By Andy Keeley
Before the pandemic, tour operators, online travel agents (OTAs) and wholesalers were increasingly linking to hotels via direct, dynamic connections such as channel managers and switches rather than securing negotiated contracts with individual properties (Report: Making sense of hotel sourcing and selling).
This was, predominantly, initiated by the hotelier as they utilised new technologies and looked to reduce the complexity of managing direct agreements.
From direct contracting to direct connecting
The current climate has led to an acceleration of this trend as both the demand and supply of this type of dynamic agreement has increased.
Firstly, both the travel companies and the hotels may no longer have the resources to load, manage and maintain a complex relationship, when many staff have been put on furlough or made redundant.
Direct contracting can be labour intensive from both the point of loading and ongoing maintenance as new rates and offers are released. If you need to consider multiple markets, brands and channels then the effort increases proportionately.
“Channel managers and switches have the technology to connect travel companies to hotels accessing similar product and commercials but with less resource and effort, whilst allowing them to retain the direct relationship with the hoteliers.”
– Andy Keeley, Commercial Director at intuitive
Secondly, tour operators, OTAs and wholesalers look to be more flexible and have had to react quickly to changing conditions. As the current situation is ever evolving, they will almost certainly have to make strategic decisions around destinations and hotels chains.
Channel managers and switches can link to relevant properties in available countries quickly and efficiently giving the travel companies the flexibility they need.
This trend is likely to continue as travel companies look at how they can help drive efficiencies, increase productivity and reduce operational costs.
Best of breed approach for hotel sourcing
Direct contracting still has a role to play, particularly for travel companies who have a smaller portfolio or where they drive high volume to a selection of properties. Being able to negotiate bespoke agreements that match the operator’s demographic and that work for the hotel can unlock genuine value for all parties.
The necessary simplification of a channel manager connection will not offer such possibilities.
In reality, most travel companies will adopt a mixed approach between bespoke direct contracts, channel manager sourced dynamic rates and product via B2B wholesalers. In some cases the route will be imposed upon them by the hotel, but it will also be based on time, resource, value and control.
Those operators who simplify and streamline via technology will be putting themselves in the best position to navigate this changing landscape.
intuitive is the provider of the leading travel technology systems for tour operators, online travel agents and wholesalers. Our iVectorRooms product can integrate with your existing reservation system to deliver a specialist solution to this area of your business.
For more information contact 020 3355 2200 or email firstname.lastname@example.org
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