An alternative to commission-based booking interfaces

I recall a conversation with an owner of a Relais & Chateau-affiliated property in the early days of the Internet. He questioned the need for a website and proclaimed to all, “No one I know will book my property over the Internet.”

The first Internet booking engines were somewhat crude, clunky and expensive. Moreover, hoteliers had to load room inventory onto the Internet system, as they did not properly link to the property’s internal PMS. Luckily, those days are long gone, and most Internet booking systems offer two-way interfaces.

There are many providers of Internet booking engines, a field that is dominated by two excellent products: TravelClick’s iHotelier and Sabre’s Synexis. Both of these are widely available and offer a myriad of add-ons and back-end systems designed to enhance connectivity and rooms inventory management.

But just as one thought this was a two-horse race, making your decision rather straightforward, a number of new entries have come into the market. One of them that deserves your attention is a Canadian-based upstart called B4Checkin. I had an opportunity to spend some time with the company’s founder and CEO, Saar Fabrikant, to talk to him about this industry and his company’s positioning within the field.

Larry Mogelonsky: Tell me a little bit about the history of booking hotel inventory over the Internet.

Saar Fabrikant: According to a survey by the Hotel Association of Canada and parallel activity by the American Hotel & Lodging Association, nearly three-quarters of all hotel reservations are made online. This is either through an OTA like Expedia or on the hotel or hotel brand’s website. This is a stark contrast to 10 to 15 years ago, when the telephone was the dominant channel. 

By using the Internet, online bookers can easily compare services, facilities and prices for a variety of hotels. They can also access an OTA to get this information in one place.  

In order for properties to take advantage of the online travel booker, it is necessary that they have a searchable, aesthetically pleasing and functional website with booking capabilities. This will allow the property to meet the guest’s information needs and to make a reservation. 

These hotels require a “booking engine” application to be attached to their website to permit people to book rooms in real time. One advantage of booking with the hotel directly is the use of the hotel’s full cancellation policy as well as not needing a deposit, as is the case with most OTAs.

Based on these increasing trends, it is important that hotels have a robust and functional booking engine to capture the reservations of the modern traveler. 

LM: When you first looked at starting your venture, what was the status of these booking interfaces?

SF: This was started as a custom solution for the Canadian hotel management firm, Centennial Hotels & Suites, which used Visual One as a PMS. It was determined after it used the product for 18 months that we met all performance criteria. The “standalone,” non-interfaced version was developed next, and we started to actively market the product.

The next PMS we became certified with was Micros Opera. With the addition of the Micros interface, we learned that interfaces were standardized through HTNG (Hotel Technology Next Generation) and that PMS vendors would not allow us to develop these interfaces unless they were initiated by existing or potential customers.

LM: What was the unique niche that you wanted to exploit?

SF: The simple situation that hotels were buying PMS packages that include reservation systems, then they decided to switch to a third-party reservation system, third-party email CRM solutions and third-party feedback systems. We identified this as a unique niche market that was under-serviced in “a one-stop shop” to become “an extension” of any given PMS.

LM: The leaders in this industry are Sabre’s Synexis and TravelClick’s iHotelier. How do you successfully compete against these “big boys”?

SF: The big boys are selling a canned solution, similar to Microsoft Office, which was designed for the masses. They are both large companies that have a full suite of products. Both companies added products after being primarily GDS providers. Their pricing models are a percentage of revenue or a per transaction fee. This can penalize hotels with large average daily rates or a high number of transactions.

B4Checkin offers a more customizable solution that has features similar to the big boys. With our new 2.0 version coming in the third quarter of this year, B4Checkin will be the first booking engine to allow the customer to choose from four design templates. This will allow the hotel to have a truly customized look. B4Checkin also charges on a flat monthly fee model that allows hotels to save thousands of dollars as booking volume increases.

LM: What are your expansion plans?

SF: From a tech perspective, we are currently in development of our platform to the latest technology and adding various new products to encompass all our offerings under one platform, as well as a couple of new product developments. From a sales perspective we are planning to start looking at Europe and Asia as new markets for us.

LM: What does the future hold for this business?

SF: Distribution in general has become the main focus of hotel operations, which changed radically from eight or nine years ago. OTAs and distribution channels literally created the revenue manager position in the hotel world. Personally, I believe the hotel industry is going to have to redefine the reality of expensive distribution channels, and we are going to continue to develop tools to increase even further and maximize the value of the direct channel.