With consumers now overwhelmingly booking hotel stays online, the hospitality industry is becoming increasingly dependent on the services of online travel agencies to introduce them to new markets. Hotel Management International talks to Othman Jabrane, chief technical officer at GlobRes, about how the company is succeeding in developing high-end solutions for the electronic distribution channels of major hospitality chains, and reversing this increasingly expensive pattern of dependence.
To what extent do you think technology has shaped the hospitality industry over the past few years?
Othman Jabrane: New computer devices have been the driving force in shaping consumer behaviour in recent years. Indeed, the internet is now the main reference point for travellers. Potential guests shop around at all hours on desktops or smart phones, so hotels have to be able to react quickly to short-term demand by managing their inventory in a more dynamic fashion.
Moreover, thanks to recent technological developments, rate shoppers or yield-management systems can help to define correct room rates for specific times. Channel managers are also able to issue updates on different distribution channels. However, as new tools become more readily available, many hoteliers are struggling to fully understand the ins and outs.
What impact have online travel agencies (OTAs) had on the industry, especially on hotels?
Their impact, especially in recent years, can hardly be overstated. OTAs force individual hoteliers to become more attentive to the specifics of this important distribution channel, either in terms of how they react to the impact of a price change by their hotel competitors, or to a change of the displayed consumer rating by the OTA. In some instances, OTAs have become the predominant source of reservations for many hotels. Although it has certainly made life easier for many of them, this is, in fact, simply the equivalent of outsourcing their online marketing to a third party. The downside to all of it is - as too many hoteliers have discovered to their cost - a growing dependency on one or two major OTAs. This, in turn, invariably increases the pressure on their profit margins, as the volume of commissions reaches unsustainable levels.
What solutions does GlobRes offer that specifically benefit hoteliers, and how do these stand out from those of your competitors?
We provide high-end solutions for electronic distribution channels. However, we understand that simply providing the best technology is not good enough. After all, putting someone at the helm of a Formula-One car does not guarantee that they will win the race; the quality of the driver's training is just as important.
At GlobRes, each of our clients is designated their own system and distribution advisor (SDA), who will assist them in using the tools we provide to their best advantage. The ultimate aim must always be to maximise production on the different channels. In addition, our clients can tap into our specialised departments whenever they need to. One of the most recent examples of this system in action has been our creation of a special department to coach business hotels in fully harnessing the potential of the RFPs within the hotel's area.
Individual hoteliers are increasingly recognising the importance of the internet as a way to reclaim bookings and reverse the pattern of dependence on the big OTAs. The homepage is the key to achieving this task, specifically the functionality and layout of the booking engine. It goes without saying that as many visitors as possible need to be transformed into bookers. Our technical and graphic design departments ensure that our fully responsive booking engine is perfectly integrated into the hotel website's homepage.
Of course, tools and graphic design are only one side of the coin; the other is increasing visitor traffic to the hotel websites. To address this, we have developed a special service for select hotels to drive visitors to their homepages. With this service, the hotel pays a commission on actual reservations only, resulting in lower costs than that of the usual OTA commission.