Hoteliers critique 3 new booking platforms
12 AUGUST 2015 6:36 AM
A panel of experts highlighted the good, the bad and the ugly in three up-and-coming players in the distribution space.
WASHINGTON, D.C.—There’s no shortage of innovation in the distribution space, with new platforms and providers popping up every day.
But while a bevy of options creates competition that can be good for the hotel industry, it also can create headaches as hoteliers are left to vet them one by one—unless there’s a panel of experts to do the work for them.
To that end (and back by popular demand) at the Revenue Strategy Summit in July was the “New players, new models” session, in which four hoteliers critiqued pitches from three up-and-coming platforms.
Joe Mele, head of BookingSuite’s strategic accounts, described the division of online travel agency Booking.com as a “(software-as-a-service) website platform where hotels can build effective, beautiful and inexpensive responsive websites.” There are no upfront costs, and the subscription-based model ensures hoteliers receive timely updates to their websites built by a team of developers, as opposed to bespoke code which can be cumbersome and clunky, he added.
The first question that came to Alfred Young’s mind was who owns the data.
“(BookingSuite) is owned by a particular booking channel that would love that data. … How does it remain within our particular asset and does not become the asset of someone else’s? The value is driven off of that data. It’s not something we’re looking to trade at this stage in the game,” said the COO and executive VP of LaSalle Hotel Properties.
(Mele would later respond that BookingSuite operates as a standalone division within Booking.com. “We’re very sensitive about making sure the data that properties trust us with does not get shared within Booking.com. That’s very important. It’s a credibility issue with us.”)
For Michelle Russo, CEO and founder of Hotel Asset Value Enhancement, the bigger issue was differentiation. There are a lot of companies that design hotel websites, and it wasn’t clear to her what makes BookingSuite stand out.
Agnelo Fernandes, senior VP of sales and marketing for Terranea Resort, saw some benefits for smaller properties that lack the resources to create and manage their own websites in-house.
“The small independents that don’t have those resources to make those things happen, this model would fit them a lot better,” he said.
Stayful is a booking platform that allows travelers to negotiate nonrefundable rates one-on-one with hoteliers in unique boutique and independent hotels, explained Roberta Seiler, VP of sales and marketing. The goal is to help those hoteliers unload the inventory that sits unused every day, she added—and at a lower cost to owners. Stayful charges a 10% commission.
The panel’s critique focused on two key points.
First, there is the issue of giving guests the power to name their own rates. While hoteliers can accept or reject each offer, the panel agreed they’re all working tirelessly to regain that control—not lose it again.
“Why are we giving consumers a price different than our best available rate?” Russo asked. “That makes me nervous. There’s got to be a better way to position that.”
“And the fact that you don’t have to buy it if you bid it is bothersome,” she added.
The second point dealt with sheer manpower. The distribution landscape is already complex enough. Do hoteliers really want their revenue managers engaged in one-on-one negotiations with guests for individual hotel rooms that may or may not get booked?
Kathleen Mallery, senior director of revenue optimization, the Americas, for Carlson Rezidor Hotel Group, described the complexity inherent in that landscape by way of example: The chain is master franchisor for a high-end brand that has 14 hotels in London, which combined will be on more than 100 different distribution channels by year’s end.
“We’ve been trying to simplify it for the hotels as well. … It’s too hard for hotels to manage hundreds of sites on property,” Mallery said.
Nathan Stevenson, co-founder and COO of HotelsByDay, described the booking platform as “the sharing economy for hotels.” The site allows hoteliers to sell their perishable inventory for hours-long blocks in the morning, mid-day and afternoon, allowing guests to crash somewhere after a red-eye flight, recharge mid-day or have an afternoon base of operations before a big meeting, for instance. The commission structure is half of the typical online travel agency at around 7.5%, Stevenson said. And best yet? Hoteliers are still able to sell those rooms for the traditional overnight stay.
“This is disruption at its best,” Fernandes said.
The biggest hurdle, he said, is the overhead associated with room turnover for housekeepers. That could create havoc with scheduling, making sure the right rooms are available at the right times.
Further complicating matters is the wave of online and mobile check-in functionality that allows guests to choose their rooms, the panel agreed. How can they do that if their chosen room might be sold for a few hours before arrival? Sometimes guests don’t vacate when they should, Mallery added.
But assuming those operational issues got worked out, did the panel think this approach would have a fit in their hotels?
“I do,” Russo said. However, she questioned the unique nature of HotelsByDay. “Where are our operators and brand partners? Why do we have to have another group innovate to bring this to light?”
“I think it’s worth looking into,” LaSalle’s Young said. “It’s unique.”