A long, long time ago in a galaxy far away, I dreamt of being a hotelier. In fact, I recall asking a general manager if he would switch places with me for a day just so I would understand what it was like to walk around with hands behind my back and look at floors to see if there was litter or occasionally when the feeling came upon me, I’d speak to customers to ask if they were enjoying their stay.
Once (I won’t mention the hotel), I was walking with a general manager of a newly-opened property and a rat scurried across the lobby. I was impressed by his poise. I, on the other hand, screeched. He shrugged, took out a little note pad and wrote something down.
Today obviously a general manager does more than that – from what I understand, he files a lot of reports, looks at a lot of reports (daily reputation scores, competitive data) and reports a lot to the owner who’s always asking questions like “why are you paying so much money to the OTAs” or “what am I paying your brand a management fee for?” Occasionally, he might be asked by the owner’s wife or son or daughter or their in-laws to cut back on fresh flowers.
Today, having attended many hotel conferences, sat in on them and spoken at them, I am happy to be what I am and not a hotelier, especially in sales, distribution and marketing.
This is the space that’s changed the most – it’s been upended actually – and it’s hard to keep up with the news alone, let alone acquire the skills and change thinking to cope with this new, crazy environment where general managers scream at you because they are being screamed at by the owners who are screaming at the corporate office – it’s like you’re at the bottom of the scream funnel.
Shangri-La Boracay: The disruption in hospitality operations and distribution is only just beginning. Photo credit: Shangri-La Hotels & Resorts
I think the screaming has always happened, my hunch is it’s getting louder because of all the tech disruption taking place in hospitality and watch out, it’s only the beginning. Disruption is happening not only in distribution but in operations.
This week alone came two pieces of news that should make hoteliers sit up for what they signify.
Expedia led a $9.5 million Series A round (chump change to the giant OTA) to invest in New York City-based ALICE, a hospitality operations platform that is touted to be an all-in-one solution that allows hotels to improve front and back of the house operations and communication. ALICE is likened to a Salesforce or a CRM platform for hotels. 
At the Expedia Partner Conference in Las Vegas, John Kim, chief product officer of Expedia Inc, was all over ALICE. He said, “The team at ALICE is obsessed with every operational detail associated with running a hotel. Their software solves major hotelier operational pain points and it’s easy to see how they are able to save hoteliers money and man-hours. ALICE puts the entire hotel operating system into the palm of a consumer’s hands through their own devices. I believe every hotel that engages with them will be ecstatic.”
Sashou: Helping to fill that grey area with technology.
According to this article, co-founder and president, Alex Shashou, said the concept for ALICE came to fruition as he was traveling around Asia with co-founder Justin Effron. They had issues checking in, unable to do so through a mobile app.
Through their platform a guest can use the app or text the hotel to see if their room is ready to be checked into, and when they arrive continue their conversation in-person. For the hotel, the entire conversation is visible to anyone with access, making it easier to know what the guest needs prior to them even stepping foot into the lobby.
“Hotels are really good at knowing about you before you arrive, and a really good understanding of you when you leave (reviews, etc.),” said Shashou. “When you are with them it’s a gray area. ALICE helps fill that gray area with technology, an additional connection to your guests.”
Remember what David Bowie said about the grey area in this article? “A piece of work is not finished until the audience comes to it and add their own interpretation and what that piece of art is about is the grey space in the middle. That grey space is what the 21st century is all about,” said Bowie.
There was also news that SiteMinder had partnered with priceline.com to offer hotels an advanced way of distributing their inventory online. The partnership integrates priceline.com into SiteMinder’s Channel Manager, providing hotels a new way to reach travellers making their hotel reservations through priceline.com’s apps or mobile web.
This is clearly aimed at winning over the independent hotel market which everyone is going after. According to Phocuswright and h2c’s Independent Lodging Market Report, co-sponsored by SiteMinder, less than 40% of Europe’s independent properties use a channel manager while in the US, independent lodging operators say they acknowledge the importance of effective distribution but lack the ability, systems, budget and time to exploit the opportunities.
There’s another area that’s becoming greyer in another sense – the blurring of wholesale rates and online rates. It’s always been a contentious point but wholesale players are now embracing BAR pricing as well and hotels are having to manage this transition.
Andrew Hughes, vice president, hotel sourcing, APMEA for GTA, said in order to support the evolving landscape, the company is actively embracing BAR pricing and has invested in technology to make that happen. “We are helping hotels operate with BAR in the B2B space.”
Said one hotelier, “Consumers like (wholesale companies) because they sell “lowest rates” which are supposed to be wholesale rates but they publish online. Hotels, on the other hand, are quite upset about them as even on their own websites, they are not allowed to sell wholesale rates.
“I think for wholesalers like Hotelbeds and GTA, they need to do what Expedia has done – diversify from their traditional business model and move to become a travel ‘platform’ offering B2B, B2C and B2B2C.”
So now everyone’s predicting consolidation in the B2B wholesale space as well. Suppliers have the wherewithal to pick and choose the distributors they wish to work with and this is a game about scale. “If you can’t win them, buy them,” said the hotelier.
There’s speculation that the acquisition of Kuoni, which owns GTA, is imminent and TUI has said it wants to sell its Hotelbeds business.
Now imagine if someone bought these two businesses and merged them? Hey, anything is possible today in hotel wonderland where even ALICE has come out to play.
Note: WIT’s first Hospitality conference will take place in Hong Kong March 22. Check out programme here. Book tickets here.
