Travel Weekly recently went one-on-one with D-EDGE’s Asia-Pacific managing director, Christine Tan, to talk all about technology in the hotel industry.
TW: What’s the biggest challenge facing hoteliers (particularly those in Australia) right now when it comes to online distribution? How can it be overcome?
CT: The hospitality business today has transformed rapidly into a digitally-enabled industry. It used to be that travellers relied on bricks-and-mortar travel agents who booked through the GDS for their business trips or family vacations.
Today, online distribution has become increasingly sophisticated, complex and competitive. When we talk about online distribution technology, we look at how we can target the travellers who can’t do without their mobile, and we look at leveraging AI, chatbots and using data to present personalised offers to the right customer at the right time.
I feel that hotels are having a hard time keeping up or knowing what to do, and this is a global challenge, not just in Australia. In order to overcome this, hotels need to view themselves as technology companies and have long-term plans that focus on technology transformation, to adapt to their customers’ changing demands.
The other daily challenge that hotels tell me they are having headaches with is multi-sourcing from OTAs and the difficulty they face in controlling rate parity. Hotels need to monitor and control the net rates given to third parties and move to a dynamic, commissionable rate structure.
TW: What are some of the misconceptions hoteliers have about technology and its impact on the industry?
CT: I feel that many independent hoteliers tend to over-negotiate and under-invest in technology for their hotels. That is putting themselves at risk, by depending on distributors to do the work and paying high distribution costs. Hoteliers need to look at technology as a long-term investment instead of a short-term expense.
TW: In a general sense, how do you rate the relationship between hoteliers and OTAs? How can they work better together?
CT: Hoteliers already have a good relationship with OTAs – I would rate it a four out of five. However, hoteliers need to become less dependent on them and restore the balance of their direct booking revenues, versus third-party providers. By doing so, they will have better engagement with their customers and data that will lead to better profits for the hotels.
TW: What’s your one piece of advice for Aussie hoteliers looking to grow their online distribution?
CT: Don’t put all your eggs in one basket. Invest in technology and look at ways to diversify your sources of revenue. The landscape is changing – watch this space for Google, and monitor and control your rate parity. Invest in a proper CRM in order to collect information about your guests, clean the data from automatic extract from the PMS, segment your clientele, and animate your client base with relevant and targeted marketing activity.
TW: What will the hotel distribution model look like 10 years from now?
CT: No one knows for sure. One thing that is for certain, however, is that technology in the hotel system will be the heart of distribution, and the providers chosen by the hotels will need to be agile and flexible to adapt to market changes.