relevant channels properly then future issues should be kept to a minimum. In the age of direct API technology and moving away from push/ pull/ cache availability there should be less and less booking errors. Again you should rely on your relationship with the hotel in order to minimise potential issues in the first place or come to a speedy resolution for all if something does occur.
EFT: How do you plan to expand the coverage of your hotel content?
MH: Our key regions where we work direct with all of our suppliers are Australia, New Zealand and the Asia Pacific Region. In the rest of the World, we have good coverage in Europe and parts of the Americas (with direct suppliers) but due to the sheer volume of hotels available – I see connectivity as a way to both enhance and add to our existing offerings. We have been expanding our UK regional product as well as continental Europe. Northern Europe, The Baltics and The USA are primary areas of interest for us moving forward.
EFT: How are OTAs addressing the need for two-way connections that will benefit hoteliers?
MH: Being able to facilitate connectivity to a hotel or chain via CRS, Switch, Channel Manager, property management and GDS is essential as many groups, chains and independents will have some or all of the above implemented into their distribution strategy. So as an OTA by not having a flexible API that can connect to each eventuality or alternatively not having the resource to be able to build to a specification provided it means your customer may not be getting the full range of inventory available in some locations. This of course won’t be the case if you already work directly with that partner via extranet where many hotels or OTA’s still harbour their best supplier relationships.
EFT: How has the industry overcome the need for manual data entry and eliminated the risk of overbooking?
MH: Channel management tools and the fact that information can be updated at a single point of entry have helped massively here. It also helps to maintain parity across all channels. This of course works for both updating of rates and closing out multiple channels to minimise the risk of overbooking or not closing out a particular channel in time. The same principle of course goes for direct connectivity.