How Digital Solutions Give Back Power to Hospitality Business Owners

OTAs have established themselves as an almost indispensable tool to connect guests and accommodations online. But the time is right for hosts to take back some of the power by embracing hospitality tech.

For many years, hospitality businesses have relied on online travel agencies (OTAs) to generate bookings and secure reservations. Still, while OTAs have brought convenience to travelers and helped fill up rooms, they have also taken a considerable chunk of revenue from hotels and vacation rentals.

But this dynamic has started to change, with the number of direct bookings growing again in many markets. After a considerable boost during the pandemic, they accounted for 56 % of all bookings in the US at the end of 2022. 

Naturally, hoteliers are looking for ways to keep this momentum going and effectively prioritize and drive business growth.

The pillar of this strategy will be to embrace technological advancements. Firstly, because most travel bookings are now made online and generating visibility and traffic as well as optimizing the booking experience are necessary building stones. But additionally, improved profit margins can be directly reinvested into efforts to sustain the business’ growth independently of OTAs.

How hospitality businesses can gain back power

Booking engines, channel managers and revenue management systems are some of the top tech solutions, if hospitality businesses want to increase their turnover and ensure sustained growth.

Booking Engine

The booking engine is your business’ online catalog or, if you will, your hotel e-commerce.

In practice, this software allows potential customers to check available rooms, rates and offers in order to make bookings. On the host's side, the software makes your process trackable by providing accurate sales statistics.

To convert website visitors into guest, a booking engine must be aesthetically pleasing, reliable and easy to use. Make sure it is easily customizable and can adopt the look and feel of your website.

The goal is to enable customers to book with just a few clicks and without distractions.

Channel Manager

A channel manager automatically manages availability on all sales channels in real time.

It relieves you of the task of updating availability on different portals and reduces the risk of mistakes such as overbooking.

A reputable channel manager will not only connect to OTAs, but also to metasearch engines.

By making it easy to open up new sales channels, you benefit from increased visibility and bookings and reduce staff workload.

But any channel manager that is not connected to the software you already use is practically useless. It needs to both update information on portals and receive data of bookings made through these channels.

When evaluating a channel manager, make sure it connects seamlessly with your booking engine and PMS.

Revenue Management Software

While a booking engine allows you to get direct bookings and increase your profit margin and a channel manager allows you to automatically synchronize your availability and rates, they do not determine the best rates at which to sell your rooms. This is the job of revenue management software.

By analyzing considerable amounts of data, revenue management systems develop a personalized pricing strategy that optimizes sales.

With the advent of artificial intelligence and machine learning, the calculation and management of room rates is handled almost completely autonomously.

In practice, the RMS suggests the best market price based on internal factors such as occupancy and booking history, as well as external factors such as demand, average price, and available rooms in the market.

A revenue management systems also enables better forecasting based on accurate data, booking frequency and your on-the-book reservations.

This allows you to not only increase revenue, but optimize hotel operations and reduce costs, too. Greater forecast accuracy also means greater precision in purchasing and managing financial and human resources.

Even if effective tools to disintermediate from OTAs have been available for a while, many lodging businesses still struggle to implement measures that put themselves first. What is holding them back?

What stands in the way of hosts gaining back power from OTAs

One of the biggest challenges is the sheer number of tasks required to manage properties.

The need to professionalize every aspect of operation, from administration and marketing to revenue management, puts a brake on the development of independent businesses. The necessary personal and monetary resources are often out of reach.

These days, digitalization is providing a way out of this dilemma.

What makes this the right moment for digital solutions

In recent years, digital solutions for the hospitality industry are coming into their own and are set to remodel the management of accommodations and hotels.

By automating and digitizing many of the tasks involved in property management, owners can free up time and focus on areas where personal work is needed. 

The computing capacity of software allows for efficiency gains and results which are much more accurate compared to manual processes. This is exactly what allows these solutions to maximize your revenue.

Today, software solutions can be implemented at an affordable price and without big efforts: Thanks to intuitive and user-friendly design, the need for training and support has been reduced to a minimum. 

Another crucial development is the advanced connectivity between different providers and types of software. New and existing systems are now able to work together seamlessly.

All of this means hospitality business owners have the opportunity to take back control. The rise of direct bookings has provided a perfect opening to invest in their own properties. A savvy use of digital solutions enables businesses to streamline their operations, save time and money, and focus on providing a better guest experience.