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Juyo CEO on the secret for hoteliers who want a career in tech

by
Hotel Tech Report

For some hoteliers working on property is their dream job.  Working at a hotel combines fast paced analytical challenges with meaningful interpersonal relationships.  While many hoteliers aspire to stay on property for the duration of their successful careers - others dream about ways to leverage their hospitality experience to launch a successful career in high growth fields like technology.  A career in hotel technology can provide immense financial gains and create new professional opportunities while enabling hoteliers to stay connected with the industry that they love. Here at Hotel Tech Report we’ve interviewed dozens of former hoteliers that have leveraged hospitality experience into executive roles at top technology firms such as Del Ross (CRO, Hotel Effectiveness), Alexandra Zubko (CCO, Triptease) and Matthijs Welle (CEO, Mews Systems).  Each of these leaders has shared unique advice guiding hoteliers who want to pursue a career in technology and if you’re interested in making the move you should soak up all of their wisdom.   Hotel tech companies love hiring forward thinking hoteliers because they have deep industry knowledge and relationships.  Most of these hires don’t start with formal job applications but arise out of a tech company working with a hotelier as a client and seeing their work ethic and potential first hand.    Related content: 10 Best Places to Work in Hotel Tech 2019   If you are one of the many hoteliers interested in pursuing a hotel tech career, our interview today will be your bible and guiding light.  Vassilis Syropoulos is the CEO of Juyo Analytics, a Brussels based commercial analytics platform for hotels.  During his long and successful career as a hotelier he noticed that departments were siloed and rarely communicated with each other.  In fact, these disparate teams weren’t even looking at the same datasets so they were comparing apples to oranges in quarterly business meetings.   Syropoulos was VP of Demand Management for Pandox AB (a large European hotel ownership and management company) and was feeling first hand the immense cost of this problem when he decided to build the analytics platform that is now an independent company - Juyo Analytics. Pandox was such a big believer in Syropoulos and his idea that they even became his first customer. Vassilis spent years in hotels learning from technology companies, trying products and being a true technology maven before diving into the space himself.  His story is an inspiration for hoteliers looking to start a career in technology or even start a business of their own in the space. “Since the beginning I was very curious. Every time a vendor called me I saw it as an opportunity to learn something new, to build my network, understand the market from a different perspective and potentially find something that would make more money for the company I was working for. I was thirsty to learn and then it became a habit.” ~Vassilis Syropoulos Syropoulos previously worked with independent properties and major brands having spent time at senior positions within IHG and Starwood properties all the while trying new technologies, learning from his vendors and keeping his eye on the long term opportunity to become a technology leader himself.  Today he’s also an investor in event intelligence firm Get Into More and has a busy schedule to say the least - so we were lucky to catch him in between running two high growth technology businesses.   Tell us about your background in hotels. I was born and raised in Greece, My parents owned a beautiful café at the seaside so I was in hospitality since I was 10 years old. Travelling and Hotels is what I really wanted to do. I studied in Switzerland and then started at the Front Desk during night and day and then moved to Revenue Management. That was with IHG and their very beginnings of Revenue Management in Europe. I had no clue what the job would be but it sounded sexy so I almost begged the GM to put me in that position. I thought it was the future and I was right. The first few months I didn't know what I was doing. The first week I started at the new job, my hotel was audited and the score was worst in class in EMEA. I was even publicly shamed at the annual conference by the VP at that time. That first week made me want to be the best so I worked hard, read books, went to conferences, and learned myself pretty much everything there is to learn. I ended up being sponsored by IHG to go to Cornell and finally made it on the top 10 list of top revenue talent within the global organization. Hard work pays off. 15 years ago there was not much I actually loved when working on property. I felt that chains were standardizing everything with standard operating procedures and rigid hierarchies. Also when I started in Revenue Management I was disappointed to see the “real work” involved. We’re talking 15 years ago now. I was picturing myself as revenue manager like some sort of rocket scientist but instead I was copying pasting stuff in Excel. Systems did not talk to each other, everything was manual. For the geeks out there I had a master Excel file whereby I was translating hurdle rates in minimum length of stay restrictions that I had to manually put one by one into the CRS. Wholesalers and static rates were all over the place and reservation input in the PMS was often late as teams were trying to catch up. No real time stuff… I really don’t get sometimes what everyone is complaining about today. The world is such a better place. I did not know what the optimal way should be but for sure as hell I knew it was not what I was doing at the time. On the other hand, I did love the contact with the guest. At least when I was on the front line. That was something I was very good at as I was working since being 10 years old. And no there is no such thing as child labor in Greece! You just put your stone on the family business. I loved it and so much money from tips I could use partly to pay my school. My parents paid most of it but they could barely afford such an expensive school. All this helps keeping your head screwed on when running a business and watching your cash flow. I learned so much from such a young age and I am deeply grateful for those learnings. It helps develop emotional intelligence - something I could use later when needing to pull teams together towards a common Revenue Strategy.   When did you first become interested in leveraging technology to become a better hotelier? From day one in my job. But 15 years ago there was really not much by way of technology so a lot has changed in that time. I was a total Excel junkie as I mentioned. You know it’s an amazing tool. You can do everything. It just does not scale and is not made for complex data sets. But at that time it was brilliant. And there was nothing else so Excel it was.   As a hotelier what was your biggest frustration with technology vendors? I cannot recall being frustrated with tech vendors, you see I had a different approach. Since the beginning I was very curious. Every time a vendor called me I saw it as an opportunity to learn something new, to build my network, understand the market from a different perspective and potentially find something that would make more money for the company I was working for. I was thirsty to learn and then it became a habit. I kept inviting vendors and getting the teams to assess, learn and perhaps implement something. My hotels where I was working were always the first ones to adopt a piece of tech. I was on all the pilots. One of the companies I signed up had not even Incorporated yet. I said I love your product; incorporate your company and we will sign up with you straight away. We are still friends today with that vendor. It’s like its not us and them or us vs them. Were all in this together with aligned interests.   What is the most widely held misconception that hoteliers have about technology?   There are many misconceptions still out there despite all the progress and things are constantly changing but the one misconception that I consistently see in the market is the idea that it’s a massive project to install something (hotel software). Today it’s pretty easy, takes minimum effort and the ROI can be great. It’s sort of getting to a place where hoteliers can JUST DO IT.   Tell us about your journey from hotelier into technologist? There was a point in my career where many things came together in the world and my environment. First of all there as much more data than before for Revenue Managers to use, Secondly the lines between revenue management, distribution, marketing were blurring with the digital landscape. Thirdly cloud technology although existing since a long time it was more and more present in Hotels and access to tech development was easier and easier. And last I was involved with Pandox which is one of the leading Hotel ownership groups in Europe. Value creation is the main driver for such a sophisticated owner. How do you drive value? More profit obviously. All this together I felt we needed a new sort of Analytics for Hotels. I looked at the market to find a vendor or piece of tech that I could plug in but could not find anything suitable. So I said to myself (probably the most naïve thing) “This should not be hard, write few interfaces, connect some data points and let the magic happen. Obviously, I realized quickly I was wrong.   What was the most challenging part of moving from hotels into technology? So, I don’t even know where to start. First of all I knew my job but knew nothing about technology. Knowing all the features on your iPhone does not make you proficient in tech. Once more in my career I had to learn everything again. There’s a great quote from Richard Branson that says: “If someone gives you an opportunity and you don’t know how to do it say ‘yes’ and learn how to do it after” - that has always resonated with me. I had a customer, there was a need but I had no clue so I needed to learn. I went to conferences, read blogs, books, trained myself, spoke with people in tech, you name it. I was fortunate enough to find a great tech partner and that has been critical. The truth is that even with all the reading at the beginning when you actually have to do it you really have no clue. I made mistakes every day, small, big you name it. Woke up in the morning solving only issues and doing the same all over again every day. But the people around me like partners, developers, team​ believed in it and we persevered. We bootstrapped the Juyo Analytics business - so I couldn’t afford to make existential mistakes. I would wake up and go to sleep with cashflow excels. I still do today. It makes you quite pragmatic in your decisions and damn focused. We have been approached by VC’s but we don’t think it’s the right fit for us. I feel it will distract us. It’s like I need to spend 9 months hunting VC’s, I prefer to hunt customers. I am a simple person it’s not necessarily a world I understand or want to be part of. It will take longer but we are making something great.   Give us the elevator pitch for Juyo. Organizational silos are breaking down across hotel organizations: from revenue to distribution, marketing, sales, digital acquisition, and finance.  Juyo is a Hotel Commercial Analytics Platform that helps hotels connect the dots across these disciplines and empower managers to make better decisions. We turn data into profit.  Digitalization brings more opportunities to improve business performance; however, as datasets become more complex - managers are increasingly being forced to connect the dots across many disciplines and systems.   The Juyo platform enables hotels to easily customize dashboards combining all of their data sources   Imagine that you're going to open the hotel of your dreams tomorrow.  What kind of hotel would it be? I think it would be something that would be at the Intersection of Hotel and alternative accommodation. Probably upscale not luxury. Uncomplicated, Unpretentious, certainly independent, I would attach great importance on the customer journey. The right mix of digital and hospitality. A digital customer journey should 1) remove friction and 2) empower people to get back to the essence of hospitality. Back to hospitality, in Greek it’s called Filoxenia.   What technology would you leverage at your hotel? A robust PMS with an open marketplace whereby I can connect different apps and tools. I like what Richard and Matthijs are doing with Mews Systems. I would spend time to design the customer journey customer made for our needs through a mix of in house development and partners with open API’s. I would have difficulty selecting a revenue management system. It would need to take personalization and attribute selling into account. Not many do that today. It's the start but the right way to go. I would attach great importance on the pre check-in and check-in process. Digital no keycards, no apps, seamless. Disconnect the transaction from the experience. But overall keep it simple and fully automated.   What's one piece of advice you have for hoteliers who have dreams of working in technology one day? It’s not a dream just go for it.  Make sure you learn a lot about entrepreneurship because it’s a very different field than hospitality.  Read The Lean Startup by Eric Ries and listen to podcasts like How I Built This with Guy Raz. It’s not 100% focused on tech but it gives deep insights into the life of startups. I love it.   What is your favorite hotel in the world? I don’t think I have anyone in particular. Depends on the mood and time of year. I love The One in Miami Beach, I love what One Hotels stands for in regard to sustainability, I love the interior design and wish my house looked like the interior. I love how they communicate. For the winter my all time favorite is Cervo Zermatt. They really get it and have brought something new to Swiss hospitality by getting rid of the stuffy part while delivering true luxury. For business I love the Nobis in Stockholm (one of our customers). They have managed to make a true difference hospitality wise. The Hotel Brussels, (also one of our customers which I personally did the rebranding from Hilton to Independent - Top Project and Hotel).  But being in this business there are so many hotels that I love - too many to name. Some recommendations: Worthwhile to check Chromata in Santorini, Sophia’s Suites in Santorini, Boheme Mykonos, Habitas Tulum, Hideout Bali, Hotel des Grand Boulevards in Paris, The Curtain in London, 25 Hours Bikini in Berlin, Relais Sant Elena in Tuscany and La Bandita in Tuscany. I’d love to stay at The View Lugano but haven’t stayed yet. Pictured: Habitas Tulum   What is the most exciting technology you've seen in the hotel market lately? I love what Lennart de Haan is doing with 4Suites. 4suites wants to be the leader in digital access. The piece of tech is very clever and elegant. Basically, when you want to enable door locks to open with your phone you need to install an app. What they do is different they install a chip in the hotel lock and an “Antenna” gateway that is connected to the Internet. Now when the customer receives the link to open the door on his or her phone (by email or SMS) and clicks on it. Their phone then communicates via the web to the gateway that sends a radio signal to the chip in the lock and opens the door. All that in few milliseconds. It’s brilliant. It’s completely seamless and a great way to support a digital customer journey. I wish them all the success.

An expert review: What you need to know about Sabre's SynXis CRS

by
Hotel Tech Report

Sabre Hospitality Solutions recently announced its completion of the Wyndham migration, closing out the years-long process after on-boarding La Quinta’s 900 properties. Wyndham’s 19 brands now operate with SynXis central reservations, joining the 40,000 properties across 160 countries that use the SynXis platform worldwide. So why choose SynXis for your central reservations solution? Let this Expert Review guide you as you evaluate Sabre’s SynXis CRS and how it aligns with your property’s objectives -- and how the central reservations piece fits into the rest of the SynXis Platform.   What SynXis CRS does: The platform proposition for direct bookings In today's hospitality technology marketplace, platforms are everywhere. Vendors want to be able to provide a comprehensive portfolio of complementary products that still leaves flexibility for a la carte usage. One of the main selling points of SynXis is that it can be molded to your property or brand’s needs, and can scale to accommodate emerging priorities. For example, you can start with one piece of the platform, such as central reservations, and then layer others over time. Or, you can drop the entire platform into your operations and transform your workflow. Sabre buckets its SynXis platform into four discrete objectives: driving direct bookings, optimizing distribution mix, managing the business, and increasing guest loyalty. This article focuses on the first part of this platform: driving direct bookings with SynXis CR central reservations and its associated Booking Engine, Digital Experience, and Voice Assistant. The central reservations tool manages reservations and rates; the booking engine drives direct bookings on desktop and mobile; the Digital Experience designs digital experiences for hotels; and Voice Assistant allows hotels to provide integrated voice support via Sabre call centers. SynXis Central Reservations (CR) is a rate, inventory, and reservations management solution that enables a finely-tuned distribution strategy individualized at the property level. Of course, it also doesn’t hurt to use a solution from a major player in the distribution space -- there’s a level of familiarity that hotels can expect from a solution provided by one of the major GDS. As laid out in the graphic below, the SynXis CR solution functions as the connectivity engine that powers a property’s revenue.     Who SynXis is for: The ideal customers and uses SynXis is built for scale. This structure means that the platform is best suited for mid-to-large scale brands and properties with more complex operations. Smaller independents will be better served with cloud-based central reservation systems built (and priced) for their needs.   Since SynXis is available in 8 languages, another ideal customer and use case is for a brand with international properties. Sabre has regional HQs in Montevideo, London, and Singapore, as well as field offices in most major cities, which means that your hotel is likely to have at least a regional support team. That’s a helpful thing to know for properties that prefer a global support team to a smaller vendor footprint. Having said that, at the time of writing, Sabre’s customer support rating on Hotel Tech Report is 3.8 out of 5 which is lower than comparables such as TravelClick iHotelier CRS (4.3) and Travel Tripper Reztrip CRS (4.7). For Quality Reservations, a brand with 280 hotel properties, SynXis’ global scope was a key differentiator when evaluating technology partners, says Quality Reservations’ Managing Director Carolin Brauer: “We needed a strategic partner that had the ability and knowledge to leverage travelers’ shopping and booking preferences while offering greater international reach and found such a provider with Sabre Hospitality Solutions. All without losing the regional variations in customers’ preferences when maximizing online bookings for each of our hoteliers.” After deploying the SynXis central reservation system, as well as the booking engine, Quality Reservations saw 20% increases in bookings and room nights, and a 32% jump in revenue. For brands of a certain size, there’s clearly a benefit to SynXis global scope. Let’s look at some of the most essential features, followed by a candid look at SynXis’ online reviews.   Five essential Sabre SynXis features Integrated revenue management controls SynXis CRS has very rudimentary revenue management capabilities built in, so you don’t need another vendor to optimize rates but you are advised to use one as firms like IDeaS, Duetto and Atomize specialize in rate optimization and profit maximization. SynXis offers real–time rate and inventory information across all channels, from a single system of record that these distributes rates effortlessly across over 400 online channels through direct GDS/IDS/switch connectivity. Given the fast pace of online channels in international markets, these types of integrated rate controls help hoteliers be more responsive to changing market conditions -- without the latency of a third-party integration or manual processing. And, with advanced revenue management strategies, such as Length of Stay Pricing, Dynamic Packages, Loyalty Program, Seasons, and Predictive Inventory, you can take control of revenue right from the CRS.     Optimized for tablets Many hotels are doing away with complete desktop systems at the front desk, preferring the slimmer footprint of tablet computers. The SynXis CRS system is optimized for tablets, allowing all of the same functionality. The UX is equally functional, enabling staff to touch and tap through the system.   OTA channel activation wizard Managing OTA connectivity can be a hassle. Activating new channels can take weeks, and then there’s time to test the connection to be sure everything works as it should. SynXis offers an OTA channel activation and management wizard from within the CRS. While this feature requires a Channel Connect agreement with Sabre, it’s a handy addition to the CRS that greatly reduces time and pain associated with independently managing your distribution channels. Channels can be added, removed, and edited from a single screen, so you can individualize distribution with less stress and headache. The Channel Connect feature connects to nearly 600 OTA channels, allowing you to manage pricing at the channel level.     Refreshed design and updated UX Sabre has made great strides over the past couple of years on the UX front. The dated legacy design is nearly fully sunsetted in favor of a modern, card-based user interface that’s easy to navigate and much easier on the eyes. No longer does the software look like a nightmare from the days of 90s legacy software -- an important point for hotels looking to avoid alienating younger staff with outdated technology. Great design improves the staff experience, so staff can get the information they need and complete the tasks required to maintain a consistently great guest experience.  Despite these improvements, users on Hotel Tech Report rate Sabre Synxis CRS usability and design slightly lower than comparable products at 4.2 out of 5 versus a 4.3 for Travel Tripper Reztrip CRS and 4.6 rating for TravelClick iHotelier CRS (view side-by-side ratings comparison).   Dynamic packages Incremental revenues can be the silver bullet that helps you hit your revenue targets. The SynXis CRS has a simple setup for packages, which allows your team to build unique packages that can then be sold right in your website’s booking flow. Packages can be attached to a specific rate plan or room type so that you can build a menu of appealing add-ons for guests.   Once the packages are created and pushed live, guests will be offered new options as they check out. This is where the value of the platform comes into play -- you’ll need SynXis Booking Engine to fully take advantage of these dynamic reservation add-ons. You can see how that would look below. If you’d prefer not to have guests book these add-ons during check out, you’ll see additional options in the Booking Engine.       SynXis CRS pricing Like any platform, pricing depends on which solutions are used across how many properties. Here are a few key points on pricing when it comes to SynXis: Monthly subscription: You’ll pay a per-property monthly subscription fee based on your customized package. Depending on which integrations you have (such as a per property fee for 2-way PMS integration), and functionality (such as channel management, rate insights, etc), this pricing adds up. It’s one of the reasons why smaller hotels are better served by an “all-in-one” solution that meets their needs without increasing price. GDS fees: Of course, you’ll pay a fee to whichever GDS partner sources a booking. This won’t change as a Sabre customer; although larger properties and brands have much more leverage to negotiate an overall package that includes lower GDS commissions in return for using more of Sabre’s technology. Here’s a pricing example: If your average booking is 1.5 nights at $100 per, then your "direct commission" to Sabre is 5/150 or 3.3%. That’s just to facilitate your own bookings without including the subscription fee, PMS integration, etc. Now add the channel connect fee of $2.50/reservation and any OTA commissions and it is looking even more bleak. If you go with a provider, such as SiteMinder or Cloudbeds, you’ll pay a flat fee. SiteMinder is $75/month, meaning that you’re better off there if your hotel has more than 30 OTA bookings per month. IDS fee: There’s also a per reservation charge for connecting to the Internet Distribution Fee, which can range upwards of $9.25. And, for reservations that go through third-parties, there can be an associated Channel Connect fee as well. Booking engine: Not all providers charge a fee for bookings through a hotel’s direct channel. These per-reservation fees add up quickly: 250 keys at 85% occupancy and 1.5 length of stay, can cost $710 per month just to facilitate the direct channel! This doesn’t even include the subscription, cost to build and maintain your website or any paid advertising used to bring in that direct business. As you can see, pricing is a major impediment for hotels of a certain size. SynXis really thrives in larger environments where it can provide the cost savings and productivity boost that justify its higher cost.   Areas for improvement For quick reference, here are a few areas for improvement, as perceived by both our expert opinion and candid SynXis user reviews shared on Hotel Tech Report. There’s also some interesting nuggets unearthed from the always-rich TalesFromTheFrontDesk on Reddit. Manual involvement: For certain hotels that don’t have Channel Manager or that are using the standard SynXis CR without add-ons, there may be some overbooking issues related to channel management, per this review: “I guess our night guy didn't know to call SynXis and have them take us offline on the 3rd party websites, and it just kept piling up. He would cancel, the rooms would look open again, and it was a loop. From stories of guests so far this morning, he had a lobby full of disgruntled guests without a place to go all night.” Another HTR reviewer mentioned manual involvement when discussing adding new features: “[I’d like] access to more items to do on your own as opposed to waiting for customer service to do it for you.”   Reliability: Uptime and system availability are frequently reported issues. While anecdotal, the reports are worth mentioning. A Hotel Tech Report review from March 18, 2018, said that there are “lots of outages, delays and poor customer support. The system seems to be degrading instead of improving.” Security: Two years ago, Sabre did report a breach of its systems, telling Forbes that “less than 15 percent of the average daily bookings on the Sabre Hospitality Solutions reservation system [...] were viewed.” It appears that the issues have since been addressed, but we’d be remiss in not mentioning it. Be sure to grill you sales rep on security!   Conclusions: Should you consider SynXis? Overall, Sabre’s SynXis is a powerful platform with ambitions to stretch across departments. For larger properties, corporate hotels, and multi-brand groups, the scope and scale of this ambition aligns with their needs. Having said that, products such as Reztrip and iHotelier have gained a ton of ground on Sabre and are versatile alternatives for both small independents and large hotel groups alike.  There’s also an ongoing investment to improve Sabre Hospitality Solutions’ University training portal, which includes videos, progress trackers and printable guides for sharing tips with colleagues. These efforts will help reduce on-boarding time and keep everyone up-to-speed on the technology. For smaller and to some extent mid sized properties, proceed with caution and really push the sales team to put down in writing how they intend to value your business with customer support guarantees and trainings. You’ll be a small fish in a big pond, and that’s not always the best place to be with a mission-critical system like a CRS. All that being said, you absolutely must have a CRS! It’s an essential piece of managing a hospitality business in a digital world. So, for those who can afford it (and are able to navigate the corporate environment of a massive vendor), there’s a strong ROI proposition from Sabre. The cost isn’t cheap but if you have both the budget and the internal buy-in, then it’s worth it. Remember that the front desk can be a busy place -- there’s always another guest to serve, another issue to handle.  The key is to select software that staff want to use each day, that’s easy to use, easy to train on and has top notch customer support. The CRS should function without fail, effectively and accurately distributing inventory to the right channels at the right prices, and then slingshotting reservations into the PMS seamlessly. When staff spends hours each day staring at a screen, be sure that the tool removes barriers and eliminates frustrations -- and doesn’t become a source of frustration itself. The question that remains is how Sabre will help you effectively on-board the new solution, and keep your team engaged and willing to give it enough patience and attention. A successful rollout of any new tech requires a partnership between client and vendor -- so be sure that you’re confident in that partnership before signing that contract!

This is the biggest trend in hotel tech that you’ve never heard of

by
Hotel Tech Report

Creating revolutionary technology for hotels has historically been a slog but lately we’re seeing a change in fate for hotel software companies due to increased investment in the space.  One of the biggest investors in hospitality tech is Menlo Park based TCV, the growth equity firm that has invested in breakout companies like Sojern and SiteMinder within hotel tech.  TCV has also made major investments in the broader hospitality and travel space such as: Airbnb, TripAdvisor, HomeAway, Expedia, Orbitz, SeatGeek and Toast. TCV is one of the largest names in the world of technology investing with a successful track record in the massive hospitality and travel vertical.  Vertical market software is an extremely hot investment theme right now. “The easy opportunities for disrupting old-line industries are drying up. Now, many of the up-and-coming start-ups that may become the next unicorns have names like Benchling and Blend. And they largely focus on software for specific industries.” ~New York Times Long time TCV investor and former SiteMinder CFO John Burke is excited about the opportunities within the vertical market software. John and his team have identified a trend within a sub investment theme that they've coined: ”SaaS as a Network”.  Here’s how they describe the concept. “When a SaaS provider starts serving a high enough density of merchants, they can leverage that strength to build two-sided marketplaces with the merchant's customers, suppliers, and employees.” ~David Yuan, TCV General Partner The general hypothesis is that once vertical market software companies achieve scale with regards to their core products they can always bolt on new point solution functionality but would be wise to focus on a much bigger opportunity.  Specifically, TCV believes that these software companies can create two-sided marketplaces that connect their users to new channels of customers, suppliers and employees. Back in February, Hotel Tech Report identified the explosion of marketplaces as one of the 5 biggest tech trends at ITB Berlin, a trend that mirror’s TCV’s investment thesis.  Of all the software companies creating marketplaces in hospitality, TCV’s portfolio company SiteMinder has the largest scale to date. Image from David Yuan's article SaaS as a Platform, SaaS as a Network   Last year SiteMinder threw its hat in the ring with the launch of SiteMinder Exchange aimed at “breaking down the industry’s notorious integration barriers, connecting hotel systems and applications through smart and simple connectivity.” “The reality is that few industries are as fragmented as hospitality particularly at the PMS level. There has always been demand for many of the new applications, but innovation has been stifled by lack of connectivity and the sales model makes the economics challenging. Some of these barriers are starting to be broken down by SiteMinder and others which I think can unlock a lot of innovation for the industry.  But this is a hard problem and it’s a complicated space with lots of moving pieces so that makes it challenging.” ~John Burke, TCV Executive Vice President SiteMinder’s Exchange marketplace is aimed at allowing other applications to access the firm’s broad user base consisting of more than 30,000 hotels worldwide.  Most of those hotels are using SiteMinder’s highly popular channel manager which connects hotel inventory to 3rd party distribution channels as well as other products within the firm's broader guest acquisition platform such as a rate intelligence tool and an online booking engine. The firm is betting that it can add value for users by allowing them to try more hotel tech applications with ease and in turn create new business opportunities for those suppliers. We sat down with Burke to discuss his views on hotel tech, the future for platforms like SiteMinder Exchange and highlight the most cutting edge developments happening right now within the hotel space.   How did you get into venture investing? I’ve been in and around venture since 2011. I started my career with EY in their audit and transaction advisory teams. Getting into venture was a bit of good timing and persistence. The TCV team were looking for an immediate hire and decided to take a chance. I was with TCV from 2011 to 2014 as part of the B2B software team. As I thought about what was next for me, I was drawn to the experiences and mentorship of the TCV Venture Partners (e.g. former senior operating executives such as Erik Blachford). The tech market at that time had been heating up with a few high-profile IPOs. It was my belief that the next wave of great investors was not going to be able to rely on multiple expansion or financial engineering. I believed the best investors over the next 10 years would need to be partners driving actual business growth. That brought me to SiteMinder down in Sydney, Australia. TCV had just led the Series B investment in the company, and the fundamentals of the business were remarkable.  On top of that, they were ramping up for aggressive growth across Europe, SE Asia and were about to launch in the U.S. which I thought would be great experience. I was also excited to work with Mike Ford and the entire SiteMinder team. Mike is a special entrepreneur who is not only very smart and a product visionary, but also authentic and humble. I joined SiteMinder initially in an analytics role and then for the next 3.5 years as CFO. For family reasons, we decided to move back to the U.S. last year, where I reconnected with TCV and rejoined the team. I continue to spend a lot of time in the hospitality and vertical software space and TCV just led an investment in Toast, an exciting next-generation restaurant platform.   Tell us about TCV. TCV was founded in 1995 as a $100M venture fund and today has raised over $15 billion across 10 funds, focusing exclusively on technology companies. We recently began investing out of TCV X, a $3 billion fund. TCV looks to partner with companies that have potential for a sustained category leadership position and are looking to succeed at an even greater scale. This typically means that a company has been growing for several years – with a history of customer trust and engagement and a business model that is reflective of the value they provide. We are flexible on transaction type with experience in public and private markets and are comfortable in minority or majority positions. Over the past 24 years, we’ve had more than 60 IPOs in our portfolio and have worked with some of the largest franchises in technology including ExactTarget, Facebook, Netflix, GoDaddy and Spotify.   At this point, I’ve talked with many investors in the space which helps me appreciate how the various funds are different. For TCV, I think it’s the depth of industry knowledge and a growth mindset. We have close to 100 team members now and our investment team focuses every day on technology and goes deep in verticals and sub-verticals. When we identify a compelling technology trend, we take the time to thoroughly understand the underlying drivers, business model, and competitive environment. Having a developed perspective means we can have much more meaningful conversations about a company’s business and growth opportunities and are positioned to be a better thought partner for the executive teams as they drive towards expansion and category leadership. We’re not afraid to make bold bets especially when we have conviction on category leadership and to do whatever it takes to help companies reshape industries.     Can you talk about TCV’s view on hotel tech and its SiteMinder investment? Travel and Hospitality has been a core focus of TCV for well over a decade. In addition to SiteMinder, the active portfolio companies we are working with include Airbnb, TripAdvisor, Sojern, Tour Radar, and Klook.  Previously we were investors in Expedia, HomeAway, Orbitz, and Travelport, among others. For SiteMinder, TCV led the Series B round and we have continued to stay active with the company as the lead director since then. Two of my partners David Yuan (General Partner) and Erik Blachford (Venture Partner) continue to serve on the Board of Directors. SiteMinder has an incredible history, where is the company today? SiteMinder is a hotel guest acquisition platform that connects hotels to future guests, so hoteliers can go back to doing what they love.  It’s trusted by more than 30,000 hotels of all sizes, across 160 countries and has helped generate more than 87 million reservations worth over US$28 billion in revenue for hotels each year. SiteMinder is based in Australia, how did you come across the investment? It was a team effort. Back in 2011 to 2013 we spent a bunch of time mapping out the ecosystem for online travel and hospitality attending industry shows like HITEC and Phocuswright. Ultimately, we identified the channel management sector as promising albeit a lesser known segment in the category. Our view at the time was that online travel was increasingly complicated and in flux with new players vying for hotel distribution. Independent hotels were harder to aggregate but would also allow these same middlemen an ability to offer differentiated supply that was higher margin. Channel management became interesting because it aggregated and provided connectivity to this supply. We thought this was a hard problem particularly to do in a cost-effective way but when executed it could be highly strategic given the long-tail nature of both hotel supply and PMS. From there we focused on the best product and category leader which led us to SiteMinder. One of my colleagues got us an introduction to Mike Ford through an employee. We then got on the 14-hour flight over to Sydney and created a deal. What's one piece of advice you have for hotel tech entrepreneurs when raising capital? Test the investors. Anyone can look at metrics, but make sure you push them on the nuances of your positioning and make sure they understand the depth of your industry and strategic implications of the various alternatives. Mike did this to us in a big way when we pursued SiteMinder and it always stuck with me.   One pitfall I’ve seen is entrepreneurs who get ahead of themselves with regards to the amount of capital raised or valuation and focus on those items vs. choosing the right partner. This can have implications down the road. I would say to raise what you need and what strategically makes sense given your market and opportunity. And focus as much time and energy as you can on the partner. In addition to the strategic perspective which is table stakes, I tend to think entrepreneurs should focus on investors with candor (to drive constructive feedback delivered in the right way) and humility (it’s all about the team and this also makes it more fun). How do you think the hotel technology space will change over the next 5-years? It’s a great time to be in hotel technology given how dynamic this market is. I think we are still early in the growth journey for hotel software. In my mind, there is no doubt that software will continue to play a larger and larger role in the next 5 years and continue to reshape the industry and guest and operator experience.  We have also been spending a bunch of time on a thesis we are excited about, called “SaaS as a Platform and SaaS as a Network,” which is around the continued extension of the SaaS business model and platform companies leveraging their position in creating marketplaces with employees, suppliers, or customers. I think this trend has many opportunities in travel.   For hotels specifically, I think data, connectivity, and personalization will only increase in importance. Tools like SiteMinder Exchange, which is a data layer connecting PMS with applications and demand channels, can be a big part of this and drive innovation. I also think there will continue to be more dominant global players with companies like Ctrip continuing global expansion and Google, Facebook/Instagram, and TripAdvisor starting to see momentum on their new models. The lines in the accommodation industry will continue to blur as Airbnb ramps up their investment and focus on hotels as well. I also feel labor management will matter more, and there will be new innovative ways to tackle this challenge. This is something we’ve seen in the retail vertical which I think will also make its way to the travel industry.    People often say that the hotel industry is a bit slow to adopt technology. Do you agree? I agree. But I don’t think it’s been driven by the lack of interest or desire.  Hoteliers care deeply about guest experiences and the ones that I’ve spent time with often always go above and beyond what’s expected. The reality is that few industries are as fragmented as hospitality particularly at the PMS level. There has always been demand for many of the new applications, but innovation has been stifled by lack of connectivity and the sales model makes the economics challenging. Some of these barriers are starting to be broken down by SiteMinder and others which I think can unlock a lot of innovation for the industry.  But this is a hard problem and it’s a complicated space with lots of moving pieces so that makes it challenging. Related article: Everything hoteliers need to know about APIs in plain english If you were leaving venture capital tomorrow and forced to start a hotel technology company - what would it be? That’s a tough one. Part of working in an operator role at SiteMinder helped me realize how hard it is to be an entrepreneur and scale a company. This only deepened my respect for what they do. I’m a big believer that you need to follow your heart, so I’d want to align it to something I am passionate about. Maybe I’d do something connecting hotels/travel and yoga which is something I’ve come to enjoy. And being a CFO and travelling a lot, I also think the opportunities in corporate travel remain significant. What is the most interesting or surprising thing that you've learned from investing in hotel tech? Not too much is surprising me at this point. It feels like there is never a dull day in hotel tech! One thing I did notice about some of the larger players in the space is that they serve hospitality, but at their core they are surprisingly not hospitable. One of my partners recently did a podcast with the former CMO at Airbnb and Coca-Cola and he talked about authenticity as an enduring and compounding competitive advantage. I think this is something that will matter more and more. I think it will eventually catch up with those companies who forget that, especially in hospitality tech. What is the best book you've read lately and why? “The Outsiders” by Will Thorndike. I read it a couple of years ago and it continues to stand out to me. The book profiles eight understated CEOs who took a different approach to corporate management.  These “outsider” CEOs often didn’t have the charisma that society has conditioned us to expect and were often in their position for the first time. Humble, unassuming and often frugal, they shied away from advisors and the hottest new management trends, instead focusing on a pragmatic and a disciplined approach to capital allocation which drove extraordinary returns. I found myself getting lost in each of their stories and admiring their independent thinking and patience to wait for the right opportunity. “Shoe Dog” and “Limping on Water” are two others I enjoyed.   What is your favorite podcast? The top 3 for me right now are Farnam Street, Invest Like the Best, and Acquired. All the them have caused me to think differently and continually expand my curiosity. What is one thing that most people don't know about you? I love yoga and meditation. For all the startups that might want to pitch in TCV's office, what can you tell them about your investment criteria? We recently began investing out of TCV X, a $3 billion fund, so the opportunities we pursue are typically between $30-300M. We tend to be flexible on all other aspects of a transaction type and focus on category leadership potential and growth. I really enjoy spending time with entrepreneurs and would love for folks to reach out even if they are a bit early. Companies can scale quickly so we would love to start a relationship well in advance.

OTA Insight is a new breed of hotel tech company

by
Hotel Tech Report

Last year OTA Insight passed the 40,000-property mark and, perhaps even more impressively, the firm grew to that base in less than 7 years since its founding. The company has become so significant in the rate shopping and market intelligence space that major competitor RainMaker even recently put out a press release encouraging clients to shift from its RevCaster product and migrate on to the OTA Insight platform - not something you see every day. Sean Fitzpatrick is a relatively recent addition to the OTA Insight team, having taken the CEO role in July of 2018; however, Fitpatrick is certainly not new to hospitality technology.  Prior to his current role leading OTA Insight, Fitzpatrick spent 5 years at restaurant software provider HotSchedules where he eventually rose to the COO position in 2016. While at HotSchedules, Fitzpatrick worked with hundreds of hotel F&B outlets and therefore had significant experience in the hotel software arena prior to taking the role at OTA Insight. An examination of the HotSchedules story sheds light onto recent developments at OTA Insight.  HotSchedules began as a niche product offering, scaled rapidly then added new product lines to meet the needs of its massive client base.  HotSchedules began as a labor management system then added product lines in recruiting, inventory management, eLearning and task management software for restaurants. OTA Insight has already grown beyond its original Rate Insight product having added new product lines with its Revenue Insight business intelligence solution and Parity Insight product line to help hotels better manage distribution costs and reduce reliance on OTAs. “Our mission statement is to empower the hotel industry to make better revenue and distribution decisions.” ~Sean Fitzpatrick, CEO, OTA Insight Fitzpatrick elaborated on the OTA Insight mission: “If you break the mission down a little we provide easy-to-understand dashboards with actionable insights, powered by the freshest and highest quality data in the industry.” Perhaps the most exciting piece of the OTA Insight story is the firm’s ability to serve both brands and independents.  Historically there has been a gap between the technology used by independent and branded properties but OTA Insight has proven that these two customers aren’t mutually exclusive.  There is a new breed of hotel software company that equally serves both chains and independents and OTA Insight is leading the way. This is a critical step for the industry as it opens up markets which ultimately allows tech companies like OTA Insight to invest in innovation to levels that were previously unheard of.  We sat down with OTA Insight chief Sean Fitzpatrick to talk about his storied career in hospitality tech, discuss the future of hotel tech and vision for OTA Insight. OTA Insight CEO Sean Fitzpatrick Tell us about your career in technology prior to OTA Insight. I’ve had a passion for technology from a young age. I started coding when I was 9 or 10 years old and left school at 16 to join a start-up developing business and market intelligence products for the investment community. I was an engineer by day and studied business at night-school so it was a grueling four years but a huge learning opportunity. After qualifying from college, I decided to leave Ireland to ‘see the world’ and spent the next few years traveling and working in some amazing early stage and more established tech companies. My career in hospitality technology really started six years ago when I met the founders of HotSchedules, an Austin-based restaurant tech company. I was really inspired by their vision to disrupt an ‘old school’ industry and we scaled the business to serve over 160,000 restaurants and 3 million users. What specifically excited you about OTA Insight? It was an amazing journey with HotSchedules so when I met Adriaan, Gino and Matthias, the founders of OTA Insight, I sensed that same passion and jumped at the chance to join the OTA Insight team. Our mission statement is to empower the hotel industry to make better revenue and distribution decisions.  If you break the mission down a little we provide easy-to-understand dashboards with actionable insights, powered by the freshest and highest quality data in the industry and backed by an incredibly passionate and committed 24/7 customer care team. We serve 10 of the 10 top global brands, single property independent hoteliers and everything in between.  Last year we passed the 40,000-property mark and we have customers in 168 countries around the world but the hotel industry is vast so we've a long way to go. OTA Insight's core Rate Insight product delivers actionable intelligence in a clean and modern UX When did you first become interested in hotel software? We had thousands of hotel F&B customers at HotSchedules so I hosted a number of hotel-specific focus groups and advisory boards. This gave me a good insight into the complexity of running a successful hotel operation but also the similarities with the restaurant tech landscape - a huge industry dominated by a lot of legacy on premise or homegrown systems, crying out for the next generation of cloud providers. It’s incredibly exciting to see a new wave of innovation disrupting the industry and I feel lucky to be part of it with OTA Insight. How would you characterize the learning curve moving from restaurant tech into hotel tech? It’s a steep learning curve because there are some nuances that make hospitality technology unique from other industries. For example, it’s B2B but with a very small ‘B’ where your target users are generally time-starved and running incredibly dynamic businesses within the four walls of their hotel. The customer journey and experience needs to be near seamless or you can churn customers faster than you acquire them. I was surprised by just how data-driven the industry is, in particular the Revenue Manager community. They assimilate a huge number of data points to make very dynamic decisions that have a profound impact on their bottom line. Hospitality is first and foremost a people and service-based industry but it’s amazing how many data geeks are hiding in plain sight! What makes 'hotel tech' different than just 'tech'? The hotel industry is going through a period of huge and irreversible transformation, a lot of it being driven by competition for customers’ dollars and data. The innovation cycle may have been sparked by the OTAs but it’s increasingly driven by hoteliers who are aided by the next generation of tech providers. You hear a lot of buzzwords in the industry like ‘personalization’, ‘artificial intelligence’ or ‘open APIs’ but fundamentally hoteliers are leveraging technology to do what they’ve always done - get to know their customers intimately so they can deliver a personalized experience across the entire customer journey. ‘Tech’ in many other industries focuses on process optimization or automation often at the expense of the customer experience.  In ‘travel tech’ the customer is very much in the driving seat. Do you think it's harder for hotel tech companies to raise capital relative to general tech companies? No, in fact quite the opposite. If you look at the general criteria for tech investors - a big addressable market, historical underspending on technology and business model disruption - then the hospitality technology vertical represents a huge opportunity. However, investors are looking for the right kind of investments, i.e. companies that have a good product market fit, growing in a healthy way with a clear path to profitability. What's the single biggest opportunity that hotels are missing today? It may sound a little self-serving but there’s still a huge opportunity in data and analytics. Good data enables better marketing, better pricing and better distribution. The data analytical tools that were once the preserve of larger, more sophisticated operations are now available to independent hotels. These tools enable really impactful decisions to increase revenue and improve profits - who doesn’t want that? How will the hotel technology landscape be different in 5-years? One of the most practical, pressing challenges for the industry is data integrity and connectivity across systems and networks. There's also a lot of legacy technology to refresh, introducing additional data migration and integration headaches. Hotel systems will need to integrate to deliver on some of the more ambitious business strategies so after years of investing in tech, we're seeing hotels spend more time and energy ensuring their systems play well together. A lot of the new technology providers are committed to open APIs, so we expect to see a more open and integrated landscape over the next five years that will fuel the next wave of innovation. Do you think that branded hotels have better or worse technology than unbranded properties? It's not a case of better or worse, just different. Branded properties have access to robust technology platforms that are tried and tested at scale. Unbranded properties can benefit from technology platforms that are maybe a little more bleeding-edge. Most of the new cloud-based technology providers (like OTA Insight) are providing systems that serve the needs of both segments, so the traditional lines are blurring. What's one piece of advice you have for engineers and entrepreneurs who are interested in starting a tech company that serves hotels? It's tough to succeed in the hospitality tech business but it's an amazing industry. Have a clear mission, listen to your customers and be humble - good things will happen. What's one podcast, newsletter or book that you recommend hoteliers read if they'd like to eventually move into tech? Assuming they're jumping into a tech start-up, I'd recommend "The Hard Thing About Hard Things" by Ben Horowitz because it's full of pragmatic advice for working through the tough problems faced by most tech companies. What is your favorite hotel in the world? I’m a big fan of the historic hotels in each city because they often play an important part in local history and have tons of backstories. One of my personal favourites is the Shelbourne Hotel in Dublin, founded in 1824. What is one thing that most people don't know about you? I come from a family of 12 children: 10 sisters and one brother. I learned a lot about the art of negotiation and compromise around our family dinner table.   Related Article: Eight Roads Ventures backed OTA Insight is picking up where STR leaves off

10 pieces of advice for innovative hotels according to top tech executives

by
Hotel Tech Report

1. Don't overestimate the difficulty of delivering a personalized experience “Hoteliers believe delivering personalized experiences is hard. I have always looked at technology as an enabler for innovation. With the right enablers, hoteliers can take advantage of technology to make personalization easy, which is one of the cornerstones of our eInsight CRM product.  I think either hotels don’t know where to start with their data, or they haven’t democratized access to the right people who can leverage it to drive home personalization. Hotels that standardize 2-way communication among systems and make data integrations a priority are the ones able to break through and outperform in personalization. Information is more relevant, robust and customized when all the systems are speaking to the touchpoints guests have in the journey.” ~Charles Deyo from Cendyn eInsight CRM “Many hoteliers believe that personalisation is not important enough to spend time on. But in reality, the cost of standardised digital communication, and generic upsell offers and promotions is enormous. Hotels are literally losing money with every guest that is walking through the front door.” ~Erik Tengen from Oaky Upsell Software   2. Place importance on vendor quality rather than size “Unfortunately, in this industry, the size of a hotel tech vendor sometimes is overplayed or overemphasized, while the quality of product and engineering teams is underemphasized. People often assume that large companies have better products simply because they can afford better engineers relative to smaller companies. This is far from the truth—I've seen very large companies struggle with their platforms and engineering initiatives. And I’ve seen smaller companies blow away the industry with their solutions. The important thing for hotels to remember is not to judge tech vendors by the size of the company, but by the quality and capabilities of their product and their dedication to customer service. It seems obvious, but happens more often than you think.” ~Gautam Lulla from Travel Tripper RezTrip CRS   3. Understand that artificial intelligence will not take your job “Hoteliers believe that revenue managers will lose their jobs when artificial intelligence gets good enough. I believe that artificial intelligence is going to make revenue management an even more valuable skill because it will take more insight and analytical rigor to stand out from the competition set in a data-driven world. Hoteliers are used to looking at PMS as a cost centre of the hotel. With the maturity of Cloud PMS, the paradigm has changed. A PMS should not be considered as cost, but as a system that will help them grow revenues and business. Also, for most hoteliers, deciding on PMS is an operational decision whereas I feel it should be more of a strategic decision.” ~Aditya Sanghi from Hotelogix PMS   4. Stop running your operations with pen and paper “Perhaps the most common belief I used to hear was that the Concierge didn’t need an application because they could use Excel or their logbooks. We obviously felt differently especially after spending time behind the desk and seeing the amount of work done manually and the importance of providing a tool to enable the team to be more efficient. We believe the role of the Concierge should be in the center of the hotel operation since their work touches so many departments and has such a significant impact on the overall guest experience. A good Concierge team does the job so well that they make it look easy. What is often not recognized or seen is the volume of work being done behind the scenes to deliver such a great guest experience. Investing in a tool allows the team to be more efficient and spend more time and attention on the guests. I believe the reason guests come back now is mostly because of the way the Concierge and other team members make the guests feel when they leave, more so than just having a beautiful hotel. Without a tool such as ALICE, it is very difficult to be efficient and create that great guest experience.” ~Adam Isrow from ALICE Hotel Operations Platform   5. Leverage technology to decrease staff churn “I think the single biggest misconception is that hoteliers think the solution to their traveler personalization problems is to invest in traveler facing technology and create an omni-channel experience.  The biggest problem hoteliers face is actually their staff turnover. What is the point of having traveler facing technology, without experienced staff that have the right technology to empower them to deliver on the brand experience?  Your staff must always come first if you want to truly personalize and fulfill your brand promise. This means hoteliers need to balance their traveler facing and staff facing investments more effectively.” ~Kevin Brown from Amadeus Hospitality   6. Place less emphasis on meeting budget in volatile markets “Hoteliers are not comfortable making changes to prices without knowing the effect it has on their ability to reach budget. In a volatile market, too much emphasis is placed on meeting budget and making safe pricing decisions that ultimately limit a hotel’s revenue achievement. Placing an emphasis instead on demand-based pricing will help secure the highest possible revenue from the marketplace. "Some hoteliers believe it is prudent to wait until business is strong and making more profit before they invest in “nice to have” tools such as revenue management software. That is like saying an athlete should wait until they can run faster before they buy good running shoes. It is the revenue management system that will enable them to maximize their yield and create the bigger profits." ~Ravi Mehotra from IDeaS Revenue Solutions   7. Embrace technology, software is cheap and extremely easy to use today “Most hoteliers are skeptical about technology - for good reason.  Tech companies have a long history of over promising and under-delivering.  As a result, new technologies are not often eagerly adopted by experienced hotel people.  They would rather "wait and see" before embracing yet another "shiny object" tech solution.  The last thing we need is another complicated software program that takes up all of our time and delivers little value.  Tech providers need to focus on the benefits of their solution and design products to require minimal effort for maximum value.  Don't assume that because hotels are multi-million dollar businesses that we like to sit around on our laptops all day - we have become successful by taking care of travelers - and each other - with the service and care that we'd provide to our own families.” ~Del Ross from Hotel Effectiveness Labor Management System “The most common misconception about technology is that it's too expensive. Hoteliers have this misconception because they don’t fully understand the value that the technology brings. They see it as a cost rather than as a profit center. Hoteliers often buy technology the same way they would buy a TV or a pillow. And because of that, tech vendors have been forced to limit their innovation.” ~Marco Benvenuti from Duetto Revenue Management   8. Don't ever manually price hotel rooms “They believe they can do good or decent manual pricing... but in reality there is no way a human can do even a decent job at pricing a hotel. The math behind that statement is really simple, there are two main reasons why a human has absolutely zero chance versus an automated AI system: 1) The sheer scale of the problem. If you're a hotel with 5 room types, 4 variations on each room type (breakfast/cancellation), bookable 365 days in advance, and want to update each price once per hour then you have 0.49 seconds per price to do your analysis and set the price. Even if you simplify the problem drastically, let's say you have a fixed additional cost for breakfast & cancellation, that you just want to update the prices once every four hours, and that you only allow your guests to book in the last 30 days, then you still only have 96 seconds per price to do the calculations and set the price. The sheer scale of the problem makes it impossible for any human to keep up and do a good job. 2) The complexity of the problem. It's important to acknowledge that no price is an isolated island, if you change the price of one room type for a particular arrival date then it will have an effect on all the other room types for the same arrival day. But that's not enough, it will also have an effect on the adjacent days as many people stay more than one night and some one-nighters are flexible and price sensitive. There is this ripple effect and you need to present the optimal set of prices, not the price that is thought to be optimal for one specific room type. Quite often the optimal price for one room type will have a negative impact on the overall revenue, and to calculate the optimal set of prices is both hyper complex and very computationally intensive, it simply cannot be done by a human. Humans should focus on strategic revenue management, not at setting prices.” ~Leif Jaggerbrand from Atomize   9. Stop paying massive sums for integration fees when the entire world has moved to open APIs “Hoteliers that its extremely hard and expensive to integrate different software solutions. Having built our own PMS with open API, I can confidently say that this is no longer true, and we stimulate hoteliers to integrate as much as possible to make their lives easier.” ~Matthijs Welle from Mews Systems   10. Use technology to create more personal interaction, not less “Messaging is impersonal, you can’t replace in-person interactions.” The aim of messaging is not to replace in-person interactions or even phone calls, it is to fill the customer service whitespace or void that exists today. There are a large portion of travelers and consumers today who are not communicating with your organization because you may not have the proper means. With the increasing influx of technology separating the hotel staff and guests (e.g. OTAs and Mobile Room Keys), messaging is one of the main components connecting hotels with their guests today.” ~Chris Hovanessian from Whistle

Why these 3 hotel groups love Travel Tripper's RezTrip CRS

by
Hotel Tech Report

In our Product Deep Dive series, we go deep into one solution to help hoteliers evaluate and assess the best software for their specific situations. Vetting vendors is an intensive process. It starts with the discovery phase, where online research and consultations with colleagues inform the initial list of promising companies. Next, that list is whittled down after deeper dives into individual products, watching demos, and likely speaking with individual vendors. Finally, the selection happens -- and the truth eventually reveals itself. After implementation, and a few months of using the service, you’ll revisit and evaluate. Was it the right decision? For the following hotels, the answer was a decisive ‘yes’ after choosing a new central reservation system. When discussing the search process with Travel Weekly, Brian Christensen, the corporate VP of revenue management and distribution for American Casino & Entertainment Properties, noted that his team “spent a lot of time on discovery” and “looked at some of the best.” The vendor evaluation process is a deliberative marathon that results in a decision with wide-reaching organizational implications. With that in mind, it's instructive to consider why hotels select one vendor over another. These insights may accelerate your own decision process when selecting a new central reservation system for your hotel. Here's why these hotel groups selected Travel Tripper’s RezTrip CRS. Meriton Group: Optimized for direct bookings on both mobile and desktop Over the past two years, hotels have become acutely aware of rising commission payouts to intermediaries. To increase direct bookings -- and reduce reliance on third-parties -- many hotels have focused their online efforts on simplicity and clarity. When potential guests can make a decision as quickly as possible, it enhances the search experience and leads to stronger performance in the direct channel for hotels. When comparing CRS providers, Meriton Serviced Apartments sought an integrated system that would power a shift from high-commission OTA channels to direct bookings on both desktop and mobile. After implementing RezTrip CRS, and its smart rate and revenue management tools, Meriton enjoyed a significant spike in direct business, says Matthew Thomas, Group General Manager of Meriton Serviced Apartments. “Our direct bookings instantly increased once we launched RezTrip across our portfolio of hotels. The newly enhanced mobile version has enabled us to capture the growing global shift towards mobile-device made bookings.” To successfully capture more mobile bookings, hotels must address consumer reluctance to purchase on mobile devices. The comScore Mobile Hierarchy report explored the “m-commerce gap,” or the disconnect between time and money spent on mobile.   For hotels that want to drive more mobile bookings, this disconnect highlights some key hurdles to overcome, such as improving navigation and providing more detailed product information. After evaluating all options, the Meriton team felt that the Travel Tripper technology excelled. It made the mobile experience just as easy to use as on desktop, and effectively translated hotel’s engaging imagery to the smaller screen. Functionality: More direct bookings through an integrated booking engine optimized for conversion on both mobile and desktop Business impact: Since launching with Travel Tripper in summer 2016, Meriton has experienced significant uplift in conversion rates across its properties, particularly in its mobile channel, where it is using RezTrip’s recently redesigned mobile booking engine. Mayfair Hotel: Conversion-optimized booking flow By 2020, Euromonitor predicts that 44% of sales will be made online in the travel industry -- more than any other industry. With such a massive share of commerce occurring through digital channels, hotels must implement conversion-optimized reservation systems to compete.     When the Mayfair, a boutique hotel in Miami, began evaluating new central reservation systems, the mandate was clear: Replace the existing clunky booking technology, with its poor usability, small images, and hard-to-read descriptions. Rich content engages guests, and so the hotel’s new solution had to be modern, usable, and emphasize the unique appeal of the property’s elegant, understated style. In addition to featuring bolder, more prominent images, rooms should be easy to browse, select, and book. Mayfair wanted a streamlined booking flow that didn't take too long to complete. RezTrip’s two-step process fulfilled this objective, resulting in more lookers converting to bookers on Mayfair’s website. Functionality: Simplified browsing with rich content, and a booking flow streamlined into two steps to optimize conversion across devices; Business impact: Mayfair saw an 84% increase in year-over-year website revenue, alongside a 76% increase in direct bookings and a 60% increase in conversion rates. Stratosphere: OTA-like rate controls Despite intensive marketing efforts by hotels, direct bookings remain flat. To succeed in earning more direct bookings, hotels must mirror some of these platform’s most favorable features. Consumers turn to OTAs because of usability and utility. This is especially true on mobile, which is perceived as easier to use with instant updates, discounts and streamlined search and booking.     Another growing threat to direct bookings is metasearch, which also offers finely-tuned mobile experiences, such as Google’s new combined flight/hotel user experience. To compete for bookings, hotels need more granular rate controls that level the playing field with both OTAs and meta. As a casino and resort located in Las Vegas, the Stratosphere has many rooms spread across multiple room types, and, given its size, has high volume and multiple sources of revenue. The resort’s local market is also extremely competitive and prone to demand fluctuations, which requires more precise revenue optimization to adapt to changing dynamics. To improve the precision of its revenue management in the direct channel, the Stratosphere team prioritized the ability to personalize rates and offers with best-rate guarantees, strikethrough bookings, room countdowns and geo-targeted rates with Dynamic Pricing Rules. This functionality allows the hotel to do things like include breakfast in rates displayed to European travelers. With more control over individual rates and personalized offers, the hotel was able to enhance its revenue management capabilities. Functionality: Granular rate controls, such as Dynamic Pricing Rules with geo-targeting, as well as urgency messaging such as Stricter pricing and “rooms remaining” countdowns. Business impact: The stratosphere Hotel doubled the conversion rate within four months of integrating RezTrip CRS. Learn more about Reztrip CRS and Booking Engine screenshots   RezTrip is an integrated solution that drives targeted results TravelTripper’s RezTrip is a trifecta: a robust central reservation system, an integrated booking engine, and a comprehensive distribution solution. It combines these three important tools into one coordinated e-commerce platform which gives hotels greater control over how rates are merchandised and distributed. The CRS connects directly to your hotel’s property management system, keeping reservation details, availability, and rates up-to-date without manual intervention. The outcomes are impressive. Meriton Serviced Apartments achieved an increase in direct bookings by switching to Reztrip's mobile-optimized booking engine. Reztrip also optimizes revenue across other key channels, as the single reservation system that connects to OTAs, GDS, metasearch, and even call centers. Mayfair leveraged RezTrip’s intuitive and elegant interface booking flow to increase website revenue 84% year-over-year. The integrated booking engine’s customizability allowed the hotel to build a powerful solution that met their exacting specifications. The Stratosphere more than doubled the conversion rate on its website, relying on geo-targeted Dynamic Pricing Rules and integrated rate matching to convert more lookers to bookers. Other features that improve conversions include automated email retargeting, strikethrough pricing, and “rooms remaining” countdowns. Inspired to experience RezTrip? Click here to learn more.

A 1,000 word micro-history of hotel distribution

by
Simone Puorto

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.

Arise Travel is the hotel industry's secret weapon against the OTAs

by
Hotel Tech Report

Arise Travel is an early stage startup that most hoteliers haven’t heard of today but the firm’s technology could be the answer to the seemingly never ending direct booking wars if things go according to plan.  The firm was founded in December of 2017 by two early (former) employees at cloud property management system provider Frontdesk Anywhere who got loads of experience dealing with intermediaries while building the business. Every industry has intermediaries and those intermediaries deserve to get paid for driving business to their partners.  Before we jump into how Arise can help build healthier (and more equitable) relationships between OTAs and their hotel partners let’s take a quick 10,000 foot view of where the relationship sits today.   Why haven't the OTAs been broken up yet? The problem with the OTA-hotel dynamic is mostly a result of consolidation that has surprisingly not been addressed effectively by most antitrust authorities.  The reason that antitrust authorities haven’t addressed this issue is likely because the duopoly actually benefits consumers (by delivering lower prices for accommodations) and many of the world’s most powerful antitrust authorities have mandates to protect consumers rather than businesses.   Here’s a quote directly from the U.S. Department of Justice Antitrust Division website about the group’s mandate: “Competition in a free market benefits American consumers through lower prices, better quality and greater choice. Competition provides businesses the opportunity to compete on price and quality, in an open market and on a level playing field, unhampered by anti competitive restraints.” As such, it is unclear that the Booking/Expedia duoply (which is estimated to control ~80% of the market today) will ever be broken up given the focus on consumer protection.   Arise shifts the focus from direct bookings to lower commissions Historically, most of the companies that help hotels gain leverage against OTAs today have been focused on driving new direct bookings. The general idea is that by helping hotels increase their mix of direct bookings - these hotels will pay lower absolute commissions in the short term and also in theory should be able to negotiate lower commissions over the long haul.  The earliest companies to play in this space were Triptease, Stay Wanderful and Hotelchamp.  These direct booking platforms help hotels optimize their website performance to increase conversion and effectively maximize their funnel rather than bring new prospective guests into it.  More recently, The Hotels Network and 123Compare.me have jumped into the fray. Similarly, digital marketing agencies began positioning around direct bookings with firms such as Screen Pilot, Travel Tripper and TravelClick leading the pack.  Ultimately the goal of any great hotel digital marketing agency should be to drive bookings at a lower cost relative to OTA commissions.  In addition to the benefits of website optimization based direct booking platforms, digital marketing agencies help bring new prospective guests into that funnel through digital marketing on paid channels such as Google, Facebook, Email Marketing and Instagram. So tech companies have gone a long way to help hotels gain leverage with the OTAs by driving direct bookings via digital marketing, website optimization, etc.  While this is a great approach, Arise Travel has a surprising way to end the direct booking wars - and the team wants to do this without a single shot fired.   With an OTA duopoly, is there a big enough market for Arise? While Expedia and Booking have approximately 80% of the OTA market, there are many other stakeholders in the accommodation supply chain.  The total retail value of accommodations globally hovers around $570B and $200B of that gets passed to the hotel industry (Statista).  Booking and Expedia revenue for all business units combined (incl. airline, activities, etc.) are ~$25B which shows that even though they have huge OTA market share, they actually have modest shares of the overall intermediary markets. So who else is in this intermediary market? Some examples include: traditional travel agencies, corporate travel businesses, smaller OTAs and OTA affiliate partners.  Arise wants to help hotels fight the OTAs by mixing in more cost effective 3rd party bookings. When a hotel today forecasts a period with high demand, they’ll often use their channel manager to shut down distribution in what are called “closeout dates.”  Closeout dates include peak times like big conferences coming to town, city wide events, etc.  That sounds reasonable, right? Wrong. When hotels activate these closeout dates they are intentionally leaving bookings on the table today to save themselves for lower commission bookings tomorrow.  Then, as occupancy begins to rise, hotels are able to increase rate which is why they’re ok to leave those bookings on the table. In super simple terms, let’s say a hotel will pay 20% to the OTA and 0% incremental for direct bookings (because many direct costs are fixed).  The reason they shut down OTA inventory is because they believe that the rate increase they can command tomorrow will not justify the distribution cost today.   Arise Travel founder Nadim El Manawy believes that billions are being left on the table and thinks that commissions should be dynamic just like room rates.  Everyone knows that revenue management software is essential to running a profitable hotel business.  If you charge too much - you lose bookings. If you charge too little - you leave profit on the table.  Revenue management systems help hoteliers make sure that they can walk that fine line to maximize profitability and Arise Travel can have the same effect on 3rd party commissions.   Here’s how Arise Travel’s technology works to supercharge your existing channel manager Arise automatically downloads closeout dates from your channel manager where your hotel is leaving bookings on the table.  Your revenue manager can then go into the Arise Travel dashboard and input commission rates that they’d be willing to sell hotel rooms for during those periods.  Rates and desired commissions then get pushed to Arise Travel’s network of intermediaries so hotels can sell rooms to prospective guests on 3rd party channels without commission negotiations or even the need for a traditional contract. Let’s say, for example, that The World Cup is coming to your city next summer so you don’t want to allow Expedia bookings at 20% commission knowing that you’ll fill your hotel regardless.  You can’t renegotiate with Expedia but you can now login to your Arise Travel dashboard and notify intermediaries like small OTAs and corporate travel agencies that you’d be willing to sell rooms for a 7% commission during those times.  You can even set variable commissions on a per room type basis, by rate code, day of the week and even by channel. Eventually the technology will make this all automated through integrations with top rated revenue management systems. Those intermediaries can then accept those terms and list your rooms for booking on their channels with automated rules.  The big value prop for these intermediaries is that they can now sell accommodations that aren’t available on Booking and Expedia - this helps them differentiate and ultimately grow their businesses.  You can now get rooms booked for a reasonable commission while driving up rates during this peak period. Consumers win by accessing your inventory in more places, distributors win by getting access to unique inventory and you win by maintaining reasonable commissions and selling your inventory more quickly.  Arise’s technology handles all commission reconciliation and payouts automatically to save your team time. The entire payment and service history can be viewed at any time providing ultimate transparency into your channel management strategy. If Arise Travel can get big enough, it will eventually pressure Expedia and Booking to accept variable commissions that are market based.  While Expedia and Booking may see short term headwinds from a concept like Arise Travel hitting scale, this is ultimately bringing much needed fair market dynamics and transparency to the industry which will lead to healthier hotel-OTA relationships and more innovation.  Nadim has a massive vision for the industry and he needs the help of our global hotelier community to jump on board with what we at Hotel Tech Report believe is a “no brainer.” We recently sat down with Nadim to chat about his background, the future of hotel distribution, what’s next for Arise Travel and more. Hotel Tech Report's exclusive interview with Nadim below   What was your background prior to starting the company? Before co-founding Arise, I led sales and partnerships for 4+ years at a cloud-based property management system company in San Francisco called Frontdesk Anywhere. Prior to moving to the Bay Area in 2011, I worked in Shanghai and grew up in Belgium. What made you decide to jump in and disrupt the travel distribution space? I met Alex Lamb, my co-founder in this business, at Frontdesk Anywhere where we were the second and third employees. Alex lead the engineering team there for 4+ years. Being in the PMS business, we became very familiar with how things work on the operational side at hotels, but we also had to work with many players in the distribution chain such as channel managers, GDS and wholesalers. We got to see how things are patched together behind the scenes today. Many of the hotels we worked with were very vocal about how a few online travel agencies were controlling their distribution and how much they were paying in commissions and fees. We also saw how the fragmentation of the PMS space and old technology used by existing intermediate networks was making it difficult for travel companies to gain access to hotel data and efficiently transact with hotels. We starting thinking about how we could use emerging technology to fix many of these problems, allowing new travel companies to grow faster and help move the industry forward. Who was your first customer? One large player in the corporate travel space (we can’t name the company yet) is taking a chance working with us in order to solve some of the problems and inefficiencies they face today. Our experience with hotel distribution technology gained over the years when building and maintaining a cloud PMS combined with our knowledge of distributed ledger technology and how it can be applied to travel distribution is what made them want to work with us. What is there so much excitement about Arise Travel as a disruptor? We build technology that helps hotels gain more control over the inventory they share with their partners. Our distributed ledger technology lets hotels enforce rate parity at the point-of-sale and dynamically adjust their commission rates based on demand, significantly increasing hotel profitability. Who is one mentor that has really helped you scale the business?  I need to mention two people who have been very helpful since the beginning. Jing Zhou, who was at Hyatt for many years leading e-distribution for Asia Pacific, has been sharing her knowledge on hotel operations and distribution strategies. She has helped us stay focused when building our technology to make sure it fits with hotels needs. Varsha Rao, who was head of Global Operations at AirBnB for many years, has tons of experience in building and scaling businesses. Her constant ideas and advice on ways to start and grow the business have been extremely helpful. What's one big misconception that hoteliers have about distribution? Many hoteliers believe that they are powerless to change the distribution technology they’re dependant upon. Most hoteliers are quick to complain but because they don’t view distribution technology as a core competency, the idea of investing resources into something they’ve never taken ownership of before seems daunting. This mindset may have been reasonable in the past, but not anymore. Distributed ledger technology will show hotels that updating their distribution technology is possible with very little IT investment and without affecting their operations and current distribution channels. What's the most surprising thing you've learned about hospitality distribution since founding the business? That most innovative technology being worked on focuses on the travel search and booking process, but technology that can improve the traveler experience after booking is held back because many of these services have to rely on outdated distribution technology to function. If you could partner with any vendor in hotel tech, who would it be and why? AirBnB. Our technology creates a shared source of truth for hotels and OTAs, making it possible to automate commission reconciliation processes.  With this automation in place, it becomes feasible for hotels to start setting variable commission rates for the inventory they send to OTAs. Instead of closing entire channels during high demand periods, hotels can lower their commission rate to maximize their profitability. We can help AirBnB grow its hotel business by accepting variable commission rates from hotels, giving them access to desirable inventory that is currently unavailable to other OTAs using a fixed commission model. Where do you see Arise in 5-years? Most of the intermediaries that survive of rate arbitrage and don’t bring real value to hotel distribution will disappear. We believe the efficiency and trust that distributed ledger technology can bring to the industry will drive down the commissions paid by hotels for bookings. I’d hope most hotels, including independent, will be benefiting from the control and efficiency our technology will bring to their online distribution. I’d expect many players involved on the supply and on the demand side to be using our technology. Do you have any new products or feature launches? Variable commissions hotels fully control and payouts are automatically handled. Starting with high demand periods, hotels can decide how much they are willing to pay in commissions for any given date, room type and rate. Today hotels pay fixed high commissions to OTAs and at times of high demand often take the risk to close those expensive channels as they are confident enough they’ll drive enough direct bookings to fill their hotel. Hotels no longer have to do that as they can now set variable commissions that they are willing to give OTAs on those high demand dates. We provide the transparency and control to hoteliers and we automate the commission payouts so it doesn’t add any more work for hoteliers. We work with hotel channel managers and switches. To get going hotels can contact us or also check with their service provider to see if they are already connected to Arise. Is there anything that the community can do to be helpful for you? We’d love for people involved in hotel distribution on either the supply or demand side to talk to us. The more people that understand and get comfortable with the idea that upgrading distribution infrastructure isn’t such a daunting task, the faster everyone will be able to benefit from it. Advances in Distributed Ledger Technology actually make distribution less complex than the processes in place today. What's one piece of advice that you have for any entrepreneurs looking to get into the hotel tech space? Make sure there’s a clear need for your solution in the space and if so, have a very good understanding of all the current players, how they work together and all the moving pieces that shape today’s hotel tech space.  

These are the 6 most powerful IDeaS G3 revenue management software features and services

by
Hotel Tech Report

In our Product Deep Dive series, we go deep into one solution to help hoteliers evaluate and assess the best software for their specific situations. Among the growing number of revenue management tools, IDeaS has established itself as one of the world’s top revenue management systems. Its flagship IDeaS G3 RMS processes 100 million revenue-enhancing decisions each day across 1.6 million rooms, translating rich data inputs into a dynamic revenue engine for peak profit performance. Here are 6 of the features of the IDeaS G3 system that we most certainly can’t live without.     #1: Demand-based pricing by room type One of the latest IDeaS G3 RMS features allows revenue managers to yield by room type. For example, let’s say the system detects a spike in demand for the “deluxe double” room type. It will automatically increase the price for that room type -- without also boosting prices on other room types. Yielding by room type unlocks a purer yield management approach, with rates priced according to guest demand and price sensitivity for specific room types, rather than simple attributes or inflexible rules. This reduces the burden of manually yielding across multiple room types, says Angelo Fernandes, SVP for Terranea Resort: “This technology has enabled us to look at inventory by type or segment and actually make decisions to yield room types uniquely across different channels. Terranea is very unique, with 582 keys and a mix of rooms, suites, villas, casitas, and bungalows. IDeaS helped us understand pricing, availability, and demand for each room in order to optimize profitability.” The demand-based pricing approach gives revenue managers a more accurate, holistic view of a hotel’s demand profile. Automation ensures that each room type is priced appropriately for the demand, which yields the most profitable business mix. Sometimes dynamic room-type pricing can be unintuitive, says Fernandes, where smaller rooms are actually priced higher than larger, more premium ones. But it’s all based on actual demand rather than instinct or historical performance. “Effectively, each room type has its own BAR, so we’re now selling more rooms at the correct rate, and we’re also avoiding overbooking a certain room type and then having to move guests to a bigger room.”   The IDeaS RMS “at a glance” dashboard     #2: Virtual Revenue Management Service (VRMS) Most hoteliers feel under-resourced. Yet, smaller properties are naturally at a disadvantage when it comes to resources -- especially independents that find themselves in direct competition with “soft” brands that don’t directly rely on their parent company’s identity. These brands appeal to a different cohort than the majors, while still taking advantage of the parent’s revenue management expertise. That’s not to say that brand-affiliated hotels don’t also feel the squeeze when it comes to finding resources to devote to revenue strategy. IDeaS set out to solve this issue for any hotel, with its Virtual Revenue Management Service. VRMS helps hotels accelerate their revenue strategy by assigning an industry revenue expert to work directly with hotel staff—no matter the business objective, resource mix or skill level. The three phases of VRMS align hotel management and staff around the techniques and habits of a revenue-focused culture. With the end goal of establishing clear standard operating procedures around revenue optimization, VRMS ensure that hotels of all kinds benefit from the revenue management revolution.   #3: Ideal Pricing delivers continuous pricing Automation is at the core of the IDeaS approach to revenue management. Through artificial intelligence and machine learning, it makes precise revenue management decisions that most revenue managers would never be able to see. Ideal Pricing uses deep market intelligence, such as search penetration, competitor rates, booking trends, and reputation scores, to intelligently forecast demand and power a continuous pricing model.     The automated system prices room types at the ideal rate for a given product and set of guestroom attributes. The ideal pricing model intelligently prices by day or length of stay, while also allowing hotels to price within a range or set specific price levels for certain attributes. Revenue managers can link products to BAR or independently price as agile rates to dynamically flex products based on unique demand and attributes. The best part of this is that it all happens in real-time and in the background, so revenue managers can focus on tactics and strategy rather than manual data entry. The AI-powered analytics recognize relationships between all rates and segments, continuously making the smartest pricing decisions based on the latest information. With Ideal Pricing, hoteliers achieve peak profitability decoupled from a traditional rates-based framework.     #4: Support before, during, and after implementation It’s a common refrain here at HTR: customer support is always a core consideration when evaluating new partners for your hotel. Poor support can scuttle even the most advanced product; without knowledgeable resources available before, during, and after the implementation, a tool risks failing due to low adoption and minimal integration into existing processes. IDeaS sees itself as an ally in implementation, and, as a result, provides robust implementation support that supports a hotel’s efforts to nurture a sustainable revenue culture. The clear plan is to train staff at the outset, as well as through continuous learning so that everyone has the tactical knowledge necessary to get the most of your chosen software. This includes how to read reports and what actions to take action based on those reports.     #5: Rate publishing tool Most hotels realize that all distribution channels are not created equal. For peak profit performance, the highest value booking at the lowest acquisition cost. Individual channel performance, plus overall channel mix, equals the optimal revenue strategy. To achieve the optimal mix, hotels need a rate publishing tool that consistently and accurately updates rates across all chosen channels. This Functionality is integrated into the workflow, making it simple and easy to publish rates across channels. No more logging into multiple extranets and manually entering the same information multiple places. It’s all about working smarter and more strategically. Hotels also realize that there’s a trust issue when it comes to rates appearing equal across channels. Rate parity breeds confidence, and an integrated rate publishing tool empowers hotels to build that confidence through seamless rate management.     The Demand360 view highlights the competitive market data alongside your hotel’s forecast and decisions.   #6: Limited Data Build functionality Launching a new hotel is both an exciting and challenging time. It's a fresh slate to serve a new segment or expand in an existing market. The freshness also poses a problem for revenue management: Without any historical data, how should a hotel be properly priced in its early days? Pricing affects positioning; getting the pricing wrong can alter demand and consumer perception. The Limited Data Build feature addresses this existential issue for new hotels. To forecast demand in the early days, IDeaS will clone data from existing hotels with similar business mixes to provide baselines for demand and predicted guest behavior. One new brand in Germany, Me and all, found that the baseline data helped beat its ADR expectations by 15% in the first half year. “Up until now, one of the biggest problems has been forecasting how a new business will unfold. Normally, we rely heavily on a hotel’s historical market data besides examining the public price points of other hotels to get a feel for the market. On this occasion, however, there was a bigger knowledge gap to fill. -Monika Sand, Corporate Manager Revenue at Lindner Hotels AG Bonus! Lucky #7: Smart Space The complexity of managing revenue grows exponentially when adding groups and meetings to the mix. For larger hotel groups, there may be an additional layer of communication between a centralized revenue management team and property-level sales managers. SmartSpace is a dynamic cloud-based strategy application that provides a revenue-focused visual analysis of meetings-and-events trends and performance. Thanks to more intelligent analysis, hotels can finally optimize revenue on key demand days by using detailed demand profiles to price more strategically.     The SmartSpace Functionality guides hotels on forecasted demand, performance trends, market competitiveness, and pricing strategy. Through data and visualizations, it provides a guide to pricing decisions, as well as prioritization of RFP responses. Demand-level data can also reveal patterns across many meeting room types, to reveal which rooms are most popular and which were underutilized. These patterns inform the optimal configuration of those event spaces to ensure that supply meets demand. For instance, rarely-used rooms could be combined or repurposed to better suit the needs of today’s event and meeting organizers. “Smart Space makes it a lot easier for us to study our booked and lost business and better prioritize sales team efforts,” said Christine. “To be able to pull vast sums of relevant data and see that presented in an intuitive and consumable format is such an advantage. It’s the first step of some very exciting progress we’re seeing in meetings and events.” -Christine Wassell, director of revenue optimization for Radisson Hotel Group

How to determine the best channel manager for your hotel

by
Hotel Tech Report

A channel manager is a powerful piece of hotel technology that increases occupancy, saves time, and maximizes profits. It allows a hotel to expand its reach and visibility online, as well as more easily manage its rates, availability, and reservations. With a channel manager, hotels can connect to hundreds of online distribution channels in real-time. This allows the hotel to boost visibility (and ultimately reservations) with almost no risk of being overbooked. Without a channel manager, hotels must manually update inventory and availability on each channel -- a tedious, time-consuming process that often creates inconsistencies across channels. A channel manager also empowers hotels with greater control over the channel mix. Revenue managers can set specific targets on a channel-by-channel basis, and then adjust inventory and/or pricing on individual channels to optimize revenue. By using this dynamic approach, Revenue managers can more precisely manage a hotel’s distribution and prioritize the most profitable channels at any given time. How hotel channel managers fit into the distribution picture, per Altexsoft.   Presently, only about 50% of hotels worldwide employ dedicated channel managers to help them manage and optimize distribution. If your hotel is considering a channel manager, here are the top criteria to use when choosing the best channel manager for your hotel.   #1: Real-time connectivity and pooled inventory One of the major benefits of hotel channel managers is real-time connectivity; without it, the risk of overbooking remains. The best way to accomplish this real-time synchronization is through two-way XML connectivity. Instant sync ensures that room rates and availability are current and accurate across all chosen channels. Without that assurance, a channel manager will be less effective in increasing your bookings and resulting revenue. Effective channel management also requires a pooled inventory model, which means that your room inventory is shared across channels, rather than allocated manually on a channel-by-channel basis. Pooled inventory ensures accurate availability so that rooms can be advertised across all channels at the same time, without fear of overbooking.   #2: Channel optimization To distribute inventory on the most optimal channels for your hotel, you'll first need to know which channels matter most. Look closely at which channels a potential channel manager supports. If any of your most important channels are missing, consider another vendor. Channels vary dramatically by region.  Also: refer to your guest personas (or take the time to do that critical work!) to determine which channels help you reach those kinds of guests. It's also revealing to consult your CRS reports to surface the popular booking channels among your target demographics. “If you’re a hotel looking to attract Chinese travelers, for example, you will want access to the booking channels that Chinese travelers use most, like Ctrip or Fliggy. The makeup of travelers is constantly evolving, so gaining access to these more niche channels, as well as the top global ones, will allow you to broaden your distribution strategy and attract new types of guests.” -SiteMinder director of product Gregor Vogel, in TravelDaily The best channel manager allows you to leverage your most productive channels, as well as experiment with less-obvious channels that might bring you untapped demand from hard-to-reach markets. And it doesn’t hurt to ask vendors for recommendations on which other channels you should consider -- the answer will show you how the company approaches customer service.   #3: Training, support, and implementation As with any new system, users will have questions and encounter issues that require troubleshooting, so training and constant support is a must. Depending on the size of your property, this could be a make-or-break item. You need to know what training is available, how much it costs, and if it's offered in the appropriate time zones and languages for your business. The same goes with ongoing support -- you should be able to get a response via chat, e-mail, or phone within a few hours at the most. There are five milestones on the path to implementing a channel manager. These include an introduction, group training, setup, private follow-up, and set live. Free trials typically last about 2-weeks where the hotelier can test out the full feature set and upon completion can immediately activate their subscription or choose not to invest at no further cost.   #4: Deep integrations with pricing rules A good channel manager should have the ability to integrate with all the hotel’s existing core systems, such as the PMS, RMS, and CRS. PMS: The property management system is the central hub for hotel management, so data from the channel manager must flow back and forth. RMS: To accurately and effectively manage revenue and profits, the revenue management system and channel manager need to share data. CRS: For seamless operations and a single unified view of property management, the channel manager must feed data to the central reservation system which then links with other systems.   An effective channel manager eliminates content inconsistencies by making it easy to update room inventory, availability, and rate plans through a simple interface. This interface should also facilitate cross-channel content updates, you can update your property’s photos, descriptions, room types, and related content all from one central location. No more endless manual updates, or forgetting to update content on a rarely-used channel. “The ability for distribution technology to seamlessly manage and sync content can save property’s time and, more importantly, drive reservations.” -Cloudbeds director of global partnerships Sebastien Leitner Hotels should also be able to set pricing- and availability-related rules to maximize profitability on each channel. These include: Direct pricing rules to maintain the direct channel’s Best Available Rates, setting stop-sells for rooms and packages when a specific channel has met its targets, setting the minimum number of days a booking can be made (to entice specific behaviors on certain channels), and offering discounted rates prior to a guests’ arrival. #5: Intuitive, easy-to-understand reporting Channel managers provide valuable data for revenue managers to adjust their distribution strategy dynamically. The right channel manager for your hotel is the one that gives you the insights you need to optimize your channel mix. It's not enough to just distribute inventory across channels; best-in-class channel managers invest heavily in advanced analytics and easy-to-understand reports that show occupancy, reservations, and revenue for specific periods of time. m. Armed with this information, revenue managers can make pricing decisions based on supply and demand. The reports will identify under- and over-performing channels for further investigation. For channels where the marketing cost per booking is low, it may be advantageous to address underperformance with price adjustments to encourage more bookings. For channels with high commissions or other customer acquisition costs, a spike in bookings may negatively affect a hotel’s Net RevPAR.   Choosing the best channel manager for your hotel Channel managers are valuable allies for revenue managers as they balance profitability-per-booking with gross room revenue targets. Distributing your inventory to the broadest base maintains visibility and increases your chances of bookings. The ability to selectively choose channels keeps you in control over the optimal channel mix and profitability at the booking level. When vetting vendors, use the criteria above and ask the following questions to determine the best channel manager for your property: How many channels are you connected to? Are you connected to the most important channels for my hotel? How many channels, room types per channel, and days can my hotel manage simultaneously? How far out can you manage availability? What reports will you provide me? Will you show me which channels deliver the most bookings and which provide the most revenue? Read relevant and recent reviews of the 10 top rated hotel channel managers.