Gaining a Competitive Edge with Third Party Revenue and Distribution Management Tools
Kerry Medina, Contributing Editor
When the hospitality industry discusses technology, it typically has to do with consumer-facing products that can positively impact the guest experience. This year, Choice Hotels announced a new partnership with AT&T to provide franchises with the telecommunications company’s Internet and WiFi solutions while Marriott International upgraded its mobile app and New York’s Westin Buffalo joined the growing roster of global hotels to employ a robotic butler. But when it comes to technologies that impact revenue and distribution functions, many of the major hotel brands remain loyal to their legacy systems.
For hotels interested in upgrading to the latest in revenue management and distribution data, tools and processes, there are events like the Revenue Strategy Summit, and the Revenue Strategy Forum. For hoteliers who can’t attend these industry forums, sorting through the market’s myriad third-party tools can seemingly detract from the day-to-day business of servicing guests. Yet, those who have signed on with the services of third parties for access to their revenue or channel management tools and data, don’t view the decision as an expenditure, but as a strategic benefit to their bottom lines.
Time Efficiency is a Commodity
“A lot of hotel companies think they might be better off creating their own technology, but Two Roads is in the hospitality business, not the tech business,” says Kathleen Cullen, senior vice president, revenue and distribution at Two Roads Hospitality. “So our goal is to work with third party providers who have best-in-class technology. Not necessarily one company that can do it all, but who are the best in their particular space.”
For the past five years, Two Roads has been working with IDeaS for its SaaS-based revenue management tools and with Sabre Hospitality for four years, leveraging its Channel Connect product. The practicality of these partnerships is simple for Cullen; they allow revenue managers at each hotel to focus on strategy while updating rates, availability and content on a single platform that automatically updates all GDS, OTA and call center inventory.
Defining the Value of Technology
Likewise, small, independently owned properties like the 10-room La Posada Pintada Boutique Inn in Bluff, Utah employ the services of third party tools for the sake of time management. Owner Jennifer Davila uses SiteMinder to manage her property’s two major distribution channels – an endeavor she calls nightmarish.
“It’s definitely more expensive, but it’s also money well spent in my opinion,” she notes.
But the benefit to Davila is not singular; she also points out that working with SiteMinder means she no longer has overbooking issues, which was previously a major challenge for her.
Cost is also a consideration at San Francisco’s 65-room Hotel Bijou. Regional Manager Kunal Sikand describes himself as “that guys who says OTA bookings are really expensive,” but he also admits that Expedia Partner Central, the OTA’s online resource for its lodging partners, is a tab that he leaves opens constantly and refreshes anywhere from 10 to 15 times daily.
Specifically, Sikand is tracking current and future rate changes among his competitive set via the Rev+ tool for his own forecasting. He’s also leveraging the Booking Insights tool to analyze his conversion rate see where consumers who have reviewed his hotel page without booking have ultimately stayed. The exercise often points to trends in his local market that he wasn’t previously aware of, such as an event in another part of the city that properties in that area are offering a promotion around.
“When I see people booking at another hotel that I never thought I would compare to, I know I need to keep those rates in mind,” Kunal explains. “It brings my comp set up from my immediate area to the entire city.”
Revenue strategy firm Duetto can also provide hotel clients with data about their properties’ websites, specifically pertaining to site visitors who didn’t book, the countries they’re from and the time frames they were considering for their stay.
“I can work with my vice president of e-commerce to see which promotions are working and which aren’t,” explains Katie Winther, vice president, revenue management at Dream Hotel Group.
The company teamed up with Duetto last year for a host of reasons, including real-time data analysis. The time Winther's staff saves on reporting is now spent creating more strategic offerings and focusing more on sales as far out as a year in order to avoid filling rooms at the last minute. She also notes that of particular benefit is the ability to set advance alerts for high booking windows so that rates can be set accordingly. With Smith Travel Accommodations Reports (STAR) and Demand 360 already integrated in, Duetto’s system also gives Winther and her team the power not only to compare competitors’ business with that of Dream Hotel Group’s, but also to limit minimum rates, eliminating the possibility of bookings coming in at unfavorable rates.
“We’ve been able to avoid mistakes that have happened in the past before we had a revenue management system,” she says.
Monte Gardiner, managing director, revenue management at Best Western also attests that his brand’s relationship with OTA Insight has resulted in eliminating errors. But when he became a client of the software application service provider in summer 2016, it was to monitor Best Western hotels’ placement and quality of content in addition to rate parity across the many distribution channels with which the brand works.
“Parity is important because it gets to the heart of whether customers trust your pricing and we knew we had parity problems,” says Gardiner. “OTA Insight provided us with data to conform our rates, suggestions on how to solve the problems and they also built a set of work flow management tools to deter these problems in the future.”
With this detection reporting tool, Best Western has seen a 75 percent reduction in the number of parity issues that arise. With the recent announcement of new cancellation policies by other hotel brands, Gardiner called upon the team at OTA Insight to shop Best Western hotels’ cancellation policies across its various distribution channels only to find discrepancies that were quickly rectified.
High-Tech, High Touch: The Human Element
Aside from the practical applications and advanced technologies that these platforms can offer their hotel clients, the element of human service also plays a significant role in why some of these hotel executives maintain business relationships with their respective travel tech counterparts. In Gardiner’s case, the data is important, but equally germane is the OTA Insight’s team willingness to roll up their sleeves and find solutions in, what Gardiner calls “a conscious and deliberate fashion.”
Sikand, too, doesn’t hesitate to tap into the expertise of Expedia’s local market managers when he can’t make sense of certain trends in local rates. The Expedia staff will perform next level analysis for Sikand, but they also regularly attend hotel industry conferences and will share insights from those events.
Cullen’s point of view is wholly pragmatic; she assumes innovation and high service standards on the part of all providers with which she does business. But what she elucidates is, no matter how cutting-edge the technology or the integration tools, an open communication channel is critical – to all parties involved. She says, “it’s a two-way relationship that isn’t just about what the tech provider needs to do, but how the hotel company can embrace a new business practice or a new approach to an existing business practice.”