Online distribution: Technologise or get left behind

  Posted in Online Distribution

By Kevin Tatem, Director of Sales – Asia, SiteMinder

In a modern world of increasing speed and complexity, I find myself pondering why so many hoteliers refuse to embrace the best technologies available and continue to live in the technological ‘dark ages’, as it were.

If a hotelier were a deliveryman in the 1920s and their closest competitor had a ‘newfangled’ automobile whilst they had a horse-and-cart, would they not consider buying some mechanised transport, themselves, or would they risk going out of business?

And yet, as some hoteliers globally embrace channel management tools for their online distribution – and integrate them with their property management systems – many choose to not embrace this technology at all and continue to undertake the arduous, manual task of updating rates and inventory.

The facts to combat common myths

With the ongoing fragmentation in online hotel distribution, there will always be a need to invest in maturing technology that evolves with the needs of the industry.

I’ve found that, globally, price sensitivity among hoteliers and a lack of understanding around new developments – or even an unwillingness to understand – can cripple a technology provider’s ability to innovate in the distribution space. If you build it, will they come? Many cases tell me, perhaps not.

Here are four of the most common myths I’ve heard about online distribution technology and an explanation as to why they’re exactly that – myths, and not facts:

Myth: Cheap labour means no requirement to invest in technology

Fact: People cannot operate at the same level as technology, day and night. Whatever the distribution technology, it will work tirelessly for you in the background – always.

Myth: Humans are more efficient

Fact: Humans simply cannot process all of the actions required to sell inventory online, 24/7, more efficiently than an online distribution platform.  With sales coming in via multiple channels such as Online Travel Agents (OTAs), meta search engines and direct bookings on a hotel’s own website, it can become extremely time-consuming for a human to maintain accurate inventory across all these channels without any errors, thus increasing their risk of overbooking.

An example of this is Tauzia Hotel Management. Tauzia’s main problem was manually maintaining accurate inventory across all of their channels. When they adopted a new technology solution that automated this process, they increased their online booking revenue by 150%.

Myth: There is insufficient value in such technology

Fact: Any type of technology you bring into your business will cost money. However, as the new technology is utilised:

  • A hotel’s operational costs reduce as the hours required to manually update their channels and maintain their rate parity are eliminated
  • A hotel’s profit margin increases as the hotel can now sell rooms across more online channels, 24/7.

This was the case for Sea World Resort which experienced a 50% reduction in operating costs and a 36% increase in online revenue since implementing their new solution.

Myth: People will lose their jobs

Fact: This will be dependent upon each individual hotel. However, I’ve found that retained staff are able to work more efficiently and are utilised in other ways, for example, dedicating more time to the higher value tasks such as providing better customer service, and working on the hotel’s sales and marketing strategies.

The constant evolution of technology within the hospitality industry is designed to enhance the customer experience and allow hotels to operate more efficiently. Let’s embrace this evolution and start applying it to channel managers.

Technologise or get left behind.

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