Distribution 2.0 what it is?

The world of b2b distribution has been offering the same soup to the industry for years now!

They have been (and still are) major players in the international distribution chain, playing a truly important role for hotels around the world. However, it is useless to hide that, through their distribution model, which has undergone several mutations over the years, they are certainly not a synonym for innovation.

With the advent of the big online players such as Booking.com and Expedia, they have seen significant market shares lose over the years (until today). Inevitably causing a race to competition mainly based on the competitiveness of prices and the availability of the hotel room inventory.

Result? This has inevitably led to the emergence of 3 important problems that the entire supply chain (for those who sell and those who buy) must face:

1. Reduced margins The long queue of layers / intermediaries between supply and demand has been further lengthened in recent years, causing a significant reduction in margins both on the hotel side that sells (paying high unsustainable and unjustifiable commissions), and on the side of travel demand (b2b) who buy and must share the commissions with too many intermediaries in the booking path.
2. Hardly scalable and obsolete integrations. The numerous intermediaries who interfere in the booking process (see previous point) have connected with each other over the years by adopting obsolete systems and infrastructures. The flow of static data (photos and descriptions) and dynamic data (availability rates and inventory) rely on integrations based, in most of the cases, in cache and not real time, which often do not correspond to reality, generating booking failures and many technical issues. Here again we have a high and complex distribution management processes that generate a further margin reduction.
3. Loss of control and rate leakages. Who booked the room? A hotel that works with a wholesaler, for example, is unable to know who made the booking, who is the final buyer (often referred to as the last mile travel agent). Lack of transparency generates the loss of control of the final price. Especially in the world of b2b, where the margins for demand generators are low, the only hope of surviving for them is to be able to sell a room at a very competitive prices, cannibalizing and often creating competition with their hotels partner, instead of building and nurturing a relationship based on profit.

So, as far as distribution is concerned, where are we going? Definitely towards solutions capable of solving the above problems:

1. Increase in margins, thanks to the reduction of layers (intermediaries) between those who sell and those who buy. Open API Marketplace are among the most interesting innovations from this point of view thanks to their business model the connections (between supply and demand) will be more and more direct, turning the cost of intermediation “sustainable”.
2. The open APi Marketplaces facilitate the integration process between the seller and the buyer, by adopting the "plug and play" approach without commercial contractual obligations. Thanks to the rapid integration processes, and their reliability, the data (static and dynamic) are transmitted in real time, thus eliminating complex processes, and consequently offering the possibility for supply and demand to build profitable relationships.
3. Transparency! Amazon marketplace or the various app stores are an obvious example to follow. Business agreements without friction and obligations are the correct approach for a long and profitable relationship. But above all, the rules of the game (terms and conditions, commission level, etc.) will be increasingly defined by the Hotels, which will acquire a key role in the distribution chain. Long life to hoteliers!

This is what HyperGuest committed to achieve as goals.

This is what we like to call “Distribution 2.0”!