September 2017 Archives

Sep 25

it’s time to reexamine the data structure behind hotel distribution

For years, the hospitality industry has been struggling to upgrade its legacy systems both to meet the needs of the fast-growing field of new players and return the types of sophisticated queries consumers are increasingly demanding.

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And while those of us in the trenches of distribution continue to work diligently to meet the new challenges, I’m increasingly convinced the only real answer is to blow it all up.

Yes, it sounds radical, but it needs to be seriously considered. That’s why we, at DHISCO, are starting over by asking an important question: How can the hospitality industry structure its data so consumers and travel professionals can more easily shop for hotels and rooms with the features and amenities they want?

Today, hotel companies use thousands of unique attributes to describe their properties and rooms. Attempting to marry the search terms and the way the traveler thinks with the way the content systems across multiple legacy systems are constructed is a nightmare. For example, a swimming pool is not just a pool. How do you map, across disparate systems, the code and abbreviation for a lap pool vs. a family pool? And indoor pool vs. outdoor pool? Is it heated? Does it have salt water instead of chlorine? Then, how do you make all that information readable across the hundreds of thousands of platforms used by billions of shoppers looking for hotels with pools — every month?  It’s impossible.

Yes, we can keep developing patches and systems and custom descriptions in free-form fields to map and transform all of this content across multiple legacy systems. But I’m convinced the only real long-term solution is to change the underlying taxonomy, or data structure, and develop a universal system that everyone can understand.

In short, we need a cost-effective system that enables hotels to customize their data in a format that online travel agencies and global distribution systems can quickly and easily read and distribute across multiple platforms.

We are not doing this in a vacuum. We have been talking with some of our biggest partners about joining this effort. We are engaging thought leaders working on next-generation artificial intelligence solutions. We are considering input from across the spectrum, including rates, inventory, static and dynamic content, descriptive content and images and translated and nuanced content – all with the goal of maximum conversion to real revenue for hotels.

It won’t be easy! Look at the transformation of our health care system. It was forced to tackle this problem back in the 1990s. The need for a common data structure was critical, and the structure of a health care record was treated differently across systems and companies. It took years. But today you can go to any doctor or hospital or pharmacy in the world, and they can read the same charts the same way because they use a universal coding structure.

Changing the taxonomy of hotel data – or the way attributes are organized around the descriptive content of rooms and properties – would enable hotels to move beyond basic room types to offer what George Roukas of Hudson Crossing characterizes in a recent article as the “new, attribute-based shopping model,” or ABS.

Under this model, he says, “consumers don’t see the room type or rate plan combinations; they see a list of attributes they can put into a shopping cart to build the product they want. If Jon wants to stay at a particular hotel with his wife and they’re interested in a king bed with ocean view and a balcony, then he can specify those attributes without knowing the room type. Each time he adds an attribute to the cart, the ABS engine prices that attribute separately, and the consumer can see how each attribute affects the total price of the room.”

Roukas goes on to explain how this can increase hotel revenue, by opening up more booking options rather than searches that are filtered simply by traditional room types and rates. The result enables hotels to more accurately zero in on exactly what each customer wants.

As Roukas says, we don’t yet know how shoppers will respond to attribute-based pricing. But one thing is clear: as we move into the next era of hospitality distribution, we need a simpler, more intelligent system. And we need a system in which hotels can both collaborate and compete with the sharing economy, where rooms and home rentals are sold solely on attributes.

It begins and ends with data structure. That is a BHAG (Big Hairy Audacious Goal). We are on it.  

– CEO Toni Portmann

 

 

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Sep 05

tapping the potential of IoT

When it comes to deploying new technology, it seems that all we ever hear about is how the hospitality industry is far behind other sectors.

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So it was refreshing for me to read a recent Phocuswright report about how hotels – and the travel industry in general – are leading the way in the use of so-called Internet of Things, or IoT.

According to the report, which quotes a study by Tata Consultancy, travel, transportation and hospitality are the top three industries when ranked by IoT spend per company, as well as spending as a percentage of revenue.

I guess it makes sense, given that so much of IoT revolves around automating at-home tasks like room temperature controls, lighting and television commands. That translates well to hospitality, the report notes, and is behind the move by hotels to use voice-activated devices like Alexa and Echo to help guests more easily navigate all of their in-room controls.

“For the accommodations industry the growth of IoT represents both an opportunity to provide more self-service options to the guest and gather data on behavior, which in turn can improve efficiencies and drive greater guest satisfaction through personalized services,” the report states. “Behind the scenes, hotels and resorts are using the IoT to improve the efficiency of housekeeping and maintenance and to track hotel assets.”

In the cruise industry, we are seeing wearable IoT. Carnival, for example, has begun using a bracelet that opens travelers’ staterooms doors, controls their embarkation and disembarkation experience and acts as a payment device.

At airports, IoT sensors are being used to track baggage, even make the boarding process smoother for frequent travelers in Dubai, according to the report.

This is all great for improving the traveler experience. But what’s really intriguing are the longer-term implications and the ability to integrate this new technology into new and existing systems for tracking traveler data and actions to be able to deliver that Holy Grail of personalized services, whether that is on property or earlier on in the booking process.

After all, IoT is still in its infancy. According to International Data Corp., worldwide spending on IoT will grow 16.7 percent to just over $800 billion in 2017 and nearly double to $1.4 trillion, by 2021.

That explosion will create both promises and challenges, from cybersecurity and privacy to other issues I’m sure no one has even considered yet. And, of course, there is that same issue that dogs the industry at every turn: Figuring out how to merge all this information into legacy systems and then being able to turn it into business intelligence.

But, as the report states, this is one more technology that “hopefully … will lead to more seamless and personalized experiences benefiting both travel suppliers and travelers.”

– CEO Toni Portmann

 

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