Acting like a ‘middle man’ for third party systems – hotel PMSes and CRSes at one end and OTAs at the other end, channel management application offers a large number of connects. But evaluating whether they are connected to top performing channels is a must By Kahini Chakraborty
Ever since standalone online channel managers came into the scene globally, one part of the problem did get solved for hotels, that of not having to update separate OTA extranets manually. But did it give hoteliers the confidence of exposing maximum possible rooms to all OTAs? “Clearly no!” exclaims Tarun Gulati, co-founder, Djubo.com, stating, “Hotels till date are exposing only three-five rooms per OTA on an average for any single day for all future dates even if they have a 50 room property. This is because even updating the channel manager is a separate manual process. Their actual booking chart which controls their queries, holds and bookings is not speaking to their channel manager automatically. So revenue managers are reducing their headache by exposing lesser rooms that they should, thereby ultimately impacting the hotel’s revenue.”
For example, Gulati highlights, “If you had 30 rooms available on a certain date and if you are exposing six each to 10 OTAs for sale, it’s not like you are exposing 60 rooms for sale. You are actually exposing only six rooms out of 30 for sale because searches happen on individual OTAs at a time. You should ideally expose all 30 on all OTAs. But revenue managers shy away from doing that because keeping the actual booking chart in sync with an OTA is very difficult manually and almost impossible. At best a good revenue manager will try and keep the next couple of weeks in sync but a hotel is not fighting the battle over the next few days. At any given date the hotel is fighting a war across all dates in the future against all its competitors. So lets say for a specific date the hotel sold three rooms out of the six exposed on every OTA through a channel manager and if the revenue manager is not updating its own channel manager frequently, then even if a small family is looking for four rooms on any specific OTA, this particular hotel will not become visible. Now that is a major loss for the hotel as it not only had four rooms to sell but potentially a much larger number to sell which wasn’t exposed to the OTAs.”
Mike Kistner, chief executive officer, RezNext Global Solutions points out that when selecting a channel management software, the key is to understand the quality of the channels the software is connected to. While many channel managers may offer a large number of connects, evaluating whether they are connected to the top performing channels is a must. The technology must also offer a real-time connectivity into the channels. A cloud based application can help keep the investment in infrastructure nimble while improving scalability and reliability. A distribution platform hosted in the cloud can quickly scale to meet the growing channel connects and increase data transfer. ReX from RezNext is a cloud based solution and intelligent distribution platform developed using the latest in .net technology with MVC framework.”
Technologically advanced
A channel manager ideally can be developed using any of the contemporary technologies like Web Services/ APIs using SOAP/XML or Jason for data transfer and communication between channels. But Gulati says, “The challenge here is to make different systems using disparate technology platforms, (as in the case of OTAs) talk to each other in the most efficient and robust manner. Another technological challenge that arises is that of ‘no standards’ existing in the eco-system, which also ends up demanding a lot in terms of the application architecture and design of the system integrating these disparate channels. Given these constraints, the best approach is to use JSON data objects for communication which makes the underlining communication extremely light and fast. In addition, using robust and stable frameworks for queuing, caching, error and exception handling and reporting are critical to building a sound channel management software with minimal production issues.”
Djubo, which is an invisible online channel manager integrated seamlessly with a cloud based CRS (centralised reservations system) represents the latest in terms of technology to help hotels maximise revenues. So while at Djubo, they use REST API framework of Django to integrate with third party systems, and are connected to all OTAs through APIs (application programming interfaces); RezNext uses an API integration to connect with its partners.
When asked about the number of rooms that can be managed, Gulati mentions that there is no limit of the number of rooms or number of categories that can be managed. “With ReX, multiple room types and rate codes can be managed for each channel thus giving hotels the ability to manage B2C and B2B rates and connects on one screen,” highlights Kistner. And on what basis does the channel management provider select channels to build connections?. “Channels are selected based on the most popular OTA for each geography. For example, one cannot ignore integrating with a MakeMyTrip in India, and the similar case is with Expedia in the US. Whichever OTA is important for each geography has to be approached and integrated. If integration with relevant OTAs for each geography is not done then the industry problem will not be able to be solved completely,” says Gulati.
Another benefit of exposing more rooms to OTAs, which properties not managing their OTA presence well will never avail, is the Billboard Effect. “Research shows that good OTA ranking and presence cannot only give your hotel higher OTA revenue, it also leads to as much as 26 per cent higher direct revenue. All of that is lost if you don’t rank high enough on all or some OTAs. So by underexposing you are not only not maximising your OTA revenue, you are also losing out on a lot of possible direct revenue,” informs Gulati.
The only way to turn this downward spiral into a positive spiral is to expose more rooms to sell more rooms. But revenue managers can only achieve this if their actual booking chart is also managed on the cloud and speaks seamless to all OTAs and automatically updates its inventory on all OTAs without any manual intervention. This is the approach of Djubo – the 360 Hotel Sales Platform. Apart from just this, comes equipped with various sales desk related features like automated voucher generated, agent/ guest/ front office coordination, system generated alerts for payment follow up and much more.
Revenue benefits
Djubo has four types of profiles, each with specific rights and features, chain level admin or property level admin or a reservations manager or a front office manager. Resources in a hotel distribution environment have different roles to perform. ReX provides a role based approach which helps hotels empower their resources with the right information and tools required to effectively collaborate and execute.
With ReX, hotels get connected to high yielding demand generators, real-time automating the entire reservation process. All bookings, modifications and cancellations flow real-time back into the hotel PMS. Hotels can optimise their inventory and the revenue opportunity by getting their last minute room availability also displayed across channels for booking. This allows hotels to do away with manual processes, streamline operations and open up their reservations 24/7.
“Our product, if used and managed well can even deliver upto 30-40 per cent higher revenues for a hotel. It does vary on a case to case basis and prior run rates of the hotels and also their inventory levels. Some results come quickly and some take time to set in but the advantages are easy to see and best experienced first hand,” mentions Gulati.