No, it’s not “Close encounters of the third kind” or even ET, although that could stand for Even (more) Trouble.
Just when you thought it safe to go out again, you may have noticed a few news releases that would give you a flavour of what may be on the horizon for managers and owners, where more and more of that specialist space is being compromised by big business.
Expedia, Airbnb & Booking.com are expanding tools for managers
One of the frustrating elements of the hospitality business for OTAs is clever pricing manipulation through smart channel managers and PMS systems. With price parity virtually outlawed, the % or fee application tools in these systems are used creatively to modify in-season pricing and build the billboard effect. What’s the answer? Provide the hotel with software, gain control and even more data. Expedia led a $26m investment in Alice a hotel system evolving to manage a hotel’s full back-end system.
Airbnb, one never shy on news, has announced their API, which is a positive step but also announced advanced “Host Tools”. The question is, how long before a $30bn company has a full complement of tools AND allows external channel distribution. It’s a win if you book with us and a win if you don’t.
Just following this thread of management at the data entry and “source of truth” level some companies have been in the space for a while:-
“Web Direct” by Bookingsuite which has been around for a while from Booking.com provides a web and booking solution. Expect to hear from them on this. They removed SEM support early 2016 and were very focused on rate management.
Escapia was a 2010 acquisition by HomeAway and is firmly entrenched in the VR space and one of the first. How does this tie into the Expedia approach to entering the actual hotel data management space?
This does not bode well for small PMS systems in the future if all management tools are part of the booking fee and OTA’s dominate. Judgement calls needed!
Getting in on ground level: Airbnb may buy Wyndham (with over 110,000 properties)
We have seen Accor hotels and others start investing in businesses such as OneFineStay and Squarebreak etc. but more recently the Airbnb wave has begun to seek full control and is gaining experience. First, it was Luxuryretreats.com and then the news that they have teamed up with Newgard Development Group for a 300 unit rental complex in Kissimmee to trial the approach.
Just today we see announced that Airbnb is in the running to buy the Wyndham European Group of VR properties (110,000). This collection of managed properties, even as a consideration of acquisition by an e-comm marketplace should set the alarm bells ringing for many managers. Or perhaps opens the doors to greater opportunity as a potential acquisition themselves! The market is rich in these transactions recently and more consolidation will occur.
Perhaps being in the actual property business will also see fewer headaches than those currently keeping armies of lawyers busy and the real danger of a major clampdown on subletting in the US.
The entire pie?
So what happens when you own the marketplaces, the inventory contracts, the tech to run it all and have a strong brand? I think we all know the answer!
Food for thought (oh yes! They own those outlets too).