The hotel industry is fragmented, and so are the standards it uses to categorize its data. The industry would be better able to communicate with each other if its systems used common standards for data.
Aspiring to fill the gap is Amadeus, the Madrid-based travel technology giant.
Tnooz recently spoke with Peter Waters, Amadeus’s head of hotel distribution, who specifically invoked the recent airline industry effort at standardization as a positive model for the hotel industry to learn from.
This is notable because, several years ago, Amadeus lobbied against the effort of the International Air Transport Association (IATA) to persuade airlines and technology providers to adopt new, global technology standards (called the New Distribution Capability, or NDC). Now about 90 airlines expect to be using the New Distribution Capability standard by 2020, IATA claims.
The difference is that when it comes to hotels, Amadeus wants the industry to adopt its own standards, not some lobbying group’s.
(Tnooz’s interview with Waters has been edited — and questions have been removed — for clarity.)
“It’s incredible. There are so many discussions at the moment in the airline space around NDC merchandising, allowing new commercial models and unbundling the traditional product and building the infrastructure to support relevant offers….
“In the hotel space we’ve got vastly more fragmentation, tens of thousands of different hotels, be them large chains, or small/medium chains, independents trying to distribute their products through many, many channels to guests, be them business guests or leisure guests.
“No one’s actually come forth and tried to put a standardization in place, even though the industry is less regulated than airlines and the industry would arguably benefit even more from it.”
In the company’s first interview on the topic, Amadeus’s executive tells Tnooz that the company has been trying to fill the gap. He says there is inconsistency in how a hotel room is marketed across diverse channels and by intermediaries and a clear lack of standardized hotel room classification.
“Most of the other industry players I know that are cleaning up and giving structure to hotel data are doing it for their own purposes…
“Very few players I see are taking it onboard so that they then onwardly distribute to any other third-party channel who wishes to consume it.
“I think the difference is is we’re trying to be really neutral within the industry to do that and do it on a global scale and not just try to normalize information for our own product consumption.
“Over the last year, we’ve seen notable uptake in these standards from large deployments going on in some very key markets to us.
“We aim to make it an open service to everyone that wishes to consume against our web servers to use.
“We’ve been represented and had members of the board within HEDNA [Hotel Electronic Distribution Network Association] and other associations, and, when we present what we’re doing to these associations, we’re getting very positive feedback because no one else that we see has taken this forward very far.
“We’re talking to players like HEDNA and other associations. The problem is that it’s a fragmented industry, with tens of thousands of players from the hospitality side trying to get access to millions of consumers via tens of thousands of professional agencies.
“So it is very hard to drive a consensus on standards, particularly as we see a lot of the actual players are sitting on legacy and old technology and infrastructure, which makes it difficult for them to change from the standards they have today.
“We are pushing forward and lobbying to drive in adoption of standards by a major global lobbying group.
“But rather than wait we think that we just need to go forward and take it through leadership and just do it, because we think by doing it people will adopt the standards we’re trying to make as opposed to a theoretical lobbying process.
“By doing this standardization and understanding the attributes of a hotel, we’re now launching a product where, when a flight is being made, we can actually recommend hotels to the booker at point of sale, we can help the agen say, ‘We see you’ve booked flight A to destination B, individually or as a business traveler or as a family. This is a series of hotels we really recommend that would fit the profile of the type of trip that you’re wanting to make, and the destination you’re going to.’”
“Again, we can really use that data we’ve captured on not only the hotels, but also the flight information and the traveler information, and combine the two to really provide value-add choice, as part of the traditional air flight workflow.
“That’s something we’re just launching this month in Europe, and we’re expecting big returns from that. We think that demonstrates the benefits of what we’ve done, and the types of new products and services that we’ll be able to create on top.”
Early-mover advantage
“There are other players out there. But I just don’t think anyone’s achieved it to the scale that we’ve done at this point in time.
“In the past few years, we have massively increased the amount of content we have in our systems. In the past few years, we’ve increased by 300% our inventory, up to about 485,000 properties today.
“To make that available across all of our channels, be it professional channels, on professional desktops or on corporate online booking tools, or through web services to online channels, meta search, etc., we realized quite quickly that we needed to create a set of standards to make it really easy for people to connect to us and consume that content.
“We’ve put in place a whole content engine to cleanse and standardize things like rate types, room types and many other aspects of the content, the attributes of a hotel, so that it’s making it easier for our own applications and third-party applications to connect to us.
“We also then allow search-and-compare features to happen, so we can allow these professional agencies, for example, to look at choice of hotels coming from the hotel itself, or coming through an online channel, or coming through an aggregator or bedbank channel, and at the same time review the price of the hotel if they book the same hotel through one or any of those different suppliers, but also look at the reward they receive.
“In our displays you can also now see how much reward the agency will make, either through commission or through mark-up or service fees.
“Again, by putting those standards in place we allow professionals now to see more choice than they ever have before and to better understand the rewards they can receive.
“Similarly, from the hotels’s perspective, they like our distribution channels because they see a higher yield on average coming through the intermediate agency and the GDS channels then they do through some of the pure online plays. Also, they can provide alternative advertising approaches through our channels, too.
“Each side of this operation relies on creating a new set of standards.
“Again, there’s nobody in the industry who’s created an IATA or an NDC model.
“We thought at Amadeus that we are the type of company, we’ve got the scale and the financial muscle, that we are uniquely able to embark on that undertaking.
“We have our direct source content, the traditional hotel chains, the likes of the Hiltons, the Accors, who you would traditionally find in our platform, but we have added a number of intermediary suppliers — sources like Teldar Corporation, HRS, and many, many bedbanks.
“We also have our own representation company, and through that channel as well we’ve gone out and sourced a large number of independent properties now as well.
“However, we’ve found that more isn’t necessarily all it takes. It’s also very much about the quality of content that we can put through our channels. That’s quality in terms of the best rates, good commission, and commercial model….
“Data standardization and normalization lets agents help their traveler clients shop efficiently. A client looking for a child-friendly hotel may want to know if there’s a swimming pool, let’s say.
“We need our database to have the right attributes or sentiments associated to that hotel so that the agent knows that when they book that hotel they’re going to get the right service.
“High-quality results are what’s also driving a significant growth in attachment rates. We are seeing more hotels booked in association to flights booked through our platform.
“The commissions or rewards that professional channels can book is also very important.
“I think we’re unique in the investments that we’re making in the quality of standardization across all of those different sources. I think that really differentiates us from our peers and our competition at this time.
“To automate the data cleansing, we built a parsing engine. To take a very simple example: room-type descriptions. We can receive, as I mentioned, the same hotel content coming from the hotel itself or through two or three different sources that supply that same hotel.
“What we do is we pass the descriptions of those hotels across a parsing engine where we can read the text and descriptions of the room and pick out keywords, such as ‘sea view’, ‘twin bed’, ‘minibar’ — whatever is in the descriptions to describe the product.
“As well as using the coding, which may be sent to providers, which are all unique and specific to the providers, we can put logic in place using our parsing rules engine to say, “Right, if we identify the word ‘double bed’, we know that we can categorize that as a room type with a double bed. If it says ‘sea View’ we can also then categorize it as a room with a sea view.
“We actually read through the descriptions from our parsing logic and then we create room-type codes, definitions or clusters where we can then match in, irrespective of the source where the content is coming from, into standards that we’ve set.
“We can create, if you like, our new standards.”
The commercial impetus
“We can work with our booker partners, if they wish to connect through our web services, to define what room standards and room types they want and then we can normalize the data coming from each of the different supplier sources using the codes combined with our parsing engine to cluster each of the room types coming in into the standards that they want…
“From their side, it makes the building against our web services much easier or creating new products themselves tailored to their own specific business models much easier to handle. That’s primarily, from our point of view, done through this parsing logic.
“There’s always some retouch and manual work but Amadeus is automating most of the work for many elements and attributes of hotel content such as rate types, cancellation policies, etc, etc. …
“So far we’re getting a good adoption and very good feedback from our customers building against our technology.
“That’s partly because we are making very, very significant investments into the actual enterprise systems that run hotels and hotel chains.
“We see a number of the very large hotel groups and medium-sized hotel chains today sitting on, like I said, very old technology, which doesn’t support the modern personalization features, the ability to unbundle the product and distribute different products through different channels, and discriminate which product goes through the different channels out there in the industry.
“We’re working on very significant investments to provide next-generation central reservation systems or property systems.
“We think a number of hotel groups will need to upgrade to new technology to operate and provide a lot of new merchandising and personalization features in the industry.
“As well as doing it from a distribution angle, Amadeus is trying to tackle a very similar problem from an IT angle, and we think the combination of the two is very powerful, and will allow us to move the industry forward, and for us to provide a lot of benefits into the buyers and sellers by providing that service to them.
“To help with de-duping records in our database, we work with GIATA who is a technology partner of ours, to make sure that we, what we call, de-dupe and create the same coding standard for an individual address or accommodation, irrespective of the channel it comes from so that we don’t present the same hotel multiple times in our display.
“We then blend in the rates, the availabilities, the descriptions and the information sets coming from the different suppliers, but associate it to that individual property.
“It sounds like a trivial thing to do, but even that had no standards, and we’ve had to work very hard with our partners to actually create a single property identification code across all of Amadeus databases so that we don’t, as I said, present the same hotel twice not realizing it’s the same physical building.
“Amadeus has now succeeded in having an individual property code for each property in all of its databases.
“Thanks to the GIATA code-matching, we can say in our displays, “For this room in this hotel, the same room will be priced on rate one, direct from the hotel, rate two, from alternative supplier one, and rate three from alternative supplier two.”
“Then we can say, “From the professional booker point of view, the rewards you will receive will be X commission from the hotel, or Y commission or mark-up from alternative channel one, or Z commission or mark-up from alternative supplier two.”
“In that way, we’ve got what we call a margin manager functionality, so that the professional agencies can see what’s the best choice of channel to book that hotel from a customer servicing point of view, and to provide the best rate to the client, but also from a professional agency point of view what generates the most reward for them.
“Again, in that way we think we’re giving more choice to the agencies on what they can sell and how they service, and more rewards for giving the ability for them to optimize the lowest price to their customers, and/or the highest reward to themselves, as applicable for the type of sale that they’re in.
“Whenever we acquire new content, we associate and match the inventory that we’re receiving from the new source against our existing databases. We create the cross-matching references there and then, prior to loading that content into our systems.”
“We have two models to onboard. If we identify a property with high volume, or demanded by one of our booker channels, let’s say a travel agency, option one, and we do this today, we do it with the large TMCs in particular, we receive lists of their demanded hotels, which may not be represented in Amadeus today, as we offer representation to that hotel through our own representation company.
“We work with LinkHotel, which is the Amadeus representation company, in exactly what we call those boutique, independent hotels, which may not have a business case of, say, the broader GDS distribution.
“We can offer to bring them on board, host them in our LinkHotel company. We de-dupe them to go through the data standardization, put in the pictorial media, the descriptive media, etc., and then make them broadly available to the whole Amadeus community as per any other GDS hotel. We can have incentives and reward structures for the travel agencies for bringing that content to us. That’s model one.
“In the event the hotel is still not interested in participating in our GDS, we can still load exactly the same information into the Amadeus databases. We can give it a unique code, give it descriptions, etc., but we do it on behalf of the travel agency or the booker. They can create, if you like, a GDS electronic catalog in Amadeus.
“So from an agent point of view wishing to book, it is absolutely invisible and transparent. They don’t see that as not connected, or not part of the Amadeus GDS content. It becomes exactly like a normal GDS hotel, or Amadeus hotel, and we have a back end portal where we can then send information via email, fax, to the hotel whenever a reservation is made. We semi-automate the on-request handling, or the free sell process, so that the agents don’t have to do that each time.
“For example, if there’s an allocation model, it will send a message to the hotel that we’ve now booked another room, or if it’s an on-request process it will send an email to say, ‘We would like to book another room, please confirm.’
“When the hotel confirms, that can go back in our system, we update the booking itself and confirm that the reservation has been made, and update the allocations, allotments, if appropriate.
“We almost fully automate. It’s just the back-end to the hotels where we’re still working on the data exchange via fax/email process. We provide administration tools for the agency to overview that, to load new content on behalf of themselves, and also manage their allocations, allotment and therefore the hotel catalog itself.
“What we’ve found is often if a hotel doesn’t want to come in the system, and we put them in as an electronic catalog model, they actually see the benefits and the bookings coming in, and many of them then convert to full blown represented hotels within the GDS for broad distribution as a second step.
“We see that really has helped us bring a lot of long-tail content that our big booker customers have been looking for, and bringing them into our world with a high-value add for them. That’s been used by many of the big TMCs for example, today.
“Our vision of where we’d like to go is that, we will be successful in pushing through this model, pushing that out so that people can then follow suit, adopt our standards and create a de facto standard, if you like.
“We think that would be for the good of everybody in this industry.”