We know that hotels choose to manage their OTAs or Online Travel Agents through an extranet, which might be linked to a preferred channel management software. A quota of the entire inventory is allotted through this interface, so the hotel’s rooms can be put up on the OTA (during off season and season periods) for proper distribution.
When occupancy is high, the hotel blocks all its rooms for itself. Contrastingly, during off season, they keep the option open and a huge percentage of the inventory gets allotted to the OTAs. As a result, OTAs keep increasing their market share in the online distribution landscape.
“The fact is that these days, listing on an OTA takes hardly a week’s time. Also, hotels are smart. They sign up with OTAs well in advance and go live for selling, way before the hotel opens. The main challenge is updating the details of a hotel on the extranet”, says Sumit Gupta, Group Revenue Manager – India & Africa at Sarovar Hotels & Resorts.
In 2015, hotels across the globe followed a trend wherein they tried to decrease their participation on too many OTAs and instead focused on a few big players. This trend will continue through 2017 and beyond.
However, some renowned players have started rolling out aggressive strategies in the field of commission negotiations. So, the whole idea of managing OTA channels and saving on commission percentages has given rise to numerous new job titles and technologies.
The Hotel Distribution Manager establishes the foundation of this technological wave, for it is an extension of the traditional revenue manager and channel management or rate management tools.
- A distribution system facilitates the opening and closing of inventory, restrictions and rates on each channel from a unified dashboard.
- Connectivity is established through an extranet or a VPN for independent hotels. The hotel staff can log into this tool and manage distribution on all the linked OTAs.
- Some companies offer more specialized channel management solutions. These systems interface with the PMS/CRS at one end, and with the OTA at the other end.
Hospitality industry pundits claim that hotels typically use a cocktail of software solutions to manage their inventory as well as correctly update details on the extranet. According to Phocuswright, in the European Independent Lodging Landscape alone, the following stats hold true.
50% of independent properties have an Internet Booking engine.
31% have a property management system.
30% of hotels have a central reservation system
39% have a channel manager.
Let’s delve a little deep into the details of the three most popular software solutions which are used to manage real-time room inventories across OTAs and the hotel’s extranet.
Property management System:
It is better known and abbreviated as a ‘PMS’ and is the main software solution that can help to run a hotel. Branches of a PMS deal with room inventory, check-ins, check-outs, F&B outlets, billing etc.
Big chain hotels these days use integrated software tools that have the entire inventory built within the PMS. They handle both online and offline bookings and here, the inventory is always live.
Hotels do not keep their rooms available for OTAs as they want maximum revenue and also want to sell rooms through profitable channels.
Hotels today are resorting to a channel management solution for the distribution of room rates and availability on OTAs, exclusively for revenue maximization. For the records, distribution technology is challenging as it caters to hotels of all sizes, OTAs, booking engines, wholesalers, tour operators etc.
A distribution system can ideally do the following:
- It works with channels that bring maximum value (through booking volume and revenue).
- It tracks commissions and balances cost against short term and long term value of acquiring customers.
- It actively manages a hotel and OTA’s relationship via a market manager through collaboration.
- It builds more business from a wide range of source markets.
OTA Extranet: It is an OTAs easy-to-use booking management system.
Why should you log-in to one?
- When a guest doesn’t show up after booking or when a guest cancels a booking directly, this data needs to be fed into the OTA extranet. It will prevent your hotel from getting charged commission (especially on Booking.com and Expedia).
- It has the information about all the guests e.g. contact details and credit card details.
- It allows you to manually ‘stop’ sell dates through an OTA extranet. This will avoid overbooking during high-demand or on-season periods.
With these systems in place, hotels are able to integrate critical operations, from a single platform. The staff stays up-to-date and real-time information is accessible in a click, thereby allowing hoteliers to exercise complete control over their property(s).