Ms. Portmann

Sales & Marketing

New Technologies to Improve Relationships and Bottom Lines

By Toni Portmann, Chief Executive Officer, DHISCO, Inc.

If there has been one constant since the dawn of online travel agencies, it probably would be the often tense, love-hate relationship between online travel agencies and hotel companies.

Historically, hotel companies embraced these partners to boost sales in the down times. Yet they often bristle at high OTA commissions and the loss of control over their customers during the boom times.Take 2016, for instance: it may best be remembered as the year the world's major hotel companies launched aggressive campaigns to drive customers away from OTAs to their branded sites. Most major chains now offer perks to guests who booked direct, while imposing penalties - like withholding frequent-traveler points - to those who book on third-party sites. In response, some OTAs quit sharing some information about their customers, including the email addresses of the guests who are booking through their websites.

It's the latest twist in an ongoing power play and one that reignites lingering feuds and questions over who actually "owns the guest." While OTAs and hotel companies likely will debate that question for years to come, I would argue that no one and everyone owns a piece of the guest. And the debate is about much more than guest email.

New Technologies

As the number of business-to-business players in the travel landscape rises, the chain of third parties involved in the travel search and booking process will only continue to grow as consumers demand rich content, Siri-style help via artificial intelligence, multilingual translations and other advances to ease the planning, booking and real-time travel process via smartphones, tablets and computers.

At DHISCO Inc., our main role has been and always will be that of intermediary, connecting hotels and OTAs and developing the technologies to help them facilitate their transactions. Every day we see the importance of technology as the bridge, making it easier for hotels and OTAs to work more closely - and amicably -- to manage inventory, rates and revenue and process transactions and share content.

OTAs are not going away. They are only going to get more sophisticated. And no smart hotel company is going to try to compete without them. In the age of Airbnb and other disruptors, maximizing third-party relationships that increase a property's exposure may be more important than ever. So, instead of rehashing what are now almost two-decades-old debates and tensions, smart hotel companies should be looking to new technologies to improve their relationships along with their bottom lines. There are a lot of new innovations out there that will do that.

According to a recent report from Tnooz, business-to-business startups that target the industry with new services and tools are capturing the attention of investors over business-to-consumer startups, in part because it has become all but impossible to compete in the consumer space with the large and well-established OTAs.

That's good news for hotel companies and OTAs alike, which can't develop or manage all the technology they need to keep up with the newest advancements and consumer demand for rich, dynamic content with fast, real-time responses and booking capabilities across their mobile and other devices.

Among the buzzwords on everyone's lips these days are "artificial intelligence" and "multilingual translations." These are two areas where we are seeing some of the most exciting technological developments for the future and where hotel companies on their own are unlikely - without massive investments − to become innovators or leaders. They are going to need partners to help with that, whether it's their existing OTA partners or new service providers along the chain. Translation is one of the trickiest challenges facing our industry today. While technology has made it easy for companies to go global, it is much more difficult to translate and update content across multiple languages.

Artificial intelligence and quality translations are rising to the top of essential technology. Yes, English is the language of business, but if you can't read it, you won't book it! Technology has simplified automatic translations on a rudimentary level. But research and experience in this field has shown that consumers are turned off by poor translations. In other words, do it right or don't do it all, which for many companies means finding a partner with solid expertise and a proven track record, not just in translating but also in adapting those translations to local colloquialisms and other regional language quirks.

There are also some really cool things going on with artificial intelligence. Zumata, a Singapore-based hotel distribution and technology company, last year was accepted into IBM's Watson project to develop its new platform for letting travelers search using their native languages that goes way beyond simple date and destination queries.

For example, a customer might type, "I need a luxury hotel in Sydney with a view of the opera house, an indoor pool and free Wi-Fi." Results returned will display images of the hotel view, amenities and sentiments about the hotel from other traveler's online reviews. The system learns with each interaction, offering potential for advancement in areas like predictive pricing. What Zumata is doing is exciting. Even more exciting is their enthusiasm for collaborating across the industry and sharing personas and packaging solutions.

Mobile is Critical, but the Travel Industry Lags

According to Google, another 1 billion people globally will be coming online in emerging markets over the next four years. The vast majority will be connected only by mobile devices. We are now hearing "mobile first" and "mobile only" as distribution channel strategies. But the hotel industry is notorious for being behind the curve technologically. In fact, the age of the legacy systems still used by many large hotel companies is the source of much of the underlying tension between hotels companies and OTAs.

Hotel data from those legacy systems isn't structured to be consumed by mobile devices. Moreover, many of these systems can't handle the multiple connections needed to keep up with the growing list of distribution partners seeking faster access to more accurate rates, hotel information and dynamic content.

As OTAs have multiplied, hotel companies have had to manage more and more data connections to enable onward distribution. These connections can be complex to implement and costly to maintain. What once was a single interface to an OTA now might now be four separate interfaces, depending on the products being sold and the connection topology. And with the rise of new, smaller players in the travel booking world seeking real-time rate and availability information, many in the industry are beginning to suffer from direct-connect fatigue.

One-to-Many Connectivity

In response, distribution companies are leaning more heavily on "one-to-many" connections called "switches," developed and operated by third-party technology companies that supply access to both cached and real-time rates and availability information from hotel companies, large and small, around the globe. Likewise, these one-to-many connections provide hotel companies access to more distributors, both large and small, around the world without building additional connections. These easy one-to-many connections become even more important to the overall OTA-hotel relationship as consumers seek rich, dynamic content and hoteliers want to leverage dynamic rates, dynamic packaging and sophisticated revenue and yield management.

The Content Challenge

And, then there is the issue we often refer to as the "content conundrum." Consumers want to know a lot more than what a room costs. It's challenging to match pictures, property and room information with rates and inventory geared to the persona of the traveler, along with everything else consumers want to know about a hotel's services, rules, amenities and fees, while displaying it all coherently, quickly and accurately during the booking process. Are things like breakfast included? If so, for whom? Do you split out resort fees or bundle them? What is the total price and what does it include? And, if I chose to cancel, then what?

With all of the hotel and travel information now available at the click of a mouse or a tap of the finger, most people probably would be shocked at just how difficult a proposition that is. Across the world, many travel companies are still sharing information with OTAs via spreadsheets, then loading rate and availability information by hand.

To solve these issues, the industry needs to collaborate to develop common data structures that make it easier for systems, old and new, to talk to each other and work together so partnerships between OTAs, hotel companies and other third-party services are seen as mutually beneficial rather than an expensive burden.

HEDNA − short for the Hotel Electronic Distribution Network Association − has for years been working to solve that very problem. It's a slow process, but we are seeing renewed interest across the board as the industry recognizes it can no longer delay efforts to solve this puzzle as consumers are demanding one-touch access to pet polices, child pricing, restaurant hours, transportation and bathroom amenities, among other issues. Rather than a roomful of people manually entering spreadsheet data into old systems, we need a structure that enables OTAs to download the attributes for hundreds of properties in seconds. Then we need to understand how much the display of those amenities correlates to revenue generation.

Personal Touch and Great Service Win the Guest

There are also a host of dashboard-type tools being developed to make it easier for hoteliers and distribution partners to monitor their inventory and rates in real time so they can better adjust what they want to offer specific channels at any given time. After all, nothing can reduce tension between hotels and OTAs like seamless, transparent connections that drive incremental room revenue and attached services without huge customer acquisition costs. An exciting new OTA, FastPay, will book a reservation up to 365 days out without a cancellation option and will pay the hotel, in full, upon booking.

Onyx CenterSource, which handles commission payment and recovery services for hotels and travel agencies, recently posted a blog with some simple tips for helping OTAs and hotels get the most from their relationship, noting that with "just a little more planning, research and help from channel management specialists and commission payment and recovery services specialists, hotels can improve their standing − literally and figuratively − with OTAs while reducing their costs and increasing revenues."

That's advice that should be heeded across the travel services spectrum. After all, any good business person knows that reduced tensions lead to easier negotiations that in turn often lead to more favorable contract terms that give both parties greater control of their pricing. When interests are aligned, everyone is happy, and everyone has more time to spend on the initiatives that stand out and give them a chance to own their customers the old-fashioned way: through personal touch and outstanding service.

Toni Portmann is CEO and executive chairman of the board of DHISCO Inc., the world’s original and leading hospitality distribution company. With extensive experience across software, hardware and technology services and support, Ms. Portmann has spent more than 25 years in executive management. She joined DHISCO at the end of 2014, bringing a wealth of management skills and expertise in mergers and acquisitions, strategic planning, process improvement and innovative sales solutions. Prior to joining DHISCO, Ms. Portmann served as CEO for LockIN, an early stage, paradigm-busting SaaS e-learning company. An entrepreneur and “intraprenuer,” she also served for 10 years as chairman of the board of Resolvity. Ms. Portmann can be contacted at 214-234-4072 or support@dhisco.com Please visit http://www.dhisco.com for more information. Extended Bio...

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