To get a grasp on the current hotel distribution landscape and how much intelligence and work is needed to optimize each channel, it’s worth taking a moment to review its early history. Distribution mix was once a simple concept: walk-ins, phone calls, and the occasional (physical) mail were, fundamentally, the sole sources of hotel bookings. But things started changing when electronic reservation systems made their first appearance in the '60s and, eventually, became mainstream in the ’80s. By the end of the 20th century, hotel distribution shifted (literally almost overnight) online, and started to resemble what it is today. Over the last two decades, consolidation and new players entering the market have been crucial to an extraordinary growth in digital hotel distribution. Flash-forward to today, the current landscape is touted as merely a duopoly held by Booking and Expedia, and that is a quite accurate statement, at least to a certain extent and for the moment being. Even though it seems like distribution is ever-moving, in fact, there are clear patterns and trends. According to Phocuswright, for example, 2016 was “the first year when OTA lodging bookings in the U.S. exceeded total hotel website gross bookings”, and forecasts expect OTAs to reach over 40% market share by next year. This means that despite above-the-line marketing, targeted discounts and revamped loyalty programmes, consumers are not shifting to direct as their primary booking option as intensely as the big chains wanted. With this in mind, perhaps hotels should start reconsidering their relationships with online travel agencies and focus on the channels bringing the highest profit and volume. In an age where OTAs and wholesalers flex their rates across metasearch engines or marketplaces it is very unlikely that users will just “stop clicking around”. You just need to accept it and move on. There are, however, alternative distribution channels that could be leveraged with success or, at least, kept under one's radar. So let's dig into these distribution Goliaths. Booking.com Born from the merging of booking.nl, bookings.org and Active Hotels (a.k.a. ctivebooking.com), over the years Booking.com became the biggest e-commerce website for travel, with around 200 offices worldwide and over 17,000 employees. Two years after Expedia turned the opportunity to buy booking.nl down in 2003 (ouch!), the Dutch startup was eventually acquired by Booking Holdings (at the time still operating under the Priceline Group moniker), which rebranded to Booking.com in 2006. The first version of the booking.nl website went live in '97, with an inventory of ten hotels and a commission rate of 1/4 of what it is today. According to its founder, Geert-Jan Bruinsma, he had the original idea during a dinner with friends, "got inspired" from the Hilton official website source code the and launched it with barely 50,000 €. During the years, Booking Holdings continued to grow thanks to an almost-mistakeless acquisition strategy: from Asian-based OTA Agoda to rental car service TravelJigsaw (a.k.a. Rentalcars.com), from travel metasearch engines Kayak, Momondo, CheapFlights, Mundi and HotelsCombined to restaurant-reservation service company OpenTable, not to mention yield management solution PriceMatch (now integrated in BookingSuite), RocketMiles, ASDigital, Buuteeq, Hotel Ninjas and the heavy investments made over the years in Chinese OTA Ctrip. Expedia Founded in 1996 as a division of Microsoft, Expedia was acquired by IAC/InterActiveCorp in 2003, which eventually spun it off in 2005. In 2012, Expedia took a majority stake in trivago (which the American OTA still owns after the metasearch went public). Under the IAC/InterActiveCorp brand first, and the Expedia's brand then, dozens of companies (eventually acquired or merged) operated and continue to operate: TripAdvisor (spun off in 2011), Hotels.com, HomeAway (merging VRBO, bedandbreakfast.com, vacationrentals.com, Abritel and FeWo), Egencia, Travelocity, Orbitz, HotWire, Wotif, lastminute.com.au, Ebookers, CheapTickets, AirAsiaGo, Venere.com (eventually merged into the mother brand), Classic Custom Vacations and many others. Today's market value of the company is almost $20 Billion, with over 22,000 employees around the World. Agoda Founded in 2005 by Michael Kenny and Robert Rosenstein, merging planetholiday.com and precisionreservations.com, Agoda can be viewed as a precursor in the industry. PlanetHoliday, in fact, was founded in 1997, just one year after Booking.nl and Expedia. Agoda focus is mainly on the Asia-Pacific region and it has a portfolio of over 1,000,000 vacation rentals and hotels worldwide. In 2007, the Bangkok/Singapore-based company has been acquired (for an undisclosed amount), by Booking Holdings, even though it continues operating independently. HRS With almost half a century of history, HRS Group is the (grand)father of all OTAs. Founded in 1972 by hotel clerk Robert Ragge, in 1995 it became the first website to provide an online hotel database. In his book, Outliers, Gladwell popularized what became known as the 10,000-hour rule, by documenting the lives of successful people. “Ten thousand hours is the magic number of greatness”, he wrote, inspired by the work of Daniel Levitin, the neurologist who scientifically proved that “10,000 hours of practice are required to achieve the level of mastery associated with being a world-class expert in anything”. The theory is fascinating, though, not always reliable, and HRS is the perfect example of this fallacy: even with almost half a century (or 400,000 hours) of experience under its belt, today it has a significantly less prominent market share than it used to have, while OTAs born decades later have outgrown it. In 2008 Ragge's son, Tobias, succeeded his father and acquired Tiscover, hotel.de, HolidayInsider and bought stakes in meetago and Lido Group. HRS currently lists 850,000 properties, operating mainly in German-speaking Countries. Wholesalers and Bedbanks Wholesalers and bed banks both made an extraordinary (yet unexpected) comeback over the last few years, mainly fueled by nebulous B2B2C rate strategies and smart acquisitions. With its database of over 70,000 beds and around 5,000 employees, the World’s largest bedbank is, of course, HotelBeds. Founded in 2001, HotelBeds became independent in 2016 (it was, up until that moment, owned by TUI), thanks to the backup of private equity funds Cinven and CPPIB. HotelBeds recently played the divide et impera card, by acquiring two of its main competitors: Tourico and GTA. AirBnB, Google and Amazon So, while even the small hotel entrepreneur is familiar with the aforementioned players, there are at least three companies trying to undermine this status quo. Airbnb, for example, recently officially stated that it offers more listings than Booking.com, while Google entered aggressively into the travel space, thanks to the European introduction of its facilitated booking system Book-on-Google and with its redesigned destination hotels page (https://www.google.com/travel/hotels/). Amazon, after trying (and failing) to get into the industry back in 2016, is rumored to be slowly (but steadily) trying to gain a more prominent slot in the market. Conclusions Far from being fully exploited or stagnated, the hotel distribution space still has a lot of potential, both in growth and diversification. With, on one side, main OTAs turning into metasearch engines-slash-marketplaces-slash-B2B providers hybrids and, on the other, search engines and retailers playing the OTA’s game, our industry has never been so interesting.
Distribution Channels Articles
After the European Commission successfully prosecuted Google for its unfair search practices, travel industry pundits wondered if Google’s suite of travel products would be scrutinized next. While that hasn’t happened (yet), the commission turned its attention to another contentious topic in travel: the contracts between airlines and global distribution providers Sabre and Amadeus. Notably overlooked was the third biggest GDS, Travelport. In a press release, the commission announced an antitrust “investigation into airline ticket distribution services” which would: “investigate whether certain terms in Amadeus’ and Sabre’s agreements with airlines and travel agents may restrict the ability of airlines and travel agents to use alternative suppliers of ticket distribution services.” The EC is investigating whether these contracts “may breach European Union competition rules which prohibit agreements between companies that prevent, restrict or distort competition within the European Union’s Single Market.” Why airlines and not hotels? For hotels that feel squeezed by intermediaries, it may seem disheartening that the investigation doesn’t extend into other aspects of the GDS business. With hotels paying far more commissions than airlines for each booking, there’s certainly more money exchanging hands. In fact, airline distribution costs have generally fallen while hotel distribution costs remain high. In the EU, there’s a large amount of fragmentation in hospitality, which means that the average hotel has far less power at the negotiating table when it comes to the GDS. So why did the EC choose to open an antitrust investigation into airline contracts and not those with hotels? Here’s why. Reason #1: Lufthansa’s bold move It wouldn't be a travel industry story without a little drama. This issue started back to 2015 when Lufthansa made a bold move to encourage more direct bookings: a surcharge for any bookings made via GDS. Amidst protests from GDS and agencies, the airline refused to back down. This led to a formal complaint from the European Technology and Travel Services Association (ETTSA), which languished with the EC. In July 2018, ETTSA called out the regulators for taking 30 months to respond to its initial complaint, saying that the European Commission is “tacitly giving the thumbs-up to Lufthansa’s unfair conduct, which consists of weakening the effectiveness of neutral distribution channels used by consumers to compare prices of different airlines.” Five months later, the EC announced its investigation into airline contracts with Sabre and Amadeus. While not explicitly mentioning Lufthansa, or the ETTSA’s claim of anti-competitive behavior, the commission committed to the investigation. There's been no comparable move on the hotel side of the GDS business, so there’s been no comparable investigation. If Marriott, Hilton, Accor or Intercontinental step up here it will certainly increase the odds of a shake-up in hotel GDS as well. Reason #2: The dominance The second reason why regulators are looking at airlines versus hotels is due to the dominance of airline bookings as a share of total revenue. A look at each company’s third-quarter results shows just how dominant Sabre and Amadeus are when it comes to air bookings: Amadeus accounts for 43.4% of agency air bookings and Sabre takes 38.6%. Sabre Q3 2018 results The disclosure of these market share figures signal how important air is for both companies; there’s no comparative metric for lodging. At Sabre, lodging made up 11.8% of total Travel Network bookings in Q3 2018; during the same quarter at Amadeus, non-air bookings accounted for 10.7% of its GDS business. Amadeus Q3 2018 results Dominance matters because most business trips require airfare. Since it’s much rarer for a business trip to be hotel-only within the agencies that rely on the GDS for inventory (business trips are generally booked through GDS vs. OTA), the channels with the most comprehensive access to airline inventory will win more agency business. This dominance is also the primary reason why Lufthansa added its GDS surcharge. The airline needed to do something to pull bookings away from those channels, and a surcharge made more sense than an expensive “book direct” campaign that wouldn’t change the behavior of agencies using the GDS. In this case, even with potential legal action and agency pushback, Lufthansa calculated that a stick works better than a carrot. Reason #3: The lack of choice With airlines, there are fewer options for both airline and seat type. With hotels, there’s more diversity of brand, service, style, and cost. There are also far more attributes of a given hotel room than a given airline seat, which diversifies the selection for guests. The rise of mobile devices and dynamic pricing technologies shifted hotel buying behavior. Apps like HotelTonight impacted advance purchasing behavior, and services like TripBam took advantage of flexible cancellation policies. Metasearch also simplified hotel search, making it easier to compare hotels with similar attributes for both consumers and agencies. In essence, hotels and travelers are less reliant on one channel or technology for hotel bookings. Meanwhile, airlines never really had that sort of innovation, which may be why the EC decided to investigate the “full content” clauses in GDS contracts -- clauses that are not common in GDS contracts with accommodations providers. Reason #4: The connectivity There's also been an underlying tension around the “New Distribution Capability,” or NDC. The framework, an initiative of IATA, brings more choice to the buying experience. Up to this point, ancillaries and bundled fares have not been easy to purchase via third-party channels. There’s been no industry standard that defines how airfare is distributed and displayed to agency clients via third-party channels. Travel agencies relied on a patchwork of connectivity that made it nearly impossible to book the new classes of airfare popularized by airlines, such as Basic Economy or bundles that include checked bags. This meant that consumers could have a better experience booking airfare on an airline’s website than going through an agency or metasearch channel. This disparity in consumer experience may have contributed to the EC’s investigation. Rightly so, agencies were displeased. Their business is to book travel for clients, and this patchwork made this incredibly challenging. NDC promises to streamline connectivity between agencies and airlines, which is why the GDS were generally resistant. This resistance often played out in their contracts with airlines, which limited connectivity. The GDS didn’t want to get pushed out of their cash cow business as intermediaries, and the contracts were the leverage that kept innovation at bay. Without the GDS demand, many airlines could never survive. So most airlines begrudgingly accepted the “full content” clauses that limited airlines’ abilities to revenue manage by channel. Hotels, in contrast, have maintained healthy channel control. There are more ways for hotels to limit inventory to specific channels and prices, making the marketplace more price competitive with plenty of options for consumers. No one player has as much power in lodging as the GDS do in airlines. Reason #5: The technology Finally, how hotels connect their supply to sources of demand differs from airlines. While most airlines connect directly to the GDS, not every hotel does. For smaller to mid-size hotels, there’s at least one other layer of technology between the hotel and third-party distribution channels: the property management system, channel manager, and/or revenue management system. These tools handle connectivity, so hotels are not necessarily direct contracting with, or connecting to, the GDS. This makes contractual limitations much less impactful for hotels than airlines. Of course, hotels still have commission contracts. It’s just that hotels have more control and choice over where to distribute inventory. Hotels have more leverage thanks to less concentrated demand. There’s also more flexibility. Many property management systems also include direct booking tools, so that inventory is managed quite seamlessly across a hotel’s website and third-party distribution. Hotels, therefore, have more granular controls to manage which rooms are offered on which channels at what price. Looking ahead: consolidation continues None of this is saying that the relationship between hotels and the GDS is above reproach or immune to regulation. Amadeus’ recent acquisition of TravelClick for $1.5 billion recentered the hospitality technology space; Sabre’s $360 million purchase of Farelogix had a similar effect on the airline technology space. The continued expansion of the hotel and airline technology units of Sabre, Amadeus, and Travelport (recently acquired by Elliott Management) means that more consolidation is inevitable. By consolidating a larger share of technology spend, both companies risk more scrutiny on all aspects of their business -- including hotels. Since the GDS (and, by extension, agencies and OTAs) command more distribution power in hotels than airlines, hotel GDS has experienced less scrutiny from regulators. Ironically, higher fees have kept hotel GDS out of regulatory limelight. Therein lies the billion dollar question: does the scale and reach of the main GDS players reduce competition and stifle innovation?
The hospitality industry has become a very dynamic one in recent years. Revenue Management strategies that would have once been deemed acceptable and rational, are no longer efficient. Be a next-level Revenue Manager and avoid the three big mistakes that are commonly made with making pricing decisions. Putting Quantity Over Quality Firstly, despite what many Revenue Managers think, occupancy is not the deciding factor of how profitable a hotel is and should not be their main priority. Higher occupancy will actually result in lower profits if, in order to achieve it, the ADR is dropped to a rate that is not compensated. Take this simple example- A hotel with 100 rooms sells 90 of them, at a 100 euro rate. This results in 9000 euro in revenue. The Revenue Manager then decides to set a 100% occupancy goal, selling 100 rooms at an 85 euro rate. This results in only 8500 euro in revenue. You must find the right balance between occupancy and ADR in order to achieve your highest potential profits. Furthermore, even if an ADR reduction is compensated by an increased number of bookings, don’t forget about the extra operational expenses that come with renting more rooms! So when you’re faced with a thin option between higher occupancy or higher ADR, bear this in mind before making your choice. It’s usually better to focus on ADR in properties with no extra revenue-generating departments, like restaurants, bars and spas. 2. Making Price Adjustments Based on Occupancy Making pricing decisions based on occupancy alone is a big mistake and can lead to revenue losses. An important factor to consider is the number of remaining days before arrival. For example, 70% occupancy tomorrow is very different to 70% occupancy 90 days from now. In the first case, you should lower your price to sell those remaining rooms. The second case indicates high pick up outside of the standard booking window, which should lead to increasing the room rate in order to benefit from the high demand. Another price adjustment trigger is the booking pace, which gives a better insight into room demand. Say, for example, the occupancy for the upcoming weekend is at 70% and each day for the last 7 days has seen a significant percentage of bookings for that weekend. This demonstrates a high demand, which allows for a price increase since the pickup indicates early sell out at the current price. In another situation, no reservations have been booked for the weekend during the last seven days, and the hotel received 3 cancellations yesterday, so the occupancy dropped from 73% to 70%. Although the occupancy and the number of remaining days are the same in both situations, this second scenario shows that demand is weak or the room rates are too high. Therefore, a smart Revenue Manager will make an opposite price adjustment, lowering the rates to stay competitive. This confirms that occupancy alone cannot provide enough information for effective Revenue Management decisions. 3. Pricing Based on Competition Another misconception that is still prevalent among many Revenue Managers is that they should base their prices on their competitors’ rates. Certainly, it’s important to always be aware of your competitors’ rates. However, that’s not to say that you should prioritise their prices over your hotel’s actual supply and demand. Different types of travelers are looking for different kinds of accommodations at different times. Even in the unlikely case that your competitor has identical features to your own hotel, your comp sets may not always be skilled in current Revenue Management strategies. How do you know they’re accurately following demand fluctuations and are instantly reacting to these fluctuations with optimal pricing? Your competitors might not be aware of the true demand in your area, let alone for your hotel. Therefore, by following their prices, you may sell out way too early or be left with many unsold rooms. Furthermore, your competitor may have just booked a large group reservation that resulted in an increase in price for transient business. With fewer rooms to fill, they can afford to increase their prices for those that are leftover. However, the true demand for your hotel hasn’t changed, so by following their pricing decision, you will be left with drastically diminished occupancy rates. Conclusion So, now you know what not to do, what you should do is concentrate on increasing actual profits and focus on the real demand flow. Just by making this simple shift in thinking, you’ll be much more in line and clued in with where the hospitality industry is going these days. In turn, that will help your property be more successful!
Deal will significantly expand Amadeus’ presence in the hospitality sector. Addition of TravelClick’s cloud-based solutions for mid-chain and independent hotels will enable Amadeus to reach all segments of the market with an enhanced portfolio.Madrid, 10 August 2018 - Amadeus has agreed to acquire TravelClick from Thoma Bravo, a leading private equity investment firm, for USD $1.52bn. TravelClick, which is headquartered in New York City, is a leading global hospitality provider that serves more than 25,000 customers across 176 countries. It provides innovative cloud-based solutions, including an independent and mid-size hotel Central Reservation System (CRS) and Guest Management Solution (GMS), as well as business intelligence and media solutions. This portfolio gives hotels distribution reach across all channels, both digital and traditional. It also allows them to improve digital interaction with guests, increase revenues and performance, reduce cost and create a strong brand. The addition of TravelClick’s solutions to the Amadeus portfolio will create a hospitality leader providing a broad range of innovative technology to hotels and chains of all sizes across the globe. “TravelClick has a great team, great technology and a broad customer base, and we are looking forward to welcoming such a successful business into Amadeus,” said Luis Maroto, President and CEO of Amadeus. “Our ambition is to provide the hospitality industry with the tools they need to grow their businesses and deliver a great experience to their guests. The combination of our two portfolios will allow us to provide that to hotels of all shapes and sizes across the world.”“This deal marks the next stage in TravelClick’s incredible journey of success in delivering ground-breaking solutions for hoteliers,” said Larry Kutscher, CEO of TravelClick. “I couldn’t be more proud of our team or more excited about the impact our combined companies will have on the hospitality industry as we begin to deliver the next generation of innovation for hoteliers.”“This is a huge step forward for Amadeus in hospitality,” said Francisco Perez-Lozao, Senior Vice President, Strategic Growth Businesses at Amadeus. “While we have already made strong progress with the large chains, TravelClick gives us access to the mid-chain and independent hotel segment that makes up almost three-quarters of the market. We can now serve the entire industry with a very broad portfolio of solutions and we are looking for significant growth in the years ahead.” “TravelClick is an excellent example of Thoma Bravo’s proven investment approach of acquiring a best in class vertical market software company and working alongside talented leadership to implement operational best practices and drive growth both organically and through M&A,” said Holden Spaht, a managing partner at Thoma Bravo. “We appreciate the outstanding execution of Larry Kutscher and the management team at TravelClick, and believe the company is well positioned to continue delivering innovative software, data analytics and marketing services that maximize revenue for hotels around the world.”As part of the acquisition, approximately 1,100 TravelClick employees are expected to join Amadeus. Amadeus and Thoma Bravo expect to close the acquisition in the fourth quarter of the calendar year 2018, following regulatory approvals. The transaction will be debt-financed and immediately earnings accretive.
How the New Airbnb Offerings Impact the Hotel Industry and What Hotels Brands Can Do to Win in the Sharing Economy
Boutique Hotels Beware: The Hotel Industry Gets a New Frenemy Longtime hotel industry rival, Airbnb, continues to make headlines with its latest offering. In an effort to own more vacation accommodation bookings, the company, which built its business on being the anti-hotel alternative, now offers more boutique hotel listings than ever before. But, even as Airbnb adds more hotels into the mix, hotel brands are not featured. Despite this, there is a lot that hotel brands can do to stay competitive in the sharing economy. Why are hotel brands letting Airbnb win? Hotels have experienced strong growth since 2008, but alternative accommodations like Airbnb and HomeAway have been chipping away at their market. Phocuswright projects private accommodation bookings will grow from 12% to 16% of total bookings this year. The trouble is that the amount of pressure being felt within the hotel industry to adapt doesn’t meet the danger that faces them. This is the opening that vacation rentals are exploiting. The response to the rise in vacation rentals falls into two extremes: denial and alarm. The denialists argue that vacation rental companies like Airbnb serve a different customer -- someone hungry for local flavor and authentic experiences that can be achieved by renting an extra room in a home or apartment. However, the majority of bookings are with hosts who offer more than one listing, essentially running unlicensed hotels . Plus, travelers are predominantly looking for entire homes or apartments . And, while Airbnb brags about its hosts as a major differentiator in the crowded travel accommodation marketplace, the most likely scenario is that the host and guest never meet in-person, creating an experience similar to a hotel without a front desk. The alarmists correctly point out that vacation rentals are barely regulated, taxed or scrutinized compared to hotels, similar to what the delivery industry faces from Uber and Lyft. While hotels enjoy advantages like prime locations, often more desirable than the residential properties of vacation rentals, they are often outweighed by regulatory forces. In this case, the location may be outweighed by the at least 15% price advantage of not having to pay an occupancy tax, a notable revenue stream for cities, helping them build and maintain communities around these tourist destinations. A benefit of Airbnb’s significant lobbying investments. Not only does the concept of Airbnb being a mom and pop home sharing site no longer hold true, communities are losing out on funding that directly translates into economic development. How are hotels battling back? The hotel industry has a difficult balance to maintain. It needs to appear unruffled by vacation rentals to the public while appearing proactive to investors who are increasingly concerned about vacation rentals. The playbook so far has been focused on lobbying. We’ve gotten a glimpse into the lobbying playbook recently. The laws that have emerged have ranged from outright bans to simple tax collection. In my opinion, the bans help no one because short-term rentals do meet a real need, and by obstructing them hotels suppress innovation. There is a balance to be struck through registering and taxing short-term rentals instead of outlawing them entirely so that both consumers and the travel industry benefit. Real regulatory change is just starting to happen in places like New York and most recently in San Francisco where Airbnb had to drop 50% of its listings. Airbnb will have to add hotels to make up for its lost inventory and when that happens they will no longer have a price advantage because they are selling at the same rates as everyone else. If hotels can level the playing field and get local governments to tax and regulate vacation rentals as hotels, it will be a big win for local communities, hotels, and even consumers who will be paying more, but getting more safety in return. Hotels will know that they have fought their way out of this quagmire when they are on equal tax footing with vacation rentals. The first step is happening now with municipalities setting up laws to tax individuals. The next step is when municipalities require the sites selling short-term rentals to report the taxes that should be collected. So what should hotels be doing to compete? Regulatory changes will take years, if not decades to come. So hotels also need to be thinking about changes they can make today to remain competitive. Focus on what it means to stay at a hotel: Location, amenities, and service. An average Airbnb host cannot compete with an established hotel in these three areas. The hotel industry as a whole should be playing up these attributes: Location: Location is consistently rated the most important factor in accommodation purchasing decisions. Most hotels have an advantage with central locations and easy access to transportation. Vacation rental maps often look like a donut around the center of the city because they are in residential neighborhoods. Amenities: While some vacation rentals may have a pool they definitely don’t have a spa. Hotels have great services like restaurants, spas, clubs onsite. We know that travelers want these amenities because of the companies that focus on getting vacation rental customers access to hotel amenities. Service: Service is one of the hotel industry’s biggest strengths. The staff that sometimes is seen as a cost center is really one of the most valuable distinguishing factors in favor of hotels. The amazing recommendation from a concierge and the attentive staff member are what travelers remember. Most Airbnb hosts don’t have the time to cater or are even in the same city as their listings. The hotel experience is the luxury experience, with an entire staff at a guest’s beck and call. Plus, issues such as broken plumbing, inoperative air conditioning, that would normally just result in getting a new room can’t be solved by hosts that don’t have the ability to move customers around. Give the people what they want. There are plenty of hotels that have a large portion of suite inventory, most of them with the ability to convert to a multi-room suite. And still, hotels continue to lose families and group vacationers to short-term whole home and apartment rentals. One big reason is that friends and families can book multi-room inventory easily on these home share platforms. They can have the shared kitchen, living room, balcony where they can be together. Even in a place like New York, 35% of Airbnb’s listings are two or more bedrooms. The truth is hotels already have the kind of inventory that can attract these customers, but most of that inventory is paid for only 30% of the time. This is because of legacy technical reasons, lack of marketing the best hotel inventory, and inter-departmental turf wars. One of the things we’ve done at Suiteness is create ways to get around these limitations thereby giving travelers exactly what they want - the space and multi-room inventory akin to an Airbnb with the safety, service and quality assurance of a hotel. Hotels are already seeing the difference that multi-room inventory makes. Two-bedroom connecting suites are booked 3.3X times more than regular suites. For the consumer, this kind of inventory means getting what they want at better prices - travelers can save up to 36%, compared to similarly sized stays elsewhere. Where do we go from here? As an industry we need to remember that travel is about the people. Airbnb succeeded by bringing the human element back into travel, not from just “staying like a local” but by providing a space for people to stay together. Today’s travelers want to reconnect with their friends and families. The traditional hotel mindset of one-size fits all one king, two queen hotel room needs to change. Eventually, Airbnb will start adding hotel inventory to their site just like the major OTAs now include vacation rentals. The catalyst here will be when short-term rentals start getting taxed at the same rate as hotels. When that happens, what it means to be a hotel will fade away unless we do something about it. For those of us who love hotels, we won’t let that happen. Let’s get to work and adapt!  AirDNA.com shows that for the month of Mar 2018, there are a significant number of hosts who manage multiple listings on Airbnb. 19% hosts in New York manage more than one listing while in Las Vegas the number is as high as 36%. In other words, these are unlicensed hotels taking customers away from traditional hotels.  The popular belief that Airbnb bookings are mostly shared room or private room bookings is also not true - most are actually entire place and multi-room bookings. AirDNA.com data shows that 52% of New York listings are entire homes or apartments while Las Vegas is 68% entire home/apartment listings. Originally published on Medium
February 12, 2018 - Hotel Tech Report has named Suiteness 2018’s top rated Alternative Distribution Platform based on data from thousands of hoteliers in more than 40 countries around the world. Over 100 of the world’s elite hotel technology products competed for a chance to win this prestigious title. The HotelTechAwards platform (by HotelTechReport.com) leverages real customer data to determine best of breed products that help hoteliers grow their bottom lines. “Distribution partners can be a double-edged sword. The big OTAs are great for filling excess capacity but often cost an arm and a leg. Alternative distribution platforms allow hotels to tap into niche segments that are often much more profitable than traditional OTAs” says Hotel Tech Report’s Jordan Hollander. Suiteness is poised for sustained growth in 2018 as the Company plays a critical role in taking back critical hotel business from home share platforms like AirBnB. Suiteness offers suites to travelers, particularly groups of 4 - 12, who are looking for unique accommodations less well served by traditional hotel rooms. “Suiteness has found a solution to a difficult problem that opens up a profitable segment of business for Hoteliers” says one Las Vegas based VP of Partner Marketing for a large global gaming and hospitality brand. To read the full review and more, head to Suiteness' profile on Hotel Tech Report About Suiteness: Suiteness is a hospitality technology company that offers the first online booking platform exclusively for hotel stays and connected rooms. Accommodations range from standard one-bedroom suites to spacious stays with multiple attached rooms and common areas. The company is carving a niche for itself in the international travel industry as the leading website for hotel suites and is finding success with group travelers and families looking for a nice place to stay together. Suiteness was launched in 2015, with funding and support from investors including Y Combinator, Structure Capital and Keystone Capital. The platform currently has over 200,000 members and has access to more than 30,000 suites from leading hotel groups such as Viceroy Hotel Group, Las Vegas Sands Corporation, Caesars Entertainment, Langham and more. Suiteness is present in key markets such as Las Vegas, Miami, Los Angeles, New York, Orlando, Chicago, Hawaii, San Francisco, Washington DC, Phoenix, San Diego, and London. The company is expanding its suite inventory rapidly in key markets across the world. For more information on Suiteness, please visit http://www.suiteness.com.