Business Travel Show Europe is the place where
September 2022, Virtual
September 29 2022, Virtual
If on nothing else, the business travel industry can agree that hotel bookings and pricings are extremely complex. David Jones, executive vice president of Amadeus, underlined the point in his keynote presentation to the conference of the Hotel Electronic Distribution Network Association (HEDNA) this week in Barcelona.There is a growing number of distribution channels both direct and indirect, Mr Jones told the delegates but overall, hotel distribution lacks efficiency and this inefficiency costs the industry money.Mr Jones seems to have been being over kind. Hotel bookings and reservations are a jungle which the inexperienced enter at their peril.Traditionally, agencies or travel management companies (TMCs) have focussed on airlines. This is where corporates spend the bulk of their travel budget and where the TMCs make their money. Hotels were and are a less controlled area of spend. Only about 60% of hotel spend goes on preferred suppliers with whom corporates have a deal. The remaining 40% is spent outside of any deals.Hubert Joly, worldwide ceo of Carlson Wagonlit Travel (CWT), has repeatedly said he wants to get more control for his clients over their hotel spend. GDSs, like Amadeus, have been playing their part by introducing improved technology and resources to bring more hotels within the ambit of the CRS.But a major problem still remains. Corporates, understandably, want the lowest prices but where do they get them? Mr Jones, calling on the recent KPMG Global Hotel Distribution Survey 2005, pointed out that there was a large variation in prices across channels. Globally it is 30% and in the UK, the worst case, 38%.The KPMG survey suggested the channel most likely to come up with the lowest price was the online agencies (in 36% of cases) but recent research by CWT suggested it, CWT was the best bet to get the cheapest or joint cheapest deal (70%).But the results of both researches also suggest something else: that hotels, including those which adopted a best price guarantee, still do not give customers the lowest deal. KMPG found that hotel websites were best in only 19% of cases while CWT found them best in 18% of cases.A further point about this uncertainty of where to get the best price is that it can invalidate corporate deals with hotels. Why should corporates sign a deal if they feel they can get better rates going through another channel? Hotels still seem to have a long way to go before they fully control their prices and manage their rates effectively. But this, as Mr Jones suggested in Barcelona, must be the way forward.His solution was a “true single image repository of rates and availability” which would create a real time external system and be accessible by all channels.Customer profiles could be built into this database so that hotels would know and acknowledge their frequent guests. KMPG's research suggests they often do not.It was, Mr Jones imaginatively suggested, just like the airlines do it. If airlines, aided by advanced technology, can effectively and efficiently manage the three stages or processes of a flight, why can not hotel chains manage just as easily a stay at one of their properties.Mr Jones said there were clear similarities between a flight and a stay at a hotel: the inventory, that is what is available, the reservation of the seat or the room and the check-in for the flight and the check-in and check-out for the hotel.Amadeus, for one, has produced and tested technology which can handle this for a flight so there seems to be no reason why similar technology can not be introduced for hotel bookings.It would end the current confusion and likely save a lot of time and money searching the web to find the best rates.