The hotel technology landscape
Marieke Wisse
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The hundreds of technical tools, different channel managers and property management systems in hotel tech are overwhelming. What are the advantages and disadvantages of each? Who are the big players? What do you need to know, and why? Erik Muñoz (Vertical Booking) explains the ins and outs.
1. Mr Muñoz, how would you explain the complicated hotel distribution landscape?
The easiest way to understand the distribution landscape is to think about “where do you go to find a hotel?” Most people go onto Google. On Google you might end up on booking.com or you might end up at Airbnb or Trivago, right? That is really the simplest way to explain distribution. There are many players and even more different platforms, but it’s just distribution. You either book directly with the hotel or indirect via a third party.
2. Why is a PMS system the heart of a hotel?
The PMS (Property Management System) is the heart of the hotel because it is the main operations system. It’s not only used for checking-in and checking-out. The PMS system ensures that all departments in the hotel know how to look after their guests. From who the guest is and where they come from, to their expenditure in the hotel. The PMS system is the heart of any hotel’s operation.
3. What’s the difference between Channel Managers and Central Reservation Systems?
Basically, there’s no difference in terms of the distribution function. The CM (Channel Manager) and the CRS (Central Reservation Systems) both do the same distribution wise, but distribution is all a CM can do. However, the CRS has far more functions and functionality. Essentially, there are 5 core pillars to a CRS; 1. The booking engine for direct hotel bookings, 2. The GDS (Global Distribution System) for corporate business, 3. The CM for distribution, 4. Meta for the connection to Google, Kayak, Tripadvisor (...) and most importantly, 5. Offline bookings (direct bookings via phone). A Channel manager doesn't have these extra functions, it will distribute, but it’s not a CRS by any means.
4. So what’s the difference between an OTA and a CRS?
The CRS (Central Reservation Systems) is a software system which hoteliers use for their online marketing and distribution. An OTA (Online Travel Agency) on the other hand, is essentially a travel agent - an online booking engine.
5. Do you consider Airbnb as one of the main competitors to traditional OTA’s?
Airbnb is becoming a bigger competitor in the OTA market duopoly (Expedia and Booking.com). This is good for hoteliers because commission on OTA bookings will decrease due to increased market competition in the OTA landscape.
6. Where do you think OTA’s will be in 5 years?
I think they will become more integrated to all the needs and wants of customers. So not only hotels but also car rental, flights, restaurants, tours and activities. The big OTAs will start to offer more, and will move towards becoming a PMS system, ideally replacing the PMS system altogether. That’s my prediction anyway.
