Transcript Hotel Global Distribution Systems and Channels

Hotel Global
Distribution Systems
and Channels
Chapter 8
Technology Strategies for the Hospitality Industry
Nyheim, McFadden, & Connolly
© 2005 Pearson Education, Inc
Upper Saddle River, New Jersey 07458
Interview
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Doug Anderson
Hotel Analyst
Hotwire.com
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Understanding and uniting different distribution
channels is key
More and more entities are selling hotel rooms
The Internet is giving the consumer more options
Hotels are facing brand integrity and rate integrity
issues
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Technology Strategies for the Hospitality Industry
Nyheim, McFadden, & Connolly
© 2005 Pearson Education, Inc
Upper Saddle River, New Jersey 07458
1. Introduction
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Tradeoffs between reach, richness, and
effectiveness or conversion
Right product in the right place at the right time
at the right price and under the right set of
conditions or circumstances
Objectives
 The
ability to easily and quickly search for products
and services
 Means to conduct the transaction with immediate
confirmation
Technology Strategies for the Hospitality Industry
Nyheim, McFadden, & Connolly
© 2005 Pearson Education, Inc
Upper Saddle River, New Jersey 07458
Requirements
Clear strategy
 Dedicated resources
 Effective management
 Sound information technology
infrastructure
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Technology Strategies for the Hospitality Industry
Nyheim, McFadden, & Connolly
© 2005 Pearson Education, Inc
Upper Saddle River, New Jersey 07458
Outcomes
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Access to new customers
Better and faster service
Sophisticated rate and inventory management
Economies of scale
Reduced overhead
Lower transaction costs
Enhanced buyer and supplier relationships
Cross-selling and up-selling
Unique capabilities
Superior channel performance
Technology Strategies for the Hospitality Industry
Nyheim, McFadden, & Connolly
© 2005 Pearson Education, Inc
Upper Saddle River, New Jersey 07458
Complexity
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Technological prowess
Complicated business logic and rules
Numerous interfaces to connect heterogeneous
systems (within and outside the company)
Volume of transactions and processing speed
Uniqueness of room inventory and attributes
Individual guest needs
The sophistication of the underlying database
and search engines that power it
Technology Strategies for the Hospitality Industry
Nyheim, McFadden, & Connolly
© 2005 Pearson Education, Inc
Upper Saddle River, New Jersey 07458
2. Importance
Strategic
Strategic
Positioning
Revenue Generation
Information Dissemination
Data Repository
Inventory Control and Rate Management
Utility/Transaction Based
Technology Strategies for the Hospitality Industry
Nyheim, McFadden, & Connolly
© 2005 Pearson Education, Inc
Upper Saddle River, New Jersey 07458
3. Developing a Distribution
Channel Strategy
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Transaction Processing
Customer Information Capture
Data, Information, and Knowledge
Management
Relationship Management
Demand (Revenue/Yield) Management
Strategic Alliances
Brand Management
Technology Strategies for the Hospitality Industry
Nyheim, McFadden, & Connolly
© 2005 Pearson Education, Inc
Upper Saddle River, New Jersey 07458
3. Developing a Distribution
Channel Strategy (cont.)
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Supply Chain/Channel Management
Franchisee/Owner Relations
Capacity Planning
Systems Integration
Speed
Agility and Flexibility
Electronic Commerce
Technology Strategies for the Hospitality Industry
Nyheim, McFadden, & Connolly
© 2005 Pearson Education, Inc
Upper Saddle River, New Jersey 07458
Electronic “Shelf Space”
Criteria
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The new distribution channel is more cost-effective than
other channels and can shift enough volume to recoup the
initial investment.
The new distribution channel attracts untapped markets and
generates new demand.
Difficulty
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The degree to which a channel influences the booking
decision.
Additional Criteria
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See Figure 8-3: Page 165
Technology Strategies for the Hospitality Industry
Nyheim, McFadden, & Connolly
© 2005 Pearson Education, Inc
Upper Saddle River, New Jersey 07458
Cost Implications
“Have” vs. “Have-Nots”
 Costs can represent 20% to 30% or more
of a hotel’s daily room rate
 Yield by Distribution Channel
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Technology Strategies for the Hospitality Industry
Nyheim, McFadden, & Connolly
© 2005 Pearson Education, Inc
Upper Saddle River, New Jersey 07458
Share of Distribution
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Quality and their linkages to GDS
Ability to capture information regarding its impact
Redundant vs. Complementary
Look-to-Book Ratio
Channel usage can vary by:
 market
segment
 accommodations needed
 purpose of travel
 comfort level
Technology Strategies for the Hospitality Industry
Nyheim, McFadden, & Connolly
© 2005 Pearson Education, Inc
Upper Saddle River, New Jersey 07458
Loss of Control
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Inadequate GDS technology infrastructure
Inventory and rate management issues
Commissions and transaction fees eroding profit
margins
Rise in number of electronic intermediaries
Shift in balance of power from supplier to
customer
New models of distribution and pricing
Accelerated rates of change
Relinquished control of the customer relationship
Technology Strategies for the Hospitality Industry
Nyheim, McFadden, & Connolly
© 2005 Pearson Education, Inc
Upper Saddle River, New Jersey 07458
4. Trends
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Disintermediation and Reintermediation
 “Cybermediaries”
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Digital Divide
 “Know-how”
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Transparency
Bypassing Airline GDS
Lowering Distribution Costs
 Internet
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vs. “Know-not”
and Technology Advances
Shopping Bots
Technology Strategies for the Hospitality Industry
Nyheim, McFadden, & Connolly
© 2005 Pearson Education, Inc
Upper Saddle River, New Jersey 07458
5. Summary
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GDS one of the most important “strategic”
applications in Hotel Technology
GDS in transition
More distribution options available
Comprehensive Distribution Strategy needed
Additional Resources:
www.contextmag.com -online magazine
www.corporateinformation.com -research portal
Technology Strategies for the Hospitality Industry
Nyheim, McFadden, & Connolly
© 2005 Pearson Education, Inc
Upper Saddle River, New Jersey 07458