Hotel Electronic Distribution in China: Is the Status Quo Acceptable?

Transcription

1 Hotel Electronic Distribution in China: Is the Status Quo Acceptable? HEDNA May 15 th, 2014 Shanghai

2 Agenda The changing game of hotel distribution in China Evolution of the distribution landscape Marketplace growth and globalization Distribution challenges Chinese travelers preferences are challenging long-standing status quo of established distribution standards and systems Time for change Establishing the China Organizational Group of HEDNA 2

3 Hotel distribution used to be straightforward Voice / Call Center Property Direct GDS (Global Distribution Systems) 3

4 Hotel distribution has become much more complex Voice Property Direct Mobile GDS Plan & Review Sites Brand.com Social Media OTAs Meta Search Opaque Sites Search Local Search 4

5 Boundaries have started to blur Hotel Direct Sales Group Meeting Intermediaries TMCs entering group space Consortia Wholesalers going online Meta-search Online Travel Agencies TMCs Independent Travel Agents Wholesalers Wholesalers Tour Operators Brand.com & Voice OTAs entering TMC space 5

6 Transparency exposes the lack of distribution control Hotel For this hotel, the same room type is being sold at different rates through different channels 6

7 China s tourism has been growing over the years CHINA S OUTBOUND TOURISM Grew about 10 times from Year (unit: million border-crossings) CHINA S DOMESTIC TOURISM Grew about 4 times from Year (unit: domestic air travelers per day) est. Major Outbound Destinations China Domestic Hotel Supply (August 2013) Pipeline 13% Existing 84% Recently opened 3% 2012 Jul-Aug 2013 Jul-Aug Sources: China Outbound Tourism Research Institute (COTRI); China Tourism Academy (CTA); US-China Institute, University of Southern California; STR Global; PR Newswire 7

8 What does that mean for hoteliers? Domestic Hotels International Chains China China Leverage domestic distributors to capture the domestic travel market Leverage international distributors to grow inbound business Leverage domestic distributors to capture domestic and outbound travel markets Leverage international distributors to grow inbound business 8

9 What does that mean for distributors? Domestic Distributors International Distributors China China The need to access domestic hotel supply in an electronic and automated fashion to scalably support their growing domestic business The need to access overseas hotel inventory to capture the flourishing outbound travel market The need to access domestic hotel inventory to capture the domestic and inbound travel markets 9

10 Chinese/Western travelers preferences are different Language Preferences Guarantee Requirements Payment Methods What is the DIFFERENCE? Chinese consumers typically prefer Chinese interface/content It is not customary for Chinese guests to guarantee a booking Credit cards are getting popular, but other payment methods are in widespread use, e.g. Alipay, WeChat Payment, etc. What does that MEAN? The need for hoteliers to serve Chinese hotel content for both domestic and overseas hotels The need for hotel chains to support nonguaranteed bookings The need for hoteliers to support multiple payment methods Non-traditional Channels The need to comply with channelspecific requirements, e.g. Taobao s open platform APIs and escrow payment method Possible need for different connectivity protocols, rate types, promotional structures, etc. 10

11 Hoteliers are seeing the following distribution challenges HOTELIERS CHALLENGES Content and Images Inventory Connectivity Protocols Security Systems How to distribute text content (Chinese/other languages) and images to multiple domestic/international distributors in an efficient and scalable way? How to entrench the single inventory multiple channels principle? Connecting CRS with all channels, e.g. OTAs, wholesalers, etc. Domestic distribution landscape is dynamic with players fast-changing, need a flexible and scalable solution to connect to new players Lack of standardized protocols / technologies domestically, e.g. How to support local customer preferences, e.g. non-guaranteed bookings? How to support local payment methods, e.g. Alipay, WeChat Payment, etc.? How to keep data (e.g. credit card data, personal data) secure as it travels across multiple platforms for a booking? Larger hotel chains rate types and rules are typically more complex than those of independent hotels, putting pressure on distributors systems Data freshness/accuracy issue and performance issue 11

12 Distributors are seeing the following distribution challenges DISTRIBUTORS CHALLENGES Content and Images Inventory Parity Connectivity Security Systems How to obtain hotel content in Chinese as well as images with Chinese captions? How to obtain rates and inventory for domestic/overseas hotels in an efficient and scalable fashion? How to ensure rate and product parity with competitors? Need a scalable solution to execute Chinese-market-specific rules through complex interfaces (guarantee methods, payment methods, etc.) How to keep data (e.g. credit card data, personal data) secure as it travels across multiple platforms for a booking? Larger hotel chains rate types and rules are typically more complex than those of independent hotels, putting pressure on distributors systems Data freshness/accuracy issue and performance issue 12

13 The way forward We are all in the same boat The above distribution challenges are common to all parties involved The best way forward To improve upon the status quo and address these challenges through greater collaboration between hoteliers, distribution channels, and technology providers Hoteliers Collaboration Distributors Technology Providers 13

14 Time for Change: HEDNA in China Hoteliers HEDNA China Organizational Group Distributors Technology Providers White Papers and Resources (selected ones available in Chinese) Enables Chinese hoteliers, distributors and technology providers to collaborate, work and learn together to: more efficiently distribute to domestic customers more easily connect to and distribute through international channels Conferences, Forums and Webinars No cost HEDNA University (educational program) 14

15 HEDNA: What is it? HEDNA is the global forum to advance hospitality distribution through collaboration and knowledge sharing Optimizing the use of current and emerging technologies HEDNA meets its objectives through various ways Providing an opportunity for an open exchange of information among members Influencing development of current and emerging electronic distribution channels Offering industry members professional development opportunities 15

16 HEDNA: Overview Not-for-profit trade association founded in 1991 Brings all segments of the industry together to improve electronic distribution systems and services Worldwide membership includes the most influential companies in the hotel distribution industry 16

17 HEDNA: Why should you get involved? HEDNA is the only global forum where the industry works collaboratively to overcome common challenges Gives your company a seat at the table to influence future developments in electronic distribution Take advantage of extraordinary networking opportunities with the right people Gain access to extensive educational resources 17

18 Thank you! No cost No cost 18