The third millennium is totally under the sign of new online communications and acquisitions tools. Today the Internet channel continues to show increasingly strong business growth as a distribution channel, but tension nonetheless exists between the different players and their different senses of logic. Having invested heavily in developing the awareness, online travel agencies make hoteliers pay a high price for their bookings. As owners of room supplies, hotel groups do not wish to let go of their control. Technology also provides new solutions by simplifying planning and rate policy management.
The current slump has not affected the growth of the major online distributors. Quite the contrary… “Looking for good rates, means going to Internet. The year 2009 will have been a good one because we benefited from the growing interest of both mass and professional clientele,” remarks Olivier Mouchet, sales director at HRS France. Of course the sector did not succeed in proving to be totally impermeable to the global economy’s tribulations. The growing number of online transactions was partly offset by the market’s deep decline. “We did not have the double digit growth we had previously. With the crisis, we had more reservations, but with smaller baskets and shorter stays,” observes Eric Reboul, associate of Webstore, promoter of Federal Hotel.The same observation was made by most Online Travel Agents (OTA), starting with the sector’s giant Expedia that, in the third trimester 2009, posted 27% growth in nights and a drop in revenue per night across all its sites. Nonetheless, the difficult period traversed by all hoteliers worldwide was favorable to allthese actors in another way: recruitment of new clients. “Since the period was difficult, hoteliers adopted every means to increase their occupancy,” remarks Jean-Louis Boss, VP Marketing at Fastbooking. “We had more than 1,200 new hotels in 2009 versus 850 in 2008 to achieve a total of 5,200 hotels at present, 900 of which are in France and 1,000 in Asia.”What is true for players positioned on the Leisure segment is also true of specialists positioned on a business segment seduced by the perspective of substantial savings on their travel budgets. “Since the beginning of 2009 requests for appointments by companies have multiplied, whereas until then they were still in the consideration stage. They were seeking a rapid unfurling of solutions. Thanks to our interfacing with self-booking tools such as Traveldoo and KDS, a company can find both its negotiated program and the HRS Internet rate of 250,000 hotels worldwide,” explains Olivier Mouchet.But can we still speak of single-segment specialists? HRS is constantly enriching its Internet portal of Leisure offers. Expedia, meanwhile, took over Egencia. Since then, the identities of major online booking players tend to merge. And, for the mastodons, now is not the time to lighten the load. Is this good news for hoteliers, be they independent or world leaders? “Accor and IHG would not be with us much longer if it did not work for them. Relations have to be win-win,” argues Olivier Mouchet. “With the Châteaux-Hôtels Collection, we have implemented a corporate rate. This voluntary chain with a leaning toward the Leisure segment benefits from more business on weekdays and we have access to fine weekend products.” Each reservation center brings its volume of business because of its specialization, key markets, and partnerships. Expedia offers high visibility on the American market, Federal Hotels on the French market, HRS on the German and Business markets.“These players are necessary and we have a win-win logic with them. They help us reach clientele segments that we cannot reach through our own sites,” demonstrates Romain Roulleau, e-Commerce director for the Accor group. “These partnerships must be chosen rather than imposed. Online agencies must bring us incremental business. We have an extremely clear message and are very attentive to commissions and negotiations of special offers. But it is a delicate equation, particularly with regard to distributors that have an economic model that is not necessarily in line with the 0-2* segment,” remarks Olivier Derycke, VP in charge of international operations at Louvre Hotels-Golden Tulip.One may observed that relations between the giants of online distribution and the world’s hospitality leaders have not always been idyllic. “I have echoes from hoteliers who complain about the pressure and constraints of Expedia,” confides Jean-Louis Boss. Most recently the renewal of the distribution contract between Choice Hotels and the online tourism giant was only concluded after several weeks of tests of strength. In October 2009, all the hotels under the Choice brand left the inventory of Expedia’s and Hotels.com’s sites because the group refused the new terms.The cause of this showdown: after generalizing the Best Available Rate, the famous OTA wanted access to the last available room, at the best available rate, or hotels risked a penalty for closing their reservations, even temporarily. Any opportunity for hefty commissions is good for taking… A compromise was found between the two parties, but the details have not been entirelymade public yet. However, it would appear that Choice succeeded in imposing final control over inventory by its franchisees. In an increasingly competitive universe, it is becoming increasingly complex to optimize distribution. “With businessmen starting to look for the best option between negotiated rates and Internet rates, or the Best Available Rate, hoteliers will have to manage increasing volumes of their revenues in a dynamic manner,” says a discrete sales manager. In this regard, inventory control and the possibility of getting the most out of it is proving to be crucial. And hoteliers have a firm will to keep a handle on their business, and be able to open or close one or another distribution channels depending on their strategy.Controlling inventory and rate policyFaced with these many challenges, the hotelier must be increasingly well armed. Providers are working to optimize IT solutions for hotel management. For some time now, Property Management Systems (PMS) have expanded their solutions with integrated Revenue Management (RM) tools: Micros, Topsys with its multi-PMS compatible top-pilote.net, and Amadeus RMS. “Technology has evolved over years of experience and customer demand. We propose a careful analysis to optimize sales through the best distribution channels, to establish rules for opening and closing. Premier Inn, the British economy brand which does not have a wide range of rates, uses this solution to optimize lengths of stay”, demonstrate Bruno des Fontaines, managing director of the internationaldivision PMS at Amadeus.However, in order to establish the best rate policy, hoteliers must also multiply sources of information to go beyond his hotel own history. In order to open his view on the rate positioning of the competition he needs to adopt decision support analysis solutions such as Hotel Compset, developed by MKG Hospitality, or online observer tools such as RateShopper by RateTiger or Fastbooking Checker. With this analysis of the competitive environment, hoteliers may feel more at ease shifting to the commercialization stage. This step is not without its challenges either, the first of these being a fluid exchange of information between the PMS and the different distribution channels and, in the end, the final customer. Gone are the days of time-consuming planning updates: channel managers such as FastBooking Updater, RateTiger with RT Allocator and RT Suite, HotelSpider and RevparGuru automate the publication of the rate policy and availabilities on all third party sites. For these purposes, Kathi Grützmacher, Director of Distribution and e-Marketing for the Spanish chain Room Mate, recently chose RT Suite: “It allows us to keep complete control over our inventory and distribute it to the adequate sites. Half of our reservations are through direct sales. The other half is efficiently managed by the RT Suite software using four or five sites that meet our room occupancy needs.”While these players efficiently manage communicating prices and availability with respect to the world of online distribution, information feedback in the other direction is not yet optimal. Two-way interfacing between the different players is increasingly the new cornerstone of relations between hoteliers and their distributor-partners. The primary designers of booking engines have developed connectivity switches to major distributors that are able to interfacewith a 2-way XML streams which transmit availability and prices and collect reservations. “We are multiplying the interfacing with distributors and recently added Expedia to a list of fifty or so players. We are still missing Lastminute and Orbitz, because they have not yet created XML gateways,” explains Xavier Gaucher, sales director commercial of Interfaces Technologies.At the same time, booking engines are working with PMS editors to create automated links with their solutions. “With our two-way interfacing, we are now compatible with the recent versions of fifteen or so publishers,” explains Xavier Gaucher. Availpro is following an identical path with, as the final realization, interfacing with the PMS Cudbe from Infognia. And FastBooking is also now taking this direction. Developing these interfaces with the primary software on the European market is one of the great priorities for the year 2010. “Connectivity has been rightly reclaimed by hoteliers. Micros Fidelio has opened the dance and other two-way switches should follow,” pronounces Jean-Louis Boss.Pushed by the exponential growth of online sales, connectivity has become the key to hotel distribution. Because everything starts with the PMS, the first link in the chain that stocks the room inventory, many publishers go so far as to turn their solutions into a new tool called PRS (Property Reservation Systems). The job of a PMS is no longer merely managing the property’s daily activities by linking the front and back office by incorporating information from the different points of sale, they make it possible to project the hotel outward in the most fluid way possible. Thus, Micros systematically integrates the booking engine Myfidelio.net in its Opera ranges for the major chains and V8 for its independent properties. Amadeus solutions also offer a switch towards GDS – the group’s original activity – in addition to two-way interfacing with ReservIT and Availpro.Today, the variety of interfacing available is at its peak. But the future may lie in integrated solutions, limiting the amount of interfacing with the different players. This is the direction Amadeus has taken with Amadeus Hotel Platform, its new product for major hotel chains that groups together PMS, CRS, GDS, RMS around a single database. “We are in a pilot stage with a 200-hotel European chain for a plausible launch at Equip’Hôtel. This product targets distribution– all the hotel activities may be booked via Internet – and is simplified, requiring little training for its users.”As publishers launch integrated solutions, hotel groups are organizing the convergence of their data systems. Recent announcements: Taj Hotel has opted for Amadeus’s other new innovation, the PMS Amadeus Property Manager. The Accor group, meanwhile, has turned toward Opera by Micros for its upscale segment. “By regrouping all our luxury and upscale hotels on a single integrated platform, we can create greater synergies between our hotels, located in nearly 100 countries, and will increase the level of customer satisfaction,” explained Gilles Bonnin, chief information officer for the group, upon signature of the contract in 2008. Louvre Hôtels completed its deployment of a centralized PMS at headquarters. “The benefit of the network effect is to have shared information,” outlines Olivier Derycke, “I believe that the centralized PMS is an ineluctable evolution, inline with history.”“With our Centralized PMS, our goal was to relieve our hotels of the task of managing servers and interfacing so our hoteliers could spend as little time as possible on these systems. Second goal: spend as much time as possible analyzing the information rather than collecting it. Having a central database allows us to know our customers better so we may adapt our marketing and commercial policies more efficiently. Thanks to synthetic reporting, teams at headquarters have a better understanding of the specialties of the different markets, and are able to detect problems. Thus, headquarters respond better to the needs of hoteliers who spend less time piloting their distribution so they may concentrate on their customers. Within the framework of good inventory and price management rules, hotels maintain control over their sales policy. The final advantage of a centralized PMS: it standardizes a language, creates a shared method and spirit within the group.” : Olivier Derycke, Vice President International Louvre Hôtels-Golden Tulip
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