This article originally appeared in HOTEL Yearbook Technology 2020 and has been recently updated. Click here to access all the articles in the publication.
We’re seeing a dramatic shift in the hotel distribution landscape right now. For the last decade, there’s been a boom in the number of new hospitality technology providers entering the market. These companies introduced fresh ideas and products into a tech landscape that had long been stagnant. We’ve now reached a point of maturity, and the industry is moving toward a “platformization model.”
Through mergers and other strategic consolidations (including the recent one between Travel Tripper and Pegasus), solution providers are upgrading their technology, expanding their product suite, and offering hotels interconnected solutions rather than individual niche products. Tech companies are finding that the most efficient way to help hotels conquer problems inherent in the legacy “tech stack” is providing a single source for connection and interconnection, rather than points of entry provided via disparate solutions.
Hotels have often been slow to adopt new technologies, so this exciting shift will benefit the industry. But in the race to create the overarching platform, many big companies use their size and strength to shackle hotels to outdated solutions (such as charging exorbitant integration fees), rather than bringing new ideas and products to market.
This must change.
Traditionally, CRS solutions were evaluated primarily based on their ability to connect with a variety of third-party distributors, starting with GDS and travel management companies, and later OTAs and metasearch channels. Direct channel applications, such as the booking engine, have long been neglected.
With third-party distributors taking heavier commissions each year, hotels have realized the importance of strong direct channel business as part of a profitable revenue strategy. However, most CRS providers haven’t kept up with the times, leaving hotels with a lack of tools that would help maximize direct bookings.
The role of CRS in direct channel e-commerce
For many CRS companies, the “direct distribution” application is the booking engine. Period. Rate plans and availability from the CRS are distributed to the booking engine in the same way they’re sent to third-party distributors.
The problem is, the booking engine isn’t where guests start their booking journey—it’s where it ends. This is where hotels miss opportunities to use the CRS to optimize for direct bookings. This has been the question that has driven our development process for years: How can we use the CRS to help hotels ‘be direct’?
Most hotels invest separately in a website and simply link the website to the booking engine. The platforms serve separate functions: the website sells the features of the hotel, while the booking engine sells prices and offers. But the guest only sees it as one website, and they want features and pricing upfront. So pricing should be immediately available on the website, without having to enter dates into the booking engine.
To prove their website has the best price, many hotels use third-party price-checking tools to compare their rates against the OTAs. But when this technology is embedded within the CRS, not only can the platform check if it has the best price, it can beat the best price by creating a bookable rate match offer, essentially automating a hotel’s standard best rate guarantee.
In addition, real-time data no longer has to be confined to websites and booking engines. This data can now be used to power digital marketing tools like Real-Time Ads for Google search, Facebook Dynamic Ads for Travel and metasearch direct connects, allowing hotels to reach guests more effectively throughout their booking journey. Pegasus customers using dynamic ads powered by real-time CRS data have seen significant increases in ad campaign conversions, lowered cost of acquisition, and better return on ad spend.
By rethinking the role of CRS in direct distribution, the industry can re-open the conversation on innovation in hotel e-commerce and marketing, including the development of effective platforms and tools.
Using the CRS to break down data silos
E-commerce isn’t the only place where the CRS can innovate. In enterprise applications, the CRS can and should serve as a foundational platform for combining traditional data silos and integrating them to create a 360-view of the customer. During a recent project for a leading casino hotel, we built a call center application on top of our CRS that integrated their PMS, revenue management system, loyalty program, and CRM into one dashboard view.
Previously, the call center agents had to cross-check multiple applications and dashboards to access the right rate plans for their call-in guests. But now, they can do it all from one streamlined view, collectively saving the center thousands of hours in call time each year and delivering an enhanced guest experience.
As hotels increasingly adopt new technologies to power different parts of the business, one of today’s biggest challenges is to bring these data silos together. The tech providers that lead the way will be those that promote open access to APIs and provide the flexibility to integrate different solutions, or build entirely new applications. With the CRS serving as the core of every hotel’s revenue and distribution strategy, there’s plenty of potential in this space to build the platform of the future. We are glad to be part of the conversation to lead the industry forward!
Looking for a new central reservation system? Download our 2021 CRS Buyer’s Guide for the latest in connectivity and distribution trends, buyer advice and recommendations, as well as a brand-new RFP template and vendor scorecard. Produced in conjunction with Hotel Tech Report.
The Hotel Yearbook is a family of publications that call upon a wide-ranging group of senior executives, analysts, consultants and opinion leaders from all over the world to ask, “What lies ahead for the global hotel industry?”
In The Hotel Yearbook – whether it is the highly respected annual edition or any of the special editions focusing on such critically important themes as technology, talent development, or the digital world – forward-looking contributors share with readers the key trends and developments that they believe could have an impact on the performance of the hotel industry in the future.
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