The Technological Considerations of Channel Management Automation

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October 01, 2008
Hotel | Channel Management
Valyn Perini - valyn.perini@opentravel.org

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© 2008 Hospitality Upgrade. No reproduction without written permission.

Recent issues of Hospitality Upgrade have included several articles that cover the business realities of distributing content and inventory to the thousands of electronic channels in today’s travel marketplace.  This article will address the technical impact of implementing a channel management tool to automate the updating of inventory in the various channels with which a hotel or hotel company does business.

In the context of this article, automated and real-time channel management does not include data entry into an extranet provided by a distributor.  While better than fax or e-mail as an inventory status communication method, extranet management is neither real time nor automated.


So it’s finally happened–your revenue management team has gone on strike, protesting the 48 distribution channels they have to manually update 193 times a day, and your GM or CEO has suggested that technology should be able to solve the problem.  You are somewhat aware of the companies that offer channel management automation, but need a better understanding of what to look for.  The following is a list of basic questions you can use to get started in the search for a solution.

What are my options? As with any other application in use at a hotel, there are several ways to approach this technology.  The first question is buy or build.  There are companies in the market that will build middleware from scratch or customize an existing product.  There are also several off-the-shelf providers of channel management automation, and those solutions can be installed on location or be hosted by a third party, and there are several options that are only ASP based.  Most off-the-shelf CRS providers offer a channel management component, and some revenue management providers offer the same.  Search for companies using the key words channel management, electronic distribution or distribution services and you’ll find plenty of possible providers.

Which application does the channel management tool connect? This is probably the easiest question to answer. Use the application where the full picture of availability, rates, inventory (ARI) and rules are stored, whatever application the revenue management tool uses to determine pricing and availability.  Generally, the CRS will be the preferred inventory application.

What’s the difference between scraping, pushing and pulling? There are several methods that can be used to get your hotel’s information to the various distribution channels, and all have positives and negatives. 

Screen scraping or data emulation was the first electronic method of inventory updating.  In this scenario, the channel management tool populates a channel’s extranet by mimicking data entry the way a human would enter data.  The positives–it’s cheap and quick to market.  The negatives–the scrape program must change if the interface changes, something you as the user may not be notified about right away, data recognition can be spotty, and the speed of update is only as fast as the user interface allows.  If it takes 10 screens to update one year’s worth of ARI, it will require 10 screen loads and saves for the scrape to complete its task.  Finally, the screen scrape is limited to what the channel can support.  The inventory application (CRS or PMS) may support full pattern length of stay, dates closed to departure or other sophisticated selling controls, but if the channel does not support those same restrictions, functionality will be lost. 

The push model of messaging (sometimes called a push interface or a replicational interface) is supported by many established online distribution channels, and is widely considered to be a more robust and sustainable mode of connectivity than scraping.  To be able to support this method of communication, the inventory application should have the ability to recognize changes in its ARI and be able to create messages (delta data or full data) that can be pushed to the channel.  Trading partners write to an API, and generally the channel caches supplier data, which can protect the hotel’s inventory application from large volumes of inquiries.  The downside of the push model is, like scraping, the channel will probably not support the more sophisticated selling controls in place in the inventory application.

The last method of connectivity, the pull or transactional model, is the one which provides the most accurate results to the end user but which puts the most strain on the hotel’s inventory application.  In this method, the channel makes a request and the supplier responds to that specific request, again by using an agreed upon API.  This method makes the best use of revenue management decision data, provides the exact information the booker is looking for, and eliminates the opportunity for inadvertent overbooking, but look-to-book ratios can be as high (or higher) as 3,000 to 1, especially from the large online travel agencies and the meta-search engines.  To be successful using the pull model, the inventory application must be able to withstand these huge volumes of incoming inquiry requests.

Another version of the pull model is called the real-time pull model or real-time cache (an oxymoron if I ever heard one).  In this model, the cache data is used for availability, but at the time of booking, the channel sends a real-time availability request to the inventory application to verify the data in the cache. 

What messaging languages are used (and what about my legacy CRS/PMS)? Messaging languages can range from EDIFACT (used by some of the GDSs) to ASCII Message Format (AMF) files, flat files and XML.  XML is the most widely used messaging language today, given its readability and programming flexibility.  In the case of legacy inventory applications, most hotel companies with them have elected to create one or more modular services that shield the application from the vagaries of today’s electronic distribution requirements.  The modules or adapters are cheaper to build or buy than replacing the entire inventory application, but can have their own considerable programming costs.

What standards exist to make these multiple connections easier, and who uses them? The value of proprietary interface protocols and message formats is almost always biased to the owner of that API, but there are some organizations in the travel industry trying to address this issue.  The primary distribution standards body in the travel industry is the OpenTravel Alliance, and its members (made up of hotel companies, technology providers and distributors) have worked together to create XML-based message sets that address the business needs of electronic distribution, including search, availability, pricing, content, reservation, modification and cancellation.  Every GDS, switch and major online travel agency uses OpenTravel messages. HTNG also has distribution-related work groups that have built or are building usage profiles for some distribution functions using OpenTravel messages.

However, the need to accommodate varying business practices on both sides of the trading partner divide means that a standard plug-n-play interface is still not quite within the industry’s reach; schema reflect business practices, but cannot dictate them.

So I’ve signed the contract.  Now what do I have to do? Depending upon the technical sophistication of the channel management automation, the effort of setting up and certifying a new channel or product will vary greatly. More advanced solutions will support automated processes that handle the bulk uploading of property, product and inventory information and be able to automatically initialize the availability status ready for live.  There is usually a level of manual effort involved in the process, including items like mapping so rooms and rates data exchanged flows to the appropriate locations.  What you definitely don’t want is to have to load all property, product and inventory information manually via an extranet property by property, because the distributor has no automated way of importing the data into their systems.  Ongoing maintenance of any automation should always be a question in your top 10 list, especially if your company has dozens of electronic trading partners.

The online travel horizon, while not unlimited, stretches far, and your hotel will need the ability to support distribution of inventory to many channels for the foreseeable future.  Customers are becoming more sophisticated in their online shopping habits, and business success will depend on providing content and inventory quickly and accurately to the appropriate channels for your hotel.  Channel management automation could give your organization the competitive advantage it needs, provided the right questions are asked at the beginning.

Valyn Perini is the executive director of the OpenTravel Alliance, and can be reached at valyn.perini@opentravel.org.  She would like to acknowledge contributions to this article by SynXis and HBSi.

Sidebar:

The Golden Tulip Hospitality Group is based in Lausanne, Switzerland and franchises and manages 780 hotels with more than 75,000 rooms in more than 50 countries.

“We aim to achieve a single image inventory that’s reflected both in the PMS and the CRS," said Riko van Santen, SVP of electronic distribution and IT. "Properties that utilize interface facilities have an efficient synchronization between the two platforms, often assisted by revenue management systems. If you want to yield and manage pricing correctly, you need to make sure that the right price gets to all the right markets efficiently. Also for rate and inventory parity, our hotels manage our CRS to distribute this effectively.”

How many channels does an average hotel use to distribute its inventory? It depends on what you consider a channel. If each Web site or travel agent would be considered a channel, then we are talking hundreds of thousands, if not millions. Remember several Internet portals feed various sub portals, so by connecting to one new Internet partner could add 20 to 100 new Web sites where your property is offering its availability. “From a technical perspective we can divide the channels into four categories: CRO, GDS, Brand.com, and third-party Internet," said van Santen.

Does Golden Tulip use direct connects? Yes. Van Santen said, “In some cases we choose together with distribution partners to build direct connects. This we choose to overcome the manual work hotels would otherwise have to maintain rates and availability on one hand, and to process and consolidate reservations data on the other. We have our own XML white paper we use to connect our CRS to partner Web sites and portals, but also use rate and inventory automation tools where we have not yet achieved direct connectivity.”

When selecting its channel management partner Golden Tulip looked for the following technology characteristics. “Ideally such systems should be fully two-way, so also consolidating incoming reservations and processing commissions centrally. That way you really manage your channels, by having end-to-end automation. The problem is that if this does not connect to your central systems, then hotels are still going to have manual intervention, guests will still have different confirmation numbers, agents will still have delays in commission payments. It’s therefore crucial that the industry players all work using industry standards which have also come a long way in the recent years,” van Santen said.

There are differences in the ways various companies operate and work with hotel inventory and availability. “It’s always a challenge to balance standard practices and customized work. How many ways can you interpret room types, occupancy, taxes, and meal plans?”

By automating the full process the electronic channel management can become more effective. “We need to ensure that the full circle of transactions can be processed and automated. If we can distribute rates, availability and content to all forms of channels from one central repository, which then processes reservations, payment, and commission handling and client file data as well, we can focus more on guest service, intelligent pricing, and reducing costs,” said van Santen.



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