The hospitality sector is not immune to new technologies and innovations.
The emergence of cutting-edge software solutions has already profoundly altered how hotels handle their distribution channels, opening up new possibilities for growth and efficiency.
However, does modern tech live up to the hype? Is it genuinely worth the investment?
This article answers these questions.
We explore the benefits of software solutions for hotel distribution, explaining how they revolutionize the way properties reach their target audience and engage with it.
So, if you’re still skeptical about using new technology for your hotel, give this article a read.
Maybe it will change your mind.
Facilitating Channel Management
The truth is, if you're not using dedicated software for channel management, you're failing to maximize the potential of your distribution platforms and creating extra unnecessary work for yourself.
Manually juggling between your hotel's website, social media, OTAs, GDS, and other channels, can be truly arduous and time-consuming.
Fortunately, it doesn’t have to be that way.
Channel manager solutions allow users to automatically update information about room availability and prices across all channels, ensuring guests receive timely and accurate information.
Wondering how these systems make this possible?
Essentially, channel managers operate through a two-way integration, acting as connectors between various distribution platforms and your property management system (PMS).
They pass on the inventory data from the PMS and seamlessly transmit it to the channels.
When a reservation (or cancellation) occurs, they relay information such as guest name, payment details, and booking date back to the central system.
In short, the software ensures your inventory stays synchronized across all distribution platforms, saving you significant time and effort.
But beyond the evident time-saving advantages, using channel manager software is crucial for avoiding common booking errors, particularly double reservations.
If someone books a room through your website but you don’t have the tech to instantly update other channels, the room continues to appear available, possibly leading to another reservation of the same room.
Overbookings don’t just create uncomfortable situations at the front desk for guests and staff but can be quite detrimental to your hotel’s success in general.
They can harm your reputation, potentially causing you to lose future bookings.
Sure, a single negative online review may not irreversibly damage your hotel's respectability, but persistent issues could erode customer trust and loyalty over time.
Therefore, this technology becomes essential for any hotelier aiming to streamline their hotel distribution, increase bookings, boost revenue, and, of course, enhance the overall customer experience.
This piece of tech is not just about convenience, but about providing your guests with the best possible service, every single time.
Increasing Direct Bookings
Your website is potentially the most profitable distribution channel, but to make the most out of it, you need the tool that’ll make the direct booking process a breeze for your guests.
That’s precisely the job of a booking engine.
These solutions are designed to make the booking experience as simple as possible.
And according to Grazia Dell’Aquila, a business development manager at Autentico Hotels, that’s exactly what you need if you’re looking to increase direct reservations.
Since the main objective is to get more bookings without necessarily having to pay a commission to an OTA, hotels have to focus on getting more visibility than the OTA and attracting new audiences (...) by presenting these 3 key elements: a responsive website, an easy way to book the hotel in very few steps, a careful presentation of offers and services.
Our very own WebBookingPro aligns with Dell’Aquila's insights, facilitating a quick and easy hotel room reservation process.
But, what makes this solution ideal for hoteliers?
WebBookingPro is fully customizable and easily integrable, demanding minimal effort on your part.
Enabling direct reservations with our software takes only minutes, resulting in a booking page that seamlessly aligns with your brand aesthetics, as demonstrated in the image below.
Source: Hotel Calypso
However, the system benefits your guests as well.
Once a room is selected, users are promptly directed to the checkout page, without redirection to a third-party site, where they enter their personal information, and voilà—the room is booked.
One of the most significant advantages of using this piece of technology and increasing direct bookings is more profitability.
Eliminating OTA fees, which can range from 10-30%, allows you to retain a more considerable portion of your earnings because, unlike third-party websites, WebBookingPro doesn’t impose any additional fees on bookings.
Furthermore, direct bookings also open the door to enhanced guest relationships through personalized customer experiences.
When they book with you directly, your guests have the opportunity to communicate with you before, during, and after their stay.
That enables them to express any special requests, or service preferences, or even gives them the chance to renegotiate booking terms and conditions.
Third-party websites don’t offer such flexibility, limiting your ability to build lasting relationships with customers—relationships that could make them return to your hotel in the future.
So, don’t think of the integration of a booking engine as just a technological upgrade, but as a strategic leap toward boosting direct room reservations and enhancing your reputation, ultimately improving your bottom line.
Enabling Dynamic Pricing
Nowadays, there’s a wide array of technological solutions that handle dynamic pricing—an essential component of any effective hotel distribution strategy.
Revenue managers, for instance, leverage AI and algorithms to analyze market demand, competitors’ rates, and your hotel’s historical data and then adjust the room pricing in order to maximize profit generation.
As you know, during high-demand periods, offering discounts can be quite counterproductive, while keeping those high prices in the low season, on the other hand, might discourage guests from booking with you.
This underscores the primary advantage of dynamic pricing: making sure your hotel remains fully booked throughout the year.
Think of this technology as a guide toward the optimal pricing strategy for attracting customers around the year, bringing in a continuous stream of room reservations.
And remember, some travelers deliberately choose to travel during the low season because of the lower rates.
Dynamic pricing solutions enable you to capitalize on this market segment of bargain hunters, providing them a reason to book with you.
Another significant benefit of dynamic pricing technology is the elimination of human error through automation.
Let’s be real, adjusting prices on every single distribution channel manually is bound to result in mistakes.
For example, due to an error, dozens of people were able to book a room at Jerusalem’s Ibis Hotel for NIS 59.9 ($16.13) a night, instead of the regular NIS 599 ($161.29).
Aaron Bernstein, CEO of Ibis in Israel chose to honor the mistake rate, stating:
“As an international chain, we are held up to international standards and everything that means, so we decided to honor all those who managed to book rooms at NIS 59.9 a night with breakfast.”
Embracing such errors can certainly save face, but it can also significantly hurt a hotel’s finances.
On the flip side, The Radisson Blu Hotel and Spa in Cork faced criticism when an employee mistake caused a massive price increase during floods in Midleton, which forced hundreds of people to evacuate.
The hotel was perfect for those who were seeking a place to stay, but many were unable to book due to the exorbitant price.
The hotel later issued an apology, but, as the comments underneath the article about the incident indicate, the damage to the hotel’s reputation was already done.
Source: Irish Mirror
Revenue management systems circumvent such issues, protecting your hotel's name and financial well-being.
In essence, investing in dynamic pricing technology isn't just about income maximization.
It's a strategic move to avoid missed opportunities and safeguard your hotel's overall stability and reputation.
Centralizing Hotel Operations
Managing a hotel isn’t an easy feat by any means.
Fortunately, technology, such as property management systems (PMS), now exists to centralize and streamline various processes within this complex operation.
These processes include:
- Front desk operations
- Payment processing
- Customer data gathering
- Guest management
- Reports, and analytics
In essence, the PMS consolidates the multitude of core functions of a front desk and back office into a single solution, making it one of the most important pieces of technology in the industry today.
As demonstrated in the image below, the true value of PMS lies in its ability to facilitate communication across various departments within your property, granting you enhanced control over your overall operations.
To deliver the best service possible to your guests, it’s imperative that all the processes mentioned above operate seamlessly in harmony.
PMS achieves the coordination of all aspects of hotel operation by empowering you to:
- Establish and monitor departmental goals.
- Share data and reports not only from the PMS but also from other integrated systems.
- Utilize communication platforms for efficient messaging and notifications.
These features significantly expedite communication among different team members, thereby assisting them in streamlining their day-to-day tasks and responsibilities.
Let’s take housekeeping for example.
While their primary responsibility is to maintain the cleanliness of the property, collaboration with the front desk and maintenance staff is essential to prevent delays or disruptions in this aspect.
With PMS, your housekeeping team can better manage their schedules based on occupancy and demand, so, say, when a room is booked, they receive immediate notification, enabling them to prepare it promptly for the arriving guest.
No more dirty rooms, dissatisfied guests, and bad reviews like the one below.
Moreover, if a housekeeper notices damage or another issue with a room, they can use the PMS’s messaging platform to notify the maintenance team, ensuring a swift resolution of the problem.
But the software doesn’t centralize just the data regarding your staff but your guests as well.
In other words, it helps create detailed guest profiles by compiling information such as:
- Stay and transaction history
- Preferences and requests
- Personal data
Based on that, you can offer more personalized experiences to your returning guests, turning them into loyal customers who will keep coming back to your hotel.
All in all, a PMS serves as the key to improved operational efficiency, guest satisfaction, and ultimately, a better hotel reputation.
Without a system that centralizes information related to rooms, guests, bookings, or maintenance, effective inventory management and the delivery of an exceptional customer experience would be nearly impossible.
Therefore, the adoption of PMS emerges as a strategic must-have for hotels aiming to thrive and increase their bookings.
Enabling Data Analysis
Many of the technological solutions we’ve covered so far gather useful data and provide analytics tools that make sense of that information, helping you derive meaningful insight from it.
This is essential if you're looking to improve your distribution strategy.
Accurate data assists in making informed decisions, optimizing processes and workflows, as well as enhancing the overall guest experience.
Without data, you’d be unaware of booking trends, customer demographics, occupancy rates, competitors' pricing strategies, market demand, and the performance of different distribution channels.
Data analysis helps you understand what worked so far as well as predict what will work in the future.
Demi Horvat, the CEO at AirDNA, concurs that data analysis has never been more crucial when it comes to forecasting.
Evidently, it's not only necessary to compile information, but also to know how to use it in a meaningful way.
Thankfully, software solutions with their analytics tools can help with that.
For instance, data gathered through revenue management systems, such as historical booking patterns, demand, or competitors' prices, can help you determine dynamic pricing strategies that will attract more guests.
Billy Copelan, director of revenue management at Sea Island Resort, explains how he used such data to calculate optimal rates that attracted more guests to their golf courses, even those that were less popular at the time.
Golf is a huge part of our business. (...) We look at all the data we have to understand the highest demand times of the day and times of the week, and then price golf tee times based on what we see. We’ve seen a huge increase in revenue on what used to be our lowest performing course, and driven results there as well as on our two more premier courses.
He demonstrates that data-driven pricing doesn’t only for your rooms but also for hotel amenities.
Overall, to be able to align your distribution strategy with the market demand, it’s first necessary for you to monitor and fully understand that demand.
Enter data analytics tools, serving as indispensable guides in navigating the dynamic, and often complex, hospitality industry.
Taking everything into consideration, it's safe to conclude that, yes, technology is definitely worth the hype.
Not only does it enhance overall efficiency and profitability, but it also proves valuable when devising the best distribution strategies, cultivating stronger relationships with your guests, and sculpting unparalleled customer experiences.
Remember, staying current with the times is a must if you're aiming to stay competitive.
Hopefully, this article has shown you the benefits of doing so, emphasizing that it's not as challenging as it might appear.