Disrupting channel management: How your hotel can benefit from the same hotel technology as the big chains
There are thousands of ways to book a hotel room – most of them online.
SiteMinder has a smart and simple approach to optimising a multi-channel booking strategy, as Choctaw Casinos found out earlier this year.
Choctaw Casinos says it’s crucial for its properties to have all of those rooms available across every booking platform, and keep them updated in real-time by using a pooled inventory system.
Fig Cakar, managing director, Americas, for SiteMinder, recently explained how it works to leading magazine, Casino International.
Casino International: What does SiteMinder do?
Fig Cakar: Overall we are a tech company that enables hotels to market, sell and distribute their rooms online through a broad suite of product solutions. Our flagship offering is channel management, and our work with Choctaw has them using our channel manager allowing them to connect to more than 350 online channels, and then manage and distribute all their rates and inventory through that one platform. When you have more than a thousand rooms at a property – as Choctaw does – having a single, reliable and stable distribution platform in place is paramount for scalability and optimising both your inventory and revenue.
CI: So you’re saying the tool is simply inventory management?
FC: And distribution, yes. That’s exactly what our channel manager does. We are talking room inventory, of course; SiteMinder’s channel manager manages and distributes room rates and inventory for hotels so they can increase their chances of being booked online. Anyone can try and sell a thousand rooms but the most important thing is, what happens when you are down to the last five, 10, or 20 rooms? How do you distribute those to 30, 40, 50 booking sites and give the sites equal access to sell those remaining rooms for you without running the risk of double bookings?
SiteMinder’s Channel Manager incorporates a pooled inventory model to solve this exact problem.
Let’s say you have only five rooms left but you’ve made your hotel bookable through 20 online channels; in the past, you would have had to take a guess as to how you best allocate those remaining five rooms between your 20 chosen channels, and then just hope for the best.
Traditionally, hotels would give their last rooms to their strongest, best-performing channel. Now, hotels can take advantage of the pooled inventory model that SiteMinder’s Channel Manager provides so instead of having to give allocations to specific channels only, all of a hotel’s chosen channels get equal access to the five remaining rooms. So, if you have a guest searching on, say, Expedia, and that guest wants to buy three of your five remaining rooms, with the old model they might only be able to book the one or two that you allocated to Expedia; with our pooled inventory model, they can book their three rooms not just on Expedia but on every channel your hotel is listed on because you would’ve distributed your rooms to all your channels and given each the same access to your remaining inventory.
SiteMinder has really allowed the hotel market to optimise their inventory right up to the last minute, which is crucial in today’s market where travellers are far more spontaneous in how they plan their trips.
CI: Did your service come about as a response to how people book accommodation now then? You are enabling the supplier – in this case Choctaw – to treat all of its partners, and by extension their customers, with the exact same importance, all of the time.
FC: Absolutely. SiteMinder’s Channel Manager has very much levelled the playing field in the market, in every sense. In the past, without pooled inventory, the biggest, most dominant players might’ve controlled the supply, but now the opportunity is there for mid- and lower-scale players to have the same access. Hotel operators can now allow all of their channels to be on the same playing field and leave it with those channels to compete for the online consumer on the hotel’s behalf. It’s like first in best dressed. For a company like Choctaw, that’s huge because they can sell all 1,000 rooms online, at any stage, to any operator they work with, and no longer rely only on their top sellers.
CI: Why hasn’t it always been like this? It makes such perfect sense…
FC: Channel managers have been around for some time; the better part of the last 15 years, but SiteMinder was the first to develop a true pooled inventory model from a channel management perspective. The challenge for the industry has been in the way that technology was developed to provide two-way connectivity to those channels. SiteMinder was the first to provide a reliable two-way interface for the plethora of channels out there to connect with us and ultimately with hotels.
A lot of our competitors will claim they update 400, 500, even 600 channels, but in reality many of those connections don’t allow for a hotel’s data to flow two ways; some are just one-way, so they may only deliver inventory, not rates, for example, and then fail to deliver reservations back to a hotel in real-time so the hotel gets overbooked.
Some providers screen-scrape [low-tech, unauthorised access to a site where data is lifted or ‘scraped’ from the screen to update another site with for example, room availability] when they don’t have what we call a ‘direct connect’, or an actual connection, with that channel. This reality imposes several problems on hotels because, for a hotel to efficiently and cost-effectively manage their inventory, all their systems need to be able to speak with one another and recognise real time availability and rates.
It doesn’t matter if you get 1,000 bookings or 15,000, you pay the same amount.
SiteMinder also introduced a very disruptive business model to the industry. Many of our competitors still charge on a transactional, per-booking basis – we work off a flat monthly fee. It doesn’t matter if you get 1,000 bookings or 15,000, you pay the same amount. So, if you are a casino group with, say, 20,000 hotel rooms being booked through various channels each day, the traditional, transactional model might have you paying anything up to $100,000 in fees just to get your rooms out there; compare that to our top rate of $799 per month for a property with more than 500 rooms, and you can see where our customers save money. I know at least one hotel group here in the US that could’ve saved a quarter of a million dollars every year just by using our tech. For small independent hotels, it’s this disruptive model that they find so attractive because they can be paying a fee as low as $75 each month and benefit from using the exact same technology as the largest brands and chains.
CI: How many hotel customers does SiteMinder have now? What’s been your story?
FC: We now have more than 22,000 hotel customers and our footprint is very much global, although we began and are headquartered in Sydney, and we have very dominant market share across Australia and New Zealand. Europe and Asia came next, and we now play a major role in those regions. It’s only been in the last couple of years that we entered the US market, where many of our competitors are headquartered, and already the US makes a respectable portion of our global customer base. While SiteMinder is one of the newer companies in the sector, we are firmly established and have evolved with smart, sleek, simple technology, keeping the hotel user in mind always.