Report Overview

Hotel distribution is a complex process. In a market where demand fluctuates strongly, and a myriad network of channels compete for sales of the same room inventory, hotels need to understand how the different channels operate and have a clear strategy in place to allow for the best possible distribution of their rooms.

Skift Research has put together two reports to tackle this crucial element in hotel operations. This second report focuses on the technology that is available to hoteliers to enhance distribution. The report sets out the different tech systems and provides an insight into the vendor landscape.

The report highlights how distribution tech can be split into two categories: connectivity tech, which helps with the distribution of rooms, and intelligence tech, which helps hoteliers better understand market demand and competitor behavior. The report discusses key issues faced by hoteliers, and the future of tech development.

What You'll Learn From This Report

  • The history of technology in hotel distribution, and what technology is used today by hotels
  • The tech vendors that are active in this space, and what solutions they offer
  • How the role of channel managers is evolving
  • How hoteliers struggle to get a clear overview of demand, and how tech has evolved (and will continue to evolve) to tackle this problem
  • How hotel distribution is becoming a more holistic topic which involves looking at the entire guest journey

Executives Interviewed

  • Enzo Aita - Global Head of Business Development at Hyperguest
  • Paul Anthony - Digital Commercialisation Director at Hotelbeds
  • Katja Bohnet - Director of Hotel Distribution at Amadeus
  • Tom Buckley - Co-founder and Chief Commercial Officer at Wildebeest
  • Tom Corcoran - President and CEO at TCOR Hotel Partners
  • Evan Davies - Founder at Channex.io
  • Cindy Estis Green - Co-founder and CEO at Kalibri Labs
  • Mark Fancourt - Co-founder at TravHoTech
  • Mike Ford - Managing Director at SiteMinder
  • Quinten Gazendam - Chief Growth Officer at SmartHotel
  • Narcis Ghidanac – Revenue Manager at Me by Melia Dubai
  • Pierre-Charles Grob - CEO at D-Edge
  • Hamzah Hafesji​ - Senior Product Manager at Guestline
  • Craig Hewett - Co-founder at Wego.com
  • Christoph Hütter - Revenue Strategy Consultant at Christoph Hütter Revenue Management
  • Shawn Jereb - Vice President of Revenue Management at Montage Hotels
  • Chris Jones - Product Manager at Guestline
  • Ullrich Kastner - Managing Director and Founder at MyHotelShop
  • Steve Lowy - Founder and CEO at The Residence Apartments
  • Bela Nagy - Senior Vice President Revenue Strategy and Performance at Accor
  • Michaela Papenhoff - Managing Director at h2c
  • Simone Puorto – Founder and CEO at Travel Singularity
  • Amit Rahav - Co-founder and Chief Revenue Officer at Hyperguest
  • Alexandra Fernandez Ramos - Chief Product and Sales Officer at Travelsify
  • Murtaza Rangwala - Principal Consultant and Owner at RevUplift
  • Karin van Rhee - COO at Juyo Analytics
  • Sally Richards - Managing Director at RaspberrySky Services
  • Joan Sanz - Founder at ChartOK
  • Chinmai Sharma - President, Americas at RateGain
  • Mark Struik - Commercial Director at Postilion Hotels
  • Johnny Thorsen - Vice President Strategy & Innovation at American Express Digital Labs
  • Monica Xuereb - Chief Revenue Officer at Loews Hotels
  • Xabier Zabala - Global Operations Director at Hotelbeds
  • We’d also like to thank Michael Frenkel and Klaus Kohlmayr of IDeaS for their insights and industry introductions. Furthermore, we appreciate the teams at SimilarWeb, OTA Insight, Kalibri Labs, MyHotelShop, STR, and D-Edge sharing their data for this report.

Executive Summary

The real first technological innovation in hotel distribution came after the birth of the GDSs. Initially focused on airline reservation management, hotels copied the idea of a central reservation system in the 1970s. Tech penetration sped up considerably after the launch of the first online travel agents in the late 1990s. Channel managers followed a few years later, and today the tech landscape for hotel distribution is vast.

In this report we split hotel distribution technology into two categories: ‘connectivity tech’ and ‘intelligence tech’. Connectivity tech enables hotels to get their rooms on the right platforms, with correct rates, and the right availability. Connectivity tech starts at the property management system, and also includes central reservation systems, booking engines, and channel managers.

Intelligence tech is technology that is not vital for the distribution of rooms, but is increasingly used by hoteliers as a way of ensuring that they offer the best rates, know where the demand is and what that demand looks like, and understand what the competition is doing. This includes revenue management systems, customer relationship management, market intelligence, business intelligence, and rate parity tools.

There is a vast network of different vendors, all offering some of the above mentioned solutions. While each player tends to be known for one particular feature, we have seen an increase in ‘solution-blurring’, where tech vendors are increasing the breadth of tools they offer to hoteliers.

Distribution tech helps solve a number of key issues that are discussed in this report.

The first issue is to get hotel rooms onto the right channels, and channel managers are without doubt the most important tech player to do this. Channel managers are becoming more than just the pipework, instead increasingly providing market and business insights to help hoteliers make better decisions.

There is a growing demand for this type of insight, from channel managers but also from other vendors, and this relates to the second issue identified in this report, namely to understand where demand is. It is important for hotels to know where to offer their rooms, but demand is volatile, and so hoteliers need technology to understand the market. The problem is that there is a large network of tech vendors that all provide some pieces of the puzzle, but as of yet no single vendor can provide a complete picture. Tech vendors are certainly working hard to try and be the first to offer this.

The final issue that hoteliers need to consider is that hotel distribution is not simply about understanding demand and placing rooms in the right channels. Instead, hotel distribution makes up only part of the guest journey, while at the same time being impacted heavily by other parts of this guest journey. The guest journey today is centered around mobile devices, which offers more and different ways to distribute rooms and engage guests. With the current pandemic, contactless tech is increasingly prevalent in hotels, offering further ways of connecting different aspects of the hotel stay to better understand the guest, and ultimately improve distribution strategies.

Tech-enabled hotel distribution

Technology has played a part in hotel distribution since the 1970s, when hotels copied the central reservation systems as invented by airlines, to better manage their room inventory and connect to the global distribution systems (GDS).

But truly, hotel distribution remained largely devoid of considerable tech penetration up to the turn of the century, when online booking platforms started to flex their muscle and hotels launched their own websites with booking engines, to allow customers to book their rooms online.

Since then, hotel distribution has become far more complex, and technology has penetrated every layer of distribution. We have put together two reports to tackle this crucial element in hotel operations.

The first report, Hotel Distribution 2020 Part I: The Channel Mix discusses the different channels that hotels distribute their rooms on. This second report focuses on the technology landscape and tech vendors that enable hotel distribution.

This two-part series provides a consensus view of the key issues and main opportunities for hoteliers, tech vendors, and distribution platforms. To understand which issues have shaped the distribution landscape, and how this might change moving forward, we have interviewed a host of industry experts to share their views. Our expert pool encompasses all parties that share an interest in the future of hotel distribution, largely falling within the following three categories:

  • Hoteliers and consultants to the hotel industry. They provided insights around their channel mix, their methods of distributing, their struggles and frustrations, and they evaluated the technology they use.
  • Channel representatives. Different players that make up the channel mix, including online travel agents (OTAs), bed banks, consortia, travel agencies, and metasearch providers shared their vision, and responded to criticism lodged by hoteliers.
  • Tech vendors. Technology providers gave their insights into the tools they are producing to help hoteliers distribute their rooms more efficiently.

How technology entered hotel distribution

Up to the late 1990s, hotel distribution consisted predominantly of people calling or walking into the hotel they wanted to stay in. For the vast majority of hotels, this ‘property direct’ channel represented between half and three quarters of their sales. Call centers, especially for branded properties, were also of significant importance. The remainder would be booked through tour operators, consortia, and global distribution platforms (GDSs).

The real first technological innovation came with the birth of the GDSs. The first iterations of what we now refer to as GDSs were launched in the airline industry. Flight demand surged after the end of World War II. To improve real time ticketing and flight management, American Airlines and IBM built a specification called Passenger Name Record (PNR), with American Airlines launching one of the first central reservation systems named SABRE (Semi-Automated Business and Research Environment) in 1959.

In the beginning, each airline developed its own internal central reservation system (CRS), and started rolling its system out to a wide network of travel agents. As travel agents tended to use just one system, airlines paid booking fees to competitors to be able to participate in each others’ reservation systems. When competition and antitrust fears moved the U.S. Department of Transportation to implement consumer protection regulations, many airlines started spinning off their central reservation systems in the 1990s as they became a less lucrative business proposition.

Meanwhile, in the early 1970s, hotels started launching their own electronic reservation systems, and in 1988 a group of hoteliers founded THISCO, which later became Pegasus, to create a link between the hotel CRS and airline GDS systems. According to Cindy Estis Green, co-founder and CEO of Kalibri Labs, however, GDS bookings never became much more than 10% of total hotel bookings, and this still largely holds true today.

After the spinoff of GDSs from the airlines, GDS vendors have certainly increased their focus on the hotel industry though, as margins are much greater than in the air ticketing space. Amadeus acquired hotel technology company Optims in 2004, and doubled down in July 2015 with the acquisition of property management system Itesso, and CRS and guest management software vendor Travelclick in 2018. Sabre, meanwhile, acquired SynXis, a hotel CRS, in 2005.

To improve connectivity to hotel inventory for travel agents, First Choice Travel (later merged into TUI) launched Hotelbeds in 2001. Around the same time, companies like HBSi (now IBS Software) and Derbysoft started providing direct connections between tour operators and hotel chains. Today we see a new wave of technology coming to this space, with startups like Hyperguest focusing on providing a direct connection between travel agents and hotels.

A few years before the launch of Hotelbeds, in 1996, Microsoft founded Expedia, and the Dutch startup bookings.nl was launched. These two brands, with bookings.nl changing its name to Booking.com in 2000, became the main pillars of the OTA space.

The online travel agents received a boost in 2001 during the aftermath of 9/11, when demand was low and hotels were happy to release much of their inventory to these online channels. With more and more travelers booking online, the OTA share continued to increase, and Skift Research analysis has shown that the same happened during the 2008/09 economic crisis.

As the online booking space grew, a whole host of OTAs were launched. The largest have since been consolidated under the Booking Holdings and Expedia Group umbrellas, but there continues to be a vast network of online booking sites. Channel managers were launched to help hotels distribute to these different online channels.

RateTiger, by eRevMax, was one of the first channel managers on the market in 2002. Serious competition, which drove prices down and made channel managers more affordable to most hotels, came with the launch of SiteMinder in 2006. Today, there are many channel managers, most of which have branched out far beyond just offering pure channel management.

Today’s distribution tech landscape

What we have ended up with is an extremely complex hotel distribution landscape, with many players accessing and selling hotel room inventory through a myriad of channels, and a web of distribution technology vendors that play in many different spaces.

Katja Bohnet, director of hotel distribution at Amadeus summarized the difficulty faced by hoteliers in today’s distribution landscape into two points: “the biggest problem is the lack of visibility in order to optimize the channel performance. And secondly, data technology infrastructure and big fragmentation in technology has meant that the hotelier needs many different systems to reach a customer and to fill their rooms.”

Below is a simplified map of the technology used to distribute rooms today.

Exhibit 1: A simplified map of hotel distribution tech

We can split the technology into two categories, which for ease of reference we will call ‘connectivity tech’ and ‘intelligence tech’.

Connectivity tech enables hotels to get their rooms on the right platforms, with correct rates, and the right availability. Connectivity tech consists of a number of key technology systems that are part of all hotel tech stacks.

Most importantly, the PMS is the heart of any hotel operation, but also the heart of distribution for many hotels. It is the one place where rates and availability are managed.

Hotel chains, and hotels that rely on GDS business, tend to have a CRS as an additional layer where reservations from all different channels and for all hotels are stored centrally. This includes reservations made through their own hotel website, which involves the use of a booking engine. Booking engines are software packages that allow hotels to accept bookings on their own website. Most CRS vendors will have a booking engine tool, but not all booking engine vendors are CRSs.

The final piece of connectivity tech is the channel manager, which pushes rates and availability out to all channels, and constantly updates these based on the latest available booking data.

Beyond connectivity tech, we also have intelligence tech. This is tech that is not vital for the distribution of rooms, but is increasingly used by hoteliers as a way of ensuring that they offer the best rates, know where the demand is and what that demand looks like, and understand what the competition is doing.

This starts with a revenue management system (RMS), which is used by a growing number of hoteliers to optimize their dynamic rates. While growing, Skift Research estimates show that currently only around 16% of all hotels worldwide use an RMS. The RMS only deals with dynamic rates, so for many hotels a large chunk of rates will not flow through that system – think of negotiated group and corporate rates, or static wholesale rates.

There is also a growing realization that a strong customer relationship management (CRM) system is vital, especially in these times of low demand. As Sally Richards, managing director at hotel consultants RaspberrySky said: “It’s incredibly difficult to forecast demand at the moment. I think it’s about being more agile and responsive to the market. … It’s about having a good CRM, it’s about understanding your customers, making sure that you’ve got the right messaging and experiential portrayal of your proposition.”

Beyond these systems there are many tools, including business intelligence (BI) tools, rate parity tools, rate shoppers and market intelligence tools, to help the hotelier make sense of the market.

Vendor offerings move beyond core products

As a result of the increasing penetration of technology into hotel distribution, there are more and more systems and tools available, offered by more and more vendors. While many vendors are predominantly known for one or a few tools, we are seeing an increasing focus by distribution tech vendors on offering a host of tools under their brand umbrella. There are still specialist players, like booking engine vendors, but most vendors are increasingly of the belief that particularly owners of small and independent hotels want an end-to-end solution for their distribution needs.

One area where this is especially prevalent is the direct booking space, with many tech vendors now offering booking engines as an extension of their core product. The booking engine, which allows hotels to take direct bookings from their own website, has become a vital part of hotel distribution. Because of this, major players in distribution tech are offering their own booking engines for free, or discounted prices, to their customers.

“Between the PMS giving a booking engine for free, and the channel manager giving it cheap or free, you’ve got two of the biggest players trying to push it before the booking engine companies can even offer it. … It’s going to be fairly tough for booking engine companies to sell their products. Coronavirus has reduced many of their revenues by as much as 80%. It means a lot of them are out of business,” said Channex.io founder Evan Davies.

No doubt, the current pandemic will have hoteliers going over their tech budgets and cutting all unnecessary expenses. Specialist booking engine players offer an unquestionably superior product over a PMS provider which sees it as a add-on, but in the current climate many hoteliers are more likely to consider a free booking engine with less features, compared to a product that has it all, but involves spending money they don’t have.

As a result, we can expect to see a speeding up of specialist companies going out of business or larger players consolidating them into their product offering. There is no longer such a thing as a PMS provider, or a channel manager. Almost all players today offer a wide range of distribution and operational tech. Below we have highlighted some of the largest companies and their product ranges.

Exhibit 2: Vendor landscape shows ‘solution-blurring’

How tech improves hotel distribution

Having set out the tech and vendor landscape, we will now discuss three key issues related to hotel distribution, and how connectivity and insights tech helps hotels to address these.

Key issue 1: Getting inventory to the right channels

Arguably the most important piece of technology that hotels utilize for the distribution of rooms is the channel manager. As explained above, in less than two decades, the proliferation of online channels has made a system to manage all these channels essential for most hotels.

Of course, there are still hotels that only rely on Booking.com or Expedia.com for their online bookings, and manage this process manually, but hotels with a slightly more advanced distribution strategy will tend to utilize a channel manager. Mark Struik, commercial director at Postilion Hotels said a “channel manager is really a must-have,” and Christoph Hütter, a revenue consultant, noted: “I am surprised that not every property I talk to has a channel manager, although it is long an industry standard.”

Most channel managers promote the fact that they provide connectivity for hundreds of different channels, but that is not to say that hotels need to be connected to all of them. Chris Jones, product manager at PMS vendor Guestline noted that “it’s very easy for hoteliers to get wrapped up and think that the more exposure across those channels, the more reservations they’ll get. … Ninety-plus percent of all reservations that we process for our customers are actually coming through five key channels, and one of them is our own direct booking engine.”

Because the distribution landscape is so complex, and so different from region to region, it continues to be extremely important for channel managers to ensure they are connected to all the important channels, as well as the newcomers.

Pierre-Charles Grob, CEO of D-Edge, which was formed from a merger of Availpro, a channel manager, and Fastbooking, a CRS and marketing solutions vendor, explained: “If you want to be efficient today, you would need three or four channels and you’re done, [but] you still see new distributors popping up from everywhere. When I started in Singapore, five years ago, Traveloka was nonexistent. Today it is the Indonesian leader and one of the main channels in APAC. If you don’t connect all the new players, you don’t know who you are going to miss.”

But market forces ensure that channel managers need to continue to innovate. What might have been a difficult process 15 years ago, today with improving APIs and more open connectivity, it becomes easier for different players to connect. Channel managers need to justify their $100 to $200 per month costs, and adding additional solutions to their toolkit is one way to do it.

As Quinten Gazendam, chief growth officer at channel manager SmartHotel said: “Channel management is becoming a commodity. What we see happening now is that the major property management systems, but also the chains directly from their central reservation system, have direct connections with the bigger OTAs, and channel managers are just used for long-tail channels. You need it, [but] you can easily switch it around.”

Channel managers have indeed been primarily focused on the pipework, the connectivity between the hotel tech stack and all the different online channels, since their founding. Gazendam, however, said his company felt it needed to “add something to that to help out hotels … and to stay relevant as a company.”

SmartHotel is looking at broader connectivity as a specialism, beyond just distribution channels, to offer this added value. In effect, it is looking to become a middleware player, providing connectivity to all different tech systems used in hotel operations, both on-premise and in the cloud. We have discussed middleware vendors at length in our Property Management System Landscape report. Other players like SiteMinder and RateGain have a suite of solutions that can be combined into an end-to-end product that takes care of everything to do with distribution.

As channel managers move beyond just offering the infrastructure, one important role these players have taken on is to be the single source of information about the hotel.

Static information, as it is called in the industry, is not the most sexy part of hotel distribution, but extremely important, especially during crisis days with limited demand. Static information includes all the information that describes the hotel, including (now) cleaning protocols and operational policies.

Chinmai Sharma, president Americas at RateGain said he is surprised to see: “so many hotels still haven’t changed their content at all and continue to sell with the same old channel content they had before the pandemic, especially when the customer is eagerly searching for some assurances on health and safety factors.” This was echoed by others, and sounds like an easy thing to solve for hoteliers.

Michaela Papenhoff, managing director of hotel consultancy h2c, however, explained the task at hand. “If you just take Booking.com and you update two room types, then a hotel needs to update 1,747 fields. Expedia has roughly 2,500 fields of static content, and this adds up. So if you then have Agoda and Hotelbeds and trivago and so on, then you can easily reach 15,000 fields that you need to update, which is simply impossible.”

It’s not only about updating content on existing connections, the amount of static content needed by channels is also a barrier to adding new channels. This is why channel managers are increasingly looking to make this process easier and use their system to be the single repository of information which is then pushed out to all channels.

“There is this contrast between effort and reward for a hotel,” Mike Ford, managing director at SiteMinder said. “If a hotel has to put in a lot more effort to get a small incremental benefit from a small channel, they’re unlikely to do that unless it’s effortless. That’s where we want to be. If you add additional channels, it doesn’t really matter.”

Many of the big OTAs work with APIs which is making this process much easier, where a channel manager, for example, could set up an entire connection, content and all, for the hotelier with one click. According to Michaela Papenhoff of h2c, however, this sounds better than it is. The consultancy has been working on its own static content tool called CONTtest, where they offer 8,500 fields of content that different channels may require. According to Papenhoff the average channel manager will only capture about 500 to 800 fields.

Papenhoff explained the need for these extra fields: “The issue is that the OTAs provide APIs for some static content updates, but only for 10 to 20% of criteria. If you want to interface or link directly into the database for all of the content criteria, then they simply don’t provide this. They want the hotel to update their extranet. That’s a real issue for our industry, especially now with limited resources, and I strongly request that this should change.”

Beyond static content, channel managers are also increasingly providing additional insights about distribution or market conditions. Mike Ford of SiteMinder talked about his platform “pivoting,” saying “we are blending intelligence and information with that [distribution] technology in order to drive insights to hoteliers where they can actually have actionable insights on tool sets in real time.”

Chinmai Sharma of RateGain said his company is “in active discussions, and we’re actually already doing it with some partners, where we offer an industry-first combination of connectivity and a parity solution combined.” This added focus on insights for hoteliers pushes channel managers into the fast growing space of business and market intelligence tools, which provide an answer to our second key issue.

Key issue 2: Understanding where the demand is

The hotel industry is ruled by demand and supply, but unlike many other industries, the demand side is extremely volatile. A major conference will boost demand for a specific week considerably, while a local outbreak of coronavirus can drop demand to zero. Even in normal circumstances, without any major events, the industry has to cope with seasonality and weekday versus weekend demand cycles, all of which has an impact on how hotels should price and distribute their rooms.

Smart hoteliers think of distribution questions as part of a broader algebraic equation. To figure out what rates they should set for a leisure traveler booking last-minute for this weekend, and what rates to set for a possible business meeting in early 2021, they need to parse out how much inventory they should set aside for each and what they should charge for each, and those calculations depend on what the demand might be. Many will worry, however, that they don’t have the full, or an incorrect, picture of demand.

There is a growing number of solutions to help hoteliers figure out how much weight to give to each distribution channel. We are not at the stage yet where hoteliers can get a complete picture, having all the needed inputs available to make an accurate forecast. But, things are certainly improving, albeit in a patchwork fashion.

No single system can pull in a snapshot of demand in each channel, to help hoteliers decide how much inventory to set aside for channels and at what rates. Instead, hoteliers are forced to pull together data from different systems to make a prediction.

Data is available from many different angles, and supplied by a network of vendors. There is a lot of overlap between the products and tools offered, as we already showed above in the vendor landscape:

  • Channel insights: All channels will provide data to hotels, with some players more sophisticated in their data analytics than others. “Booking.com has got a lot of intelligence … What [they] give you now is incredible,” said Steve Lowy, founder and CEO at The Residence Apartments. Together with data analytics from other OTAs, GDSs, and bed banks like Hotelbeds, hotels have a host of data available to them. Third-party vendors like D-Edge’s DataCruncher can provide even more detail on channel performance.
  • Internal data: The booking engine can provide the hotel with data, and vendors like Travelclick use on-the-books data to forecast demand using its Demand360 tool. Specialized companies like Kalibri Labs and Focal Revenue provide in-depth analysis of internal data, often combined with external data.
  • Market intelligence: STR is one of the best known sources of market intelligence data, providing aggregated insights into hotel key indicators. Rate shoppers are an important element of market intelligence, providing an insight into competitor pricing across all different channels. Many vendors have rate shopping and market intelligence tools, including OTA Insight, RateGain, SiteMinder, D-Edge, MyDigitalOffice, Fornova, and more.
  • Business intelligence: This is all about combining different parts of (mostly) internal data to provide and visualize a coherent picture of business operations. Specialized players for the hotel industry include Juyo Analytics and HotelIQ.
  • Revenue management: Revenue management systems like IDeaS and Duetto provide sophisticated tools to read current and future demand, and many RMSs today have autopilot functions which use this data to take the revenue management aspect of hotel distribution completely out of the hand of hoteliers.
  • Rate parity tools: We discussed the issue of rate parity in Part I. Many market intelligence vendors provide rate parity management tools, including OTA Insight, RateGain, Fornova, as well as Triptease, Pegasus and more.
  • Digital marketing and metasearch: Specialized hotel marketing companies like Sojern, MyHotelShop, Koddi, Derbysoft, Intent Media, or WIHP can provide hotels with insights into the effectiveness of their direct booking, digital marketing, and metasearch campaigns. Companies like Cendyn focus particularly on email marketing.
  • Visualization tools: A lot of the vendors above focus heavily on providing easy-to-use dashboards. But there are also tools, including something as commonplace as Microsoft Excel, that allow for the collation of internal and external data into in-house built dashboards. Players include Tableau, Sisense, or Microsoft’s Power BI.

As the above list shows, there are a lot of tools available. Despite this, or maybe thanks to this, understanding demand metrics remains seen by many hoteliers as a complicated and costly process. For that reason, many hoteliers continue to rely heavily on their ‘competitive set’ to guide their decisions. Many of the tools above also use the ‘comp set’ as a starting point of providing analysis. This can be a dangerous game, as we see too many hoteliers just copying whatever their rivals do, with everyone chasing everyone in a race to the bottom.

“If you ask a hotelier to define their ‘comp set,’ very likely they will give you some hotels that have nothing to do with that,” said Simone Puorto, CEO and founder of hotel tech consultancy Travel Singularity. “But there are tools out there, very simple tools such as Expedia’s Booking Insights, that can identify the competitive set. That is a little more scientific than just picking up a few hotels near you with the same star rating.”

With this proliferation of technology, even to determine the comp set, the question remains whether there is a platform or vendor that can put all the information together. We have seen steps by vendors to move into this direction, including channel managers as discussed above, and there is a growing number of partnerships between different tech vendors to provide a more holistic picture, but as of today we feel there is no such system. We expect for this process to speed up over the coming years as hoteliers become more aware of the information they need, and the current crisis will give clarity around what data or insights they are currently missing.

Key issue 3: Viewing distribution as more than just the pipework

Above we have set out the host of data analytics tools and vendors that provide hotels with invaluable insight into their hotel operations. We can cast the net even wider, though, and consider other tech systems as enabling efficient distribution as well. This is what is increasingly done by hoteliers, who are no longer just looking at the channel ‘pipework’ as the technology needed for effective distribution, but consider systems like reputation management systems, guest messaging or chatbots, a mobile app, and even keyless entry systems as tools that enable better distribution.

When looking at hotel distribution from a guest’s perspective, we see that this is moving increasingly onto mobile devices. Due to the pandemic, there is a greater expectation of the stay being contactless, more local, and with shorter booking windows. All this impacts where and how hotels should distribute their rooms, and it also influences what technology they need to effectively distribute.

“It’s no longer just making sure that the reservation technology is plugged into the travel agent system or whatever. Now, all of a sudden we’re enabling the customer journey, from the time they first think about a trip all the way through their stay and even beyond, and that’s distribution strategy now,” said Cindy Estis Green of Kalibri Labs.

During the current pandemic we have seen hotel companies like Marriott pivoting their marketing strategies, by focusing not just on marketing their hotels, but marketing entire destinations to get people traveling again.

Travelsify worked with Marriott to provide an ‘Explore Destinations & Experiences’ search and discovery feature on their homepage. Alexandra Fernandez Ramos, chief product and sales officer at Travelsify said : “Marriott quickly realized during the pandemic that it was not about promoting Marriott hotels anywhere in the world with one-size-fits-all campaigns, but to pinpoint nearby drive-to destinations matching specific customer interests and let them personalize their search according to their own interests. This can only be done if you have relevant data about destinations, experiences and hotels.”

The distribution strategy is also impacted by in-stay technology. “If the consumers are all going online for both information and for booking, and now they’re going online for part of their stay, that’s a big change,” said Cindy Estis Green. “When I think about distribution strategy, you want to think of all that. You can’t just think of it as a pipe to bring a reservation.”

In today’s climate, we see that particularly contactless technology has moved beyond a mere buzzword, and many hotels have introduced new touchless technology, which means that not offering these technologies could hinder a hotel from distributing their rooms effectively.

The industry as a whole is only at the inception of looking at distribution in this holistic way. A distribution strategy for most hoteliers involves a broad understanding of how much inventory they will provide to OTAs, how much to bed banks, and how many bookings they would like to get through direct channels and against what investment.

A big step forward, according to Christoph Hütter, is for hoteliers to remember that price and value are two different things. “We are not only there to sell on price, but we need to sell on value and we need to increase the value of a booking. How [distribution] is often practiced today, and how brands are doing it, is through price. So they’re doing value-based selling through a membership discount. That’s not value adding, that’s discounting.”

A distribution strategy should involve an understanding of the value that the hotel offers, and how value can be added during different parts of the customer journey. This puts the hotelier in a better position to understand and market its hotel on different distribution channels, and provides a clearer value proposition to increase direct bookings, which as we discussed in Part I, has become something of a holy grail in hotel distribution.

Conclusion

To explain the differences in hotel distribution technology that are available to hoteliers today, this report has introduced the concept of ‘connectivity tech’ and ‘intelligence tech’. Connectivity tech enables hotels to get their rooms on the right platforms, with correct rates, and the right availability. Intelligence tech is technology that is not vital for the distribution of rooms, but is increasingly used by hoteliers as a way of ensuring that they offer the best rates, know where the demand is and what that demand looks like, and understand what the competition is doing.

This technology helps solve a number of key issues. The first issue is to get hotel rooms onto the right channels, and channel managers are without doubt the most important tech player to do this. Channel managers are becoming more than just the pipework, instead increasingly providing market and business insights to help hoteliers make better decisions.

There is a growing demand for this type of insight, from channel managers but also from other vendors, and this relates to the second issue identified in this report, namely to understand where demand is. It is important for hotels to know where to offer their rooms, but demand is volatile, and so hoteliers need technology to understand the market. The problem is that there is a large network of tech vendors that all provide some pieces of the puzzle, but as of yet no single vendor can provide a complete picture. Tech vendors are certainly working hard to try and be the first to offer this.

The final issue that hoteliers need to consider is that hotel distribution is not simply about understanding demand and placing rooms in the right channels. Instead, hotel distribution makes up only part of the guest journey, while at the same time being impacted heavily by other parts of this guest journey. The guest journey today is centered around mobile devices, which offers more and different ways to distribute rooms and engage guests. With the current pandemic, contactless tech is increasingly prevalent in hotels, offering further ways of connecting different aspects of the hotel stay to better understand the guest, and ultimately improve distribution strategies.