How open booking impacts the hotel industry
 
How open booking impacts the hotel industry
17 OCTOBER 2014 6:34 AM
Technology will continue to advance to better track off-channel bookings for hotels, and the industry will be able to leverage the information generated to work better with corporate clients.
Open booking is a corporate policy that allows managed business travelers to book travel outside the preferred booking channel while using technology to remit those transactions back to the travel management company. The ability of managed business travelers to book travel outside their travel management company has implications for all players in the managed business travel space: the business traveler, the travelers’ employer, the travel management company and hotel suppliers. 
 
This article will focus solely on the implications of open booking on the hotel industry. 
 
Hotels lead in open booking
Hotels, in particular, are at the forefront of the open booking trend because many managed business travelers book outside the preferred channel for hotels. 
 
According to research conducted by Carlson Wagonlit Travel, 40% of hotel bookings in North America are made outside the preferred booking channels for managed business travelers. An example of this is when a managed business traveler books directly with a hotel to obtain a discounted rate offered by a conference.
 
Previously, these bookings weren’t incorporated into the travel management programs so it was difficult for the travel management companies to track travelers and offer customer service. However, technology has advanced so these bookings can be incorporated into the travel management companies. While it is unlikely that the number of off-channel bookings (those bookings made outside the preferred channels) will grow, more companies are showing interest in tracking these bookings better and others are going to fully embrace open booking as a travel policy. 
 
The evolution of open booking will bring greater transparency to the hotel market when it comes to business travelers.
 
The players
There are two players in the open booking space: Concur and Sabre Holdings.
 
Concur kicked off the race to capture off-channel bookings with its 2011 acquisition of TripIt, which has become part of the company’s TripLink product. One of the features of TripLink is that business travelers can link their Concur profiles with their profiles at hotel companies so when the business traveler makes a reservation the booking is forwarded to the travel management company to view and provide duty of care. So far, Marriott International, Starwood Hotels & Resorts Worldwide and InterContinental Hotels Group have integrated with TripLink.
 
Sabre Holdings, the global distribution system, is another player looking to capture off-channel bookings. It launched TruTrip in 2013. Because Sabre is a global distribution system, it does not need to sign individual hotel suppliers to its program and data integration is easier. 
 
A few drawbacks in managing off-channel bookings
One of the drawbacks in off-channel bookings is that the travel management company can only view the reservation; it cannot change it. As a result, the traveler must work directly with the hotel to modify or cancel the reservation, which could increase the hotel’s need for customer service.
 
The other disadvantage is that Airbnb now is a Concur TripLink partner, which makes it easier for managed business travelers with TripLink profiles to book with it. As a result, hoteliers face a greater competitive threat from peer-to-peer accommodation if the traveler’s employer subscribes to Concur’s TripLink. 
 
The future is data
It is still early days in the field of managing off-channel hotel bookings, but regardless of the method of managing those bookings, the data generated by those bookings is important to the hotel industry. With the bookings linked to managed business traveler profiles, hotel companies will have a more detailed picture of a corporation’s travel spend with them, which can be analyzed for marketing purposes and corporate negotiations. 
 
Because open booking is still in its early stages, the full potential of the data, particularly existing datasets, has yet to be realized, but the data will likely evolve to include more detail to unlock greater value. 
 
Overall, the technology will continue to advance to better track these off-channel bookings for hotels. Despite some drawbacks, the hotel industry will be able to leverage the information generated to work better with corporate clients. 
 
Michelle Grant is the travel and tourism research manager at Euromonitor International, specializing in hotels research. In her role, Michelle is responsible for Euromonitor’s hotel industry research, which provides analysis and in-depth coverage of the hotel market in 211 countries worldwide. She works closely with hotel companies, providing insight into consumer trends and market performance to help clients make informed, strategic business decisions. Michelle is a respected source in the travel and tourism industry. She has presented at a variety of high-level conferences, such as the World Travel Market, La Cumbre and the Special Libraries Association and is often quoted in journals, national newspapers and trade publications. Previously, she was a research analyst for Latin America, covering industries such as financial cards and domestic electrical appliances. Michelle has a Bachelor of Arts in Economics and Finance from Washington University in St. Louis.
 
The opinions expressed in this column do not necessarily reflect the opinions of Hotel News Now or its parent company, STR 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.  
 

No Comments

Comments that include blatant advertisements or links to products or company websites will be removed to avoid instances of spam. Also, comments that include profanity, lewdness, personal attacks, solicitations or advertising, or other similarly inappropriate or offensive comments or material will be removed from the site. You are fully responsible for the content you post. The opinions expressed in comments do not necessarily reflect the opinions of Hotel News Now or its parent company, STR and its affiliated companies. Please report any violations to our editorial staff.