Editor’s note: The following represents one in a quarterly series of columns about electronic distribution from the members of HEDNA, the Hotel Electronic Distribution Network Association.
Electronic distribution, the speed-of-light transmitting of information, ensures that a hotel has the ability to get its rate, inventory and property information into the hands of a customer who wants to buy. Gone are the days when the customer inquired directly to the hotel. Now the hotel needs to be sure it is effectively represented in the places the customer is shopping, and most of those places are online.
There’s an adage that, “If you’re not on the menu, no one knows about you.” Distribution is about “getting on the menu.” With all of the different menus that are available, electronic distribution allows hotels to be on multiple menus, reaching many customers with buying power.
Technology Ad Will Appear Here
Studies show a potential guest will go to eight to 12 websites looking for information and pricing on destinations and the products the guest is interested in buying. When a hotel is present on a majority of the websites searched, the propensity for the customer to purchase increases purely based on exposure. Exposure means sales.
Connectivity is the key
Connectivity is the key in today’s distribution landscape. Making sure a point of demand (website, travel agent, tour operator, receptive company, visitor bureau, etc.) can see your hotel, its availability and price happens through electronic connectivity options.
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Doug Carr
Executive director of distribution for Fairmont Raffles Hotels International
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These demand touch points generally have two ways of getting inventory and rates: One is looking within their own systems and infrastructure. This is the case with a traditional tour operator or many of the online travel agencies. The second is to query the hotel company’s system for availability and rate. This approach is the one taken by GDSs and the hotel’s own website, although some OTAs provide this as an option.
In the first approach, the responsibility lies with the hotel to ensure there is inventory and rate within the third-party system. In the second approach, it’s a matter of ensuring the rate and inventory exists within the platform the hotel is using to connect—generally this is a Central Reservation System either supported by a brand or a reservation services provider.
Streamlining the booking process
Once the inventory and rate is in the customer’s hand and a purchase decision is made, a booking gets created. Unless the point of distribution is the hotel’s own website, that booking will exist in a third-party system that needs to transmit the booking details to the hotel’s system. In the case of the hotel’s own website, the booking will generally be created by the hotel’s CRS platform.
There are a variety of ways a third-party booking message gets into the hotel’s system. Just as there are travel intermediaries (travel agents, tour operators, incentive houses, visitor bureaus, etc,), there are technology intermediaries as well. These are companies that provide connection solutions between the demand customer and the hotel. Usually, the booking message will be sent to one of these technology intermediaries who will then forward the message to the hotel’s platform, typically the CRS.
Once the CRS receives the booking message, a confirmation number response message is sent back using the same pathway. This gives the demand touch point the assurance that the message has been received and processed.
The transaction happens within seconds and generally without any human intervention. It’s a totally electronic process that truly streamlines the distribution of a hotel’s room inventory.
If any of the distribution process becomes manual, there are a variety of implications a hotelier needs to take into account. Some are obvious, like the “human error factor.” Some are not so obvious. These include:
- Revenue Management Systems—if a hotel has committed the funds to have a RMS but still has manual processes for third-party reservations, then the RMS might not be getting a true picture of the demand cycles. For example, if reservations need to be manually retrieved from different websites and then manually entered into the hotel system, the time lag of retrieving the reservations, having them “sit in an in-tray” somewhere (you just know it happens) and then being entered potentially days later results in the RMS having an unrealistic view of demand.
- Central reservation fees—some hotels think that by manually handling reservations they’re actually saving money. If a hotel has a RMS, then this “saving money” thinking means the money spent on the RMS was a waste. There’s no point in having a RMS establish the daily yieldable rates if the system does not have a true picture of demand. Spending money on a RMS, but saving money on reservation fees is not really a viable strategy.
Making sure you’re in front of your customer—that your product is on the shelf or on the menu—is what electronic distribution is all about. Once the customer has seen your hotel and has made a purchase decision, it is critical to have the booking message handled in the most timely and efficient manner. What’s more efficient than having that booking in your hotel system within a matter of seconds? That’s a strategy that will produce viable results for your hotel and your balance sheet.
Doug Carr is Executive Director of Distribution for Fairmont Raffles Hotels International and a member of HEDNA’s Board of Directors. Doug is very involved with the Association’s HEDNA U, a one-day seminar to help educate hotel personnel about electronic distribution topics including content. Upcoming HEDNA U sessions will be held in Toronto and Las Vegas. For more information on HEDNA U, visit the HEDNA website or email HEDNA at info@hedna.org.
The opinions expressed in this column do not necessarily reflect the opinions of HotelNewsNow.com or its parent company, Smith Travel Research and its affiliated companies. Columnists published on this site are given the freedom to express views that may be controversial, but our goal is to provoke thought and constructive discussion within our reader community. Please feel free to comment or contact an editor with any questions or concerns.
