Systems

Designating a code

Hotel sub-brands are opting for Global Distribution Systems' codes that separate from their parent brand. This will help strengthen their position and increase visibility. By Sanjeev Bhar

Hotels, for long, have been attempting to break through the clutter. On the product side, differentiation and brand rejuvenation through periodic renovations are the norm. But on the distribution side, not much was on the platter, until now. While the former gave the product an edge with the customers, any innovation in the latter directly impacts positively a hotel's visibility and standing vis-à-vis the buyers.

Hotel companies worldwide are waking up to this reality. They have realised the importance of separating the lone apple from the oranges in their arsenal. A GDS system today is the preferred mode and perhaps, the largest source for electronic business for a hotel chain. While most hotel chains are present on the GDS under the code of the parent brand, many leading chains have realised that it makes business sense to designate a separate code for the stars in their portfolio.

Stacking up statistics

TravelCLICK, a provider of emarketing solutions for the hospitality industry, conducts a quarterly analysis of electronic distribution performance using data from Amadeus, Galileo, Sabre and Worldspan GDS. For the first quarter of 2007, the data shows that worldwide, electronic hotel revenue from the GDS and key Internet sites increased 16.8 per cent over the first quarter of 2006. The number of electronic room nights booked for the first quarter increased 5.7 percent over the same time last year, while the Average Daily Rate (ADR) increased by 10.5 per cent. Online transactions on third-party websites powered by the GDS and Online Distribution Database (ODD) showed a gain of 10.7 per

cent compared to the first quarter of 2006. ADR was up 11.4 per cent for Internet bookings, and revenue was up 23.4 percent.

The key observations of the analysis are:

• Hotel bookings through electronic channels are on pace to generate more than 120 million room nights this year
• In the first quarter of 2007, luxury hotel room nights reserved through travel agents increased 15 per cent and surpassed $360 per night in ADR

It is the luxury segment that is benefiting the most from electronic channels. Given these statistics, it is obviously a natural progression for hotels to assign separate codes for their star performers -hotels in the luxury segment. Recently, Starwood Hotels & Resorts went online with a dedicated GDS code for The Luxury Collection. Similarly, Conrad Hotels & Resorts moved away from Hilton's code HH to get its own. All for a slice of online action.

Benefits galore

What are the advantages of this? Basically, keeping in mind the adage, ' Out of sight, Out of mind,' it thus brings the brand to the forefront. The prime benefit associated with a dedicated GDS code is the generation of brand awareness by bringing the code within clicking reach of the agent. It enables marketing and promotional activities to tap the travel agent market worldwide, who otherwise would have overlooked the brand in the crowded online space.

Avinash Agrawal, assistant manager, Products & Vendor Relations, Calleo Distribution Technologies (Worldspan Distributors), says, "Dedicated GDS codes provide hotels with a unique identity, similar to that of an airline. With thousands of agents accessing and making bookings on the GDS, it makes it easier for them to narrow down their hotel searches using these specific codes."

The main reason for this is that it brings a brand under an umbrella of its own. A source from Amadeus adds, "The main reason for dedicated GDS codes for hotels can be seen from the perspective of brand marketing. The primary motive is to group the hotels of a similar standard and quality, thus targeting customers under one umbrella. That means, if it is a luxury brand, it has the caché of a different and a unique code, and the main brand is not diluted by others of a relatively lower quality." Reiterating this, Agrawal says, "Another aspect to this is the fact that hotels can bring all their brands catering to a particular segment under one umbrella, which enables clarity of information."

It also enables focussed marketing efforts. A source from Amadeus says, "As part of their communication arsenal, hotels would ideally use advertising within the GDS as well to communicate and remind agencies about their new chain codes. It will increase their reach and bookings by furthering their scope through a comprehensive global network of GDS." A dedicated code also provides hotels an opportunity to center special marketing and promotional activities to tap the agent. "Dedicated brand information pages for travel agents offer mileage to a hotel brand," says a spokesperson of ITC-WelcomGroup.

Synergies and more

GDS companies also are focussing more on hotels now. According to Amadeus, technological enhancements are constantly being made in the GDS to adapt to the demands of hotel chains. This includes facilities for showcasing content (multimedia, text, descriptions, etc) and expanding search capabilities (to cater for a myriad of hotel features and prices, etc).

For domestic chains operating in agreement with international brands, there are benefits galore. The spokesperson for ITC-WelcomGroup says, "The distribution of The Luxury Collection is leveraged through multiple electronic channels which ride the GDS pipeline. The ITC-WelcomGroup and Starwood teams have developed and implemented a comprehensive marketing and communications plan that covers GDS advertising, travel trade print advertising, travel agency communication, and PR."

Starwood's new GDS code launch, LC for The Luxury Collection brand, will have a positive impact on its hotels in India. According to the spokesperson, "In India, the unique association of ITC-WelcomGroup with The Luxury Collection offers business travellers exceptional and indigenous experiences. There was a natural requirement, therefore, to align our distribution channels toward marketing and positioning this unique luxury brand both overseas and in the domestic business landscape." With more hotels realising the benefit of an individual GDS code, many will make a beeline to segregate the grain from the chaff.

With inputs from Neeti Mehra, Mumbai