The Reality of Hotel Direct Connects

By Mike Kistner President, Chief Executive Officer & Chairman of the Board, Pegasus Solutions | July 31, 2011

Hotels need distributions channels – a simple and seemingly obvious statement that encompasses one of the most important aspects of selling and merchandising a hotel's products. How to reach consumers in the most efficient, cost-effective way and stay ahead of the proliferation of distribution opportunities and their ever-increasing demands for information?

Twenty years ago, The Hotel Industry Switch Company, also known as THISCO was created at the direction of 16 hotel companies. The hotel companies operated in a world of seven global distribution systems (GDS) and were taxed with having to maintain direct connections to the GDS. Hotels wanted lower development costs, simpler maintenance and the ease of one place to conduct and convey their business. Accordingly, THISCO was formed, and electronic distribution as we know it was introduced. This historic move was made to avoid a total of 112 direct connects across 16 companies.

Imagine that conundrum today. Yes, the seven GDS have consolidated to four, but they have been compounded with hundreds, even thousands of online distribution points. In the last 20 years, the Web has emerged as a major force in the way hotels are sold, redefining electronic distribution to include both GDS and alternative distribution systems (ADS), also known as online channels. The GDS consists today of mostly business travel bookings, while the ADS has emerged as a mostly leisure channel where aggressive shopping and bargain hunting prevail.

Managing electronic channels effectively has never been so important. Looked at from the perspective of the distribution channels, there's a wealth of descriptive content, images and real-time availability information available. The challenge of the distributors is to get hold of the information when they need it, quickly and efficiently. As the rapid pace of technology evolution and adoption continues around the world, consumers expect access to comprehensive information from every entry point, whether that is browsing and online travel agency (OTA) Web site, using a mobile application or through social media.

On the supplier side of the pictures, hotels must be able to consistently merchandise and distribute their products through the widest community of channels, while at the same time retaining control and minimizing the impact on their technology infrastructure and resources.

If managing 112 direct connects with this information was overwhelming more than 20 years ago, which more simply means that seven direct connects were challenging then for major hotel chains with resources, then what does that mean today? In our case alone, we connect around 65 hotel chains and suppliers to about 110 distributors directly, including the GDS, making the total of distribution points approximately 114. That translates to 7410 direct connects that would need to be made (and maintained) to conduct the same amount of business we manage as a transactional intermediary.

Choose a Social Network!

The social network you are looking for is not available.


Hotel Newswire Headlines Feed  

Pedro Colaco
Roger G. Hill
David Michael Jerome
Juston Parker
Kelly McGuire
Frank Meek
S. Lakshmi Narasimhan
Kristie Dickinson
Roberta Nedry
John Welty
Coming up in June 2019...

Sales & Marketing: Selling Experiences

There are innumerable strategies that Hotel Sales and Marketing Directors employ to find, engage and entice guests to their property, and those strategies are constantly evolving. A breakthrough technology, pioneering platform, or even a simple algorithm update can cause new trends to emerge and upend the best laid plans. Sales and marketing departments must remain agile so they can adapt to the ever changing digital landscape. As an example, the popularity of virtual reality is on the rise, as 360 interactive technologies become more mainstream. Chatbots and artificial intelligence are also poised to become the next big things, as they take guest personalization to a whole new level. But one sales and marketing trend that is currently resulting in major benefits for hotels is experiential marketing - the effort to deliver an experience to potential guests. Mainly this is accomplished through the creative use of video and images, and by utilizing what has become known as User Generated Content. By sharing actual personal content (videos and pictures) from satisfied guests who have experienced the delights of a property, prospective guests can more easily imagine themselves having the same experience. Similarly, Hotel Generated Content is equally important. Hotels are more than beds and effective video presentations can tell a compelling story - a story about what makes the hotel appealing and unique. A video walk-through of rooms is essential, as are video tours in different areas of a hotel. The goal is to highlight what makes the property exceptional, but also to show real people having real fun - an experience that prospective guests can have too. The June Hotel Business Review will report on some of these issues and strategies, and examine how some sales and marketing professionals are integrating them into their operations.