Choosing a Hotel / Accommodation Online Booking & Distribution System

Interested in online bookings and distribution systems and what they can do for your tourism business? Or have you started using different booking outlets on the web, but find yourself spending too much time updating inventory to keep up as bookings are made?

Have you been looking at the TXA or ATDW, V3/frontdesk, Levart, Channel Manager, SiteMinder, the Booking Button, RMS Online or another online booking and distribution provider?

We work with a variety of tourism operators, and notice an increasing number of questions about the different systems and what they do. We don’t prefer one system over another, but help operators connect their website to whatever booking and distribution system they want to use.

Maybe you aren’t using an online booking and distribution system at all. Or maybe you have started using one, but are not sure if you should be looking at others. Perhaps you are one of the many tourism operators using multiple distribution outlets but are stuck with manually updating inventory.

Depending on your own decision making style, you might decide to:

1. Jump In: Speak to some colleagues and listen to their views, decide if a change is required and if so jump in!
2. Look First: Do your own homework about what is available and how it fits your business, then decide.
3. Sit Back: Sit on the fence until it all gets easier to understand!

Option 1 Jump In suits some and not others. Time spent analysing options is time not spent finding new visitors. There are risks in making a rapid decision, but maybe also some benefits. Not for everyone.

Option 2 Look First sounds harder, why bother? Well, if one or more of these issues concern you enough, you may prefer to look first before jumping:

• One off setup fees.
• Ongoing monthly fixed and/or % fees that can cost anywhere up to 6% of each booking.
• Credit card fees.
• Commissions involved in online distribution that can slice from 2-3% up to 30% of each of your bookings.
• Lock in periods that can incur break costs for cancelling a contract early.
• Varying degrees of support for popular distribution sites like Wotif.

Option 3 Sit Back sound good after all that? Maybe. But these systems can save you time managing your business day to day. They can make bookings from your own website easy. And they can help you get more bookings from 3rd party websites. If you don’t participate and learn about the new systems, you might be losing out to those who are.

How hard can it be to make an informed decision?

If you want to do your homework for Option 2, we have come up with some questions that might help you.

If you have been approached by representatives of online bookings and distribution systems, go back to them and ask them these questions. Or get in touch with them directly. After you get the answers back, grab a bottle of something chilled and start sifting through them.

One factor to keep in mind is that there are a lot more solutions for accommodation providers than tour operators. If you only do tours, there are other options you may want to consider (and that is the subject of another article).

We recommend you try to do an ‘apples to apples’ comparison between providers. What do you get? What does it cost?

Be sure to think about and incorporate any unique considerations for your business as well. Each solution is unique, as is each tourism operation. And get appropriate advice if you need it, don’t just rely on this article.

If you aren’t already familiar with them, links to several solution providers are provided towards the end of this article.

So here are the questions. Tourism operators, you are welcome to copy them and update to suit your own purposes to get pricing from solution providers. Private communications are fine, but no republishing please.

Online Booking and Distribution – Questionnaire for Providers

Part 1: Business Scenario

Provide a bit of background about your tourism operation and what you do. Helping a provider understand what you do helps you get more relevant answers. Make sure you highlight any parts of your business that are non standard, special or particularly important to you.

We recommend you come up with guesstimates in some areas that will let providers give you costings for a standard scenario. The figures don’t have to be exact, just suitable for you to make an assessment.

Using the same scenario/figures with each provider helps you do an ‘apples to apples’ comparison. This is a lot harder if you don’t ask consistent questions.

Background

Name of Business:
Brief Description: (location, types of rooms/tours)

Rooms

Number of Rooms Managed:

Number of Estimated Bookings Per Month
Manual (telephone, fax, email, front counter):
Own Website:
Online Distributor Website:

Average Value of each Booking:

Tours

Number of Tours Offered:

Number of Bookings Per Month
Manual (telephone, fax, email, front counter):
Own Website:
Online Distributor Website:

Average Value of Each Booking:

Note: we have excluded 3rd party distribution costs here. Useful guesstimates are too difficult, so we will compare them separately.

Part 2: What Will You Get?

Ask the distributor what you get from them and how you can use it to run your business. These questions are focused just on inventory, bookings and distribution, but you can ask broader questions if you want.

Inventory Management and Direct Bookings

Basic Inventory. Can I use your system to setup my inventory and set availability?

How Inventory Works. Explain how I can manage inventory, and/or provide the web address of an online demonstration.

Local or Web. Do I install your system (or systems) on my computer or do I run it from a web browser?

Accommodation / Tours. Does the system support accommodation? Tours?

Manual Bookings. Can I use the system to record manual bookings (phone/fax/email/front desk)?

Name. What is the correct name and web address of the system (or systems) I would be using?

Own Website Bookings

Enablement. Can I use your system to enable online bookings from my own website?

On Site Calendar. Can a visitor enter the preferred date/# of nights on my website before pressing a search button and being taken to a results page, or do they need to navigate off my site to your site to enter preferred date/# of nights?

Payments. When do I receive the funds for bookings from my website?

Online Distribution

Distributor Website Bookings. Will inventory be available for online bookings on your website? Please provide the URL.

3rd Party Distributor Website BookingsPlease provide a list of URLs of 3rd party websites where my inventory can be booked. A link to a web page that provides an up to date list of URLs is preferred. Only include websites where integration is active (planned integration with websites may be attached as a separate list).

Categories of Distributors. Provide a brief description of your level of integration with each category of distribution site – note actual URLs to be provided in list above: Major Travel Portals, Visitor Centres, Automobile Clubs, Last Minute Sites, Other Networks (travel agencies, booking systems etc).

ATDW: Will my inventory be available for booking via the Australian Tourism Data Warehouse? If so, indicate what 3rd party distribution sites (by URL) will offer my inventory for sale. Identify the steps required to activate ATDW bookings in these outlets for my inventory.

Selection. Do I get to select which of the available 3rd party distributor sites my inventory goes to or does that decision get made by you?

Payments. When my inventory is made available for bookings on 3rd party websites, when and how do I receive my funds? Explain any waiting periods or witheld amounts.

Automated Inventory Reductions. If a booking is made from any of the available booking points, is available inventory for all other distribution points automatically reduced?

Manual Allocation. Do I need to manually allocate/reduce inventory for any booking points to avoid the possibility of being overbooked?

Affiliates

Affiliate Bookings. Do you offer an affiliate system relevant to my business? How could I use it?

Part 3: What Will It Cost?

Based on the estimated transactions for rooms and tours provided, how much will it cost me (including taxes) for the system you have described? If there are pricing options, base the pricing on the one you feel is most approriate for my business, and explain the alternatives in the pricing formula section below.

Rooms

Description	Mth 1	Mth 2	Mth 3	Mth 4	Mth 5	Mth 6
One Time Setup Fee
Recurrent Fixed Fees*
Your Commissions or % Fees
3rd Party Commissions or % Fees
Credit Card Fees
Any Other Fees**
Total

Tours

Description	Mth 1	Mth 2	Mth 3	Mth 4	Mth 5	Mth 6
One Time Setup Fee
Recurrent Fixed Fees*
Your Commissions or % Fees
3rd Party Commissions or % Fees
Credit Card Fees
Any Other Fees**
Total

*Recurrent Fees: please explain payment frequency if not monthly.
**Any Other Fees: please explain.

Pricing Formula

Own Website Booking Fees: What Booking Fees apply for bookings that come from my own website?:

Other Distribution Sites: State the fees for bookings originating from 3rd party distribution websites listed above. Confirm that following a 3rd party booking, transfer of funds to my account and inventory level updates are both fully automated. If this is not the case, specify arrangements.

Minimum Term: Is there a Minimum Term of the contract?:

Break Costs: Are there Break Costs if I cancel before the Minimum Term?

Credit Card Fees: Have credit card fees been included in the estimates? If not, what credit card costs do you pass on to me? Do I need my own merchant account and pay my own credit card fees?

Terms and Conditions: URL for fees and related terms and conditions:

Pricing Variations: If there are relevant variations to your pricing formula (including tiers for higher/lower volumes or discounts for minimum contract periods), explain them here as they relate to each component of the overall cost:

• One Time Setup Fees
• Recurrent Fixed Fees
• Your Commissions or % Fees
• 3rd Party Commissions or % Fees
• Credit Card Fees
• Own Site Booking Fees: (for example, what fees are payable if a booking originates from my own website, or a phone/email/counter?)
• Minimum Term: (for example, do break costs apply if I cancel use of the system before a Minimum Term has elapsed?)
• Break Costs: (for example, what fees apply if I cancel before the end of the Minimum Term)

Other Costs: Are there any other taxes, fees or charges that will be incurred in using the proposed solution that are not covered above?

End of questions.

Links to Solution Providers

If you haven’t already seen them, you may want to check out the websites of these solution providers to get an idea of what is on offer:

• Levart Distribution Systems
• V3/frontdesk
• SiteMinder Booking Button
• BnB Manager
• RMS Online
• ResOnline
• Channel Manager
• TXA (not a solution provider itself)

These are not affiliate links. The listed providers aren’t by any means the only solution providers, and we will add to the list as required.

Summary

Ok, so if Online Distribution and Liquid Inventory are important to you, these are the questions that will let you learn more about what it will do for you and how much it will cost. Distributors that offer solutions with easy to understand features, benefits and pricing should have a huge advantage.

Option 1 and 3 looking better by any chance?

Right now it is definitely early days, and comparing solutions is hard. Good luck, whichever approach you decide to take!

Systems Provider?

Are you a systems provider and not on our list? Are you on our list and would like to help make it easier for operators to understand your solution? Send an email and we can discuss a way to publish information about your solution.

All solution providers should be aware that in relation to online booking and online distribution systems, we are independent of solution providers, do not take fees or commissions, do not publish advertising or advertorial and reserve the right to check our facts and draw our own conclusions. While we ask for help in correcting errors, we do not give you any right of approval over what we publish. We do not make comparative recommendations for one booking and distribution solution provider over another.

We do aim to help tourism operators understand the nature of your solution so they can make a more informed decision. We do aim to enable our own platform so that tourism operators using our platform can use a range of booking and distribution solutions effectively.

Final Note

As for any important business decision, do not rely just on an article like this to decide whether to use or not use any of these systems. Before making a decision for your business, consider the costs, benefits and risks and if necessary get formal business advice.