The hotel reservation ecosystem is weighed down by siled software systems, intermediaries taking a slice of the RevPAR pie, and customers not having as much control over their experiences as they should. The Impala founder spoke to SkiftX about how to eliminate these issues with a new model: Open Distribution.
Speed has never been such a critical ingredient to business success – we expect email responses within five minutes, deliveries within 24 hours, and game-changing ideas that come to life overnight. Hotels, however, continue to crawl when it comes to innovating the most important piece of the puzzle: selling their rooms. How can the industry break away from clunky, expensive integrations and middleman-heavy indirect affiliate programs?
One solution that fuels a new future is the concept of open distribution – a model that charts a new course with less bumps and lower costs for hotels and room vendors. SkiftX spoke with Ben Stephenson, CEO and Founder of Impala, a company pioneering the new approach to booking, to find out how Open Distribution can open doors to new opportunities for the travel industry.
SkiftX: How do you define open distribution? Tell us how it creates a new approach to online booking.
Ben Stephenson: Open Distribution is a new model that allows hotels and room sellers to work together seamlessly. In addition to removing those layers of inefficient middlemen, it dramatically reduces the time it takes to get up and running. Consider the old world where room sellers and hotels had to agree to business terms, take six weeks to create an integration, test it, coordinate sending pictures of the property, and all the other tedious steps before booking a room. single bedroom. . Now all that work is taken care of. Hotels and room sellers can be connected and start working together in less than 48 hours, providing flexibility and control to both parties, without anyone else getting in the way.
SkiftX: How do commissions between hotels and OTAs work?
Stephenson: The whole philosophy behind Open Distribution is to be the underlying infrastructure that allows a hotel and room seller to work together in a way that suits them. So by default we have agreed a base commission with the hotel, but there is flexibility to help attract customers that benefit both parties. For example, let’s say a hotel really wants more Japanese customers because they tend to stay longer and spend more.
This hotel might be willing to increase the commission level from 12% to 14% for an OTA that attracts Japanese customers.
Each hotel has a different strategy. The market sometimes incorrectly says that hotels are simply looking for reservations that charge lower levels of commission. That’s true to some extent, but what hotels are really looking for is the right kind of customers. Hotels can easily adjust their commission levels as part of their strategies to appeal to this target audience.
SkiftX: Speaking of guests, what do they get out of it? What are the tangible benefits for the people who will actually stay in these rooms?
Stephenson: In addition to thinking about the price of a room, customers want a more complete picture of the room that goes beyond square footage or bed type. Our technology and API allow room sellers and hotels to provide a richer level of detail about the experience that will greet them upon arrival. For example, a hotel could create an experience where the guest can see what floor the room is on, if there is a bath or shower, if there is a desk where they can work, and other features. that can help customers determine which part is exactly right for their needs.
Despite hotels’ best efforts, the existing infrastructure does not allow them to go much beyond sharing room types online. Open Distribution aims to provide a complete picture of the experience to meet the needs of today’s experience-driven traveler.
For example, we work with a company called RemoteDream, which was built on the belief that there will be a massive increase in the number of remote workers. They have different requirements, such as an office, a kitchenette, and a common space where they can meet people. We also work with a brand of hostels and hotels called Selina who want to attract customers from this niche. They couldn’t sell these rooms via RemoteDream with their existing technology, but Impala made it possible within 48 hours.
SkiftX: Can you share some of the impact open distribution is currently having?
Right now, many hotels are struggling to balance post-pandemic recovery with simply not having enough staff to handle reservations. We work with a large hotel group that had to significantly reduce its distribution and e-commerce team due to Covid. Now, as things pick up speed, the understaffed e-commerce team has had to contend with 50 or 60 new partners eager to sell their rooms to help the group transition from business to leisure. They couldn’t manage the expense or the time, but Open Distribution gave them the ability to work with exactly the partners they wanted on the exact terms they preferred – without having a lot of middlemen in the way.
SkiftX: Looking far into the future, what could this mean for the travel industry as a whole?
Stephenson: All in all, it will be a way to finally realize the dream of attribute-based selling. We can let customers pay a little more for a room with a bath, or they can add a balcony at checkout. The industry has always been excited about this possibility, but we never quite got there. The technology didn’t exist and there was no big catalyst – hotels or customers – to fuel the change. Now we see travelers wanting to control the experience and hotels wanting to give them that ability. As the evolution of the hotel experience continues, Open Distribution is designed to meet the demands of a new generation of customers. And ultimately what we’re trying to do at Impala is more than help sell rooms, we’re trying to rebuild the infrastructure from the ground up so that the next 10,000 travel entrepreneurs can create the companies that power the next 400 million trips.
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This content was created in collaboration between Impala and Skift’s branded content studio, SkiftX.