Top hospitality innovators have become agile in every facet of their businesses. Top hotel marketers are diversifying digital spend to ensure the lowest possible cost per acquisition, the best sales reps are becoming less reliant on concentrated corporate business by building strategies to attract diversified pools of small group business, and the best revenue managers are constantly seeking new ways to experiment with their distribution mix to optimize for profitability.
In this article, we’re going to focus on a new tool that helps agile revenue managers cut out distribution middlemen and access new demand channels that were previously too expensive and time-consuming to experiment with.
We’ll explain how Impala’s new contracting product is empowering forward-thinking commercial leaders to capture new guest segments and take control of their distribution strategies. The best part? You can list your hotel free today.
Why Hospitality Leaders Should Bring Agile Methodology into Their Commercial Operations
Complacency has historically led to the death of once-great tech companies like Xerox and Kodak. When successful companies like Amazon and Facebook grow, they work hard to retain their original startup mentality and never get comfortable with the status quo. They’re always questioning what they do (and why they do it) and they’re constantly searching for new opportunities or more efficient ways to operate. They test tons of new ideas to quickly cut failed experiments and double down on successful ones. This operational framework is called “agile management.”
Iterative or agile life cycles are composed of several iterations or incremental steps towards the completion of a project. Iterative approaches are frequently used in software development projects to promote velocity and adaptability since the benefit of iteration is that you can adjust as you go along rather than following a linear path. One of the aims of an agile or iterative approach is to release benefits throughout the process rather than only at the end. At the core, agile projects should exhibit central values and behaviors of trust, flexibility, empowerment, and collaboration.
Impala allows revenue managers to experiment with tons of new channels at very low cost: both financial cost, since you will be in full control of your discounts and commission rates, and time, since Impala eliminates the need for legwork like contracting connectivity setup, and extensive training.
With Impala, your hotel can try a variety of new channels that target different guest segments. Eventually, this cycle of creating hypotheses, connecting to new channels, measuring success, and finding takeaways will become a habit and allow your hotel to identify new pockets of demand with zero upfront cost and minimal time invested.
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How Impala Enables Commercial Leaders to Implement Agile Methodology
There are millions of parties globally who sell hotel rooms but don’t have access to proprietary inventory. Historically, these kinds of platforms have had two key ways to sell hotel inventory: OTA affiliate networks (e.g. Expedia Affiliate network) and bed banks. Impala has built a platform that empowers hotels to connect directly with distribution partners.
Impala’s platform is designed to provide hoteliers with the ability to decide where (and when) exclusive rates are shown in a scalable but controlled way. If a hotel wanted to connect with a new supplier like TripFactory or National Park Express before Impala, they’d need to reach out to that supplier and gather information then decide (using limited information) whether the supplier could generate enough demand to warrant an exclusive rate. The majority of smaller travel websites lack the bandwidth to take calls or emails from individual hotels so it’s almost a non-starter but even assuming they could - it could take weeks or months of back and forth before ever forging a partnership and drafting a contract.
These smaller travel websites and apps typically don’t have the capability to build up their own hotel supply so it’s unlikely that a partnership like this could even be created in the first place even if the entire prospecting, negotiation and execution phase went perfectly.
In short, it’s nearly impossible for hotels today to strike up direct relationships with smaller more niche distribution partners. Even when they can, it can take weeks or months for a hotel to strike up a new distribution partnership with a niche travel provider. In order to recreate the level of demand generated by Booking or Expedia, a hotel would need to successfully repeat this process hundreds or even thousands of times which is obviously not a commercially viable strategy.
This dynamic has put hotels in a position where they cannot be agile and test new distribution channels which has consequently inflated third party commissions on OTAs and created massive rate parity issues due to a multitude of online resellers.
With Impala, this whole prospecting, negotiation and execution process is streamlined meaning that a hotel can add new distribution partners like TripFactory and National Parks Express with minimal work and no upfront cost.
Travel platforms like TripFactory create proposals with parameters such as commission structure, date availability and discounted rate. With Impala, hotels can offer unique experiences like room upgrades or welcome cocktails instead of or in addition to discounts. They can select specific hotels within the Impala platform.
Hotels then get notified of new offers from relevant distribution partners in real-time. When they see interesting proposals from distribution platforms, they can then either accept them or propose new terms in just a few clicks. No contracts or even email conversations required.
Agile Leaders Will Thrive in the Next Generation of Travel
The growth of global travel over the last century has been staggering. In 1950, 25 million tourists travelled the globe and by 2018 that number exploded to 1.8B. It’s easy to see why the hospitality industry thrived during this period. During this time period cars and planes became mass market products for the developed world making travel more accessible to all. Then, computer technologies like GDS and OTAs unlocked global demand for hotels by making it incredibly easy to find and book rooms.
While the industry will continue to see strong growth over the coming century - it’s undeniable that the now enormous travel market has catalyzed increased competition. More competition means that hoteliers of the future will need to be more creative than those of the past in order to run profitable businesses.
For hoteliers, sticking to the status quo simply won’t cut it. The hospitality teams that thrive in the future will be those that continually evolve and pivot to outcompete not only the hotel down the street, but also vacation rentals and any other disruptor, by strengthening their position within the distribution power curve.
We can also expect that global travel behavior will continue to evolve and shift rapidly. What happens to hotels that are heavily dependent on international travel when it’s shut down? How do hotels react when autonomous cars enable guests to drive further distances to visit their properties? What strategies will be deployed to attract a new generation of remote workers? Demand as a whole is growing but the nature of that demand is changing so quickly that hoteliers will need to be extremely agile in order to benefit from that growth.
Impala’s vision is to disrupt legacy systems with a paradigm-shifting concept that removes the need for legacy infrastructure altogether and hotels globally are signing up to take part in the next generation of travel.
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This content was created collaboratively by Impala and Hotel Tech Report.