Article in Techmoran, 2018-09-27
HotelOnline, an online hotel booking software suite firm that helps hotels get online bookings through its super simple, cloud-based dashboard to manage bookings, rates and availability from one place has signed up over 1,500 hotels and accommodation providers across 17 markets in Africa, Europe and South Asia.
Connected to the major online booking channels, Hotel Online bookings come straight into the dashboard, and any changes are immediately reflected in all the online channels. Hotel Online is a Property Management System (PMS) with an integrated Channel Manager.
“Most local hotels in Africa find the whole process of marketing themselves online, challenging. So we offer that as an auxiliary service: We take high-quality pictures, and we build high-quality profiles on Expedia, CTrip, HRS, Hotelbeds, etc, as well as web sites with integrated booking engines,” said HotelOnline’s Executive Chairman Håvar Bauck. “The whole idea is that most hotels that are not already online, need a bit of help to get started, and that’s what we offer them. Along with the tools to get the most out of it once they get there.”
HotelOnline enables hotels to distribute themselves online, including on other bedbanks and Online Travel Agents (OTAs). It’s relationships with the OTAs are symbiotic, and generally very positive. HotelOnline is a Software-as-a-Service (SaaS), bundled with simple online marketing services, such as OTA profile and website building. Many hotels, and most alternative accommodation providers do not wish to handle their own online marketing at all, though. These clients usually opt for its managed distribution solutions. HotelOnline builds and manages their entire online presence, and handle their online distribution altogether.
“We offer our managed services at zero upfront costs, and no fixed monthly fees,” said Bauck. “We create all the marketing content, and provide the hotels with a free all-in-one dashboard to manage reservations. Hotels can still manage their own rates and availability, and apply dynamic rates. In fact, we encourage them to do so. We however enforce strict rate parity across all channels for hotels using our managed services.”
Founded in 2013, Bauck and his former college mate, Endre, had through a series of coincidences found ourselves staying in the same neighbourhood in Nairobi. Endre and his wife were running a small boutique hotel, while Bauck was a regional director for a mobile value-added services company, contracting with most of the mobile operators on the continent.
“I was pretty much living on planes and in airports, but had my base in Nairobi, where my family lives. Hence, Endre and I were both very familiar with the travel and hospitality industry on the continent, from each our perspective. We saw an obvious gap in the market, as there were no budget airport hotels, yet JKIA is one of the major aviation hubs in Africa,” Bauck told TechMoran.
So in 2013 they put together some savings, leased 5 budget apartments next to the airport, and put in some budget furniture. They added free airport transfer to the mix, and started marketing their concept online as an airport serviced apartments hotel and within a few days, they were already fully booked. Soon Online Travel Agents started telling them that they were among their most-booked hotels in Nairobi and it dawned on them that this opportunity went way beyond just those apartments in Syokimau.
“We knew at least something about online marketing, while others knew basically nothing. The next business opportunity was right there!” said Bauck. “We approached a few hotels in Nairobi and Kampala with a simple online marketing proposition. They accepted, and we almost instantly brought them business. We were already working woth Booking.com and Expedia, so we contacted Hotelbeds, HRS, Hotelspro, and dozens of other Online Travel Agents. The business just kept growing.”
Kenya being the most mature market in Sub-saharan Africa, HotelOnline says it knew that the gap in the market was even bigger almost everywhere else. The firm decided to go international from the moment go, so in late 2014, it launched Savanna Sunrise from Dubai. It got hotel partners in Rwanda, DRC, Eritrea and Madagascar.
The light version of HotelOnline Property Management System (PMS) is its core value proposition. It is the simplest interface available for managing reservations, availability and rates. It comes with a fully integrated Channel Manager, enabling automated distribution to online channels.
The Advanced PMS, which HotelOnline acquired through the Teranga deal, targets bigger hotels and small chains. As its name suggests, it requires some slightly more advanced skills from the hotels, but it is an immensely powerful management tool, not just for reservations, but for the general operations of a hotel.
“Most of the local hotels are in transition from books, to online bookings, and they are still trying to figure it out. Many of them need help to get started, and we give them that. We offer additional, optional services such as professional photography, building profiles in all the key online channels, and even simple, but great websites with an integrated booking engine. The majority of the smaller ones, opt for the fully managed solution, where we handle their entire online marketing and distribution,” he added.
Bauck says that the acquisition of Teranga was a very important addition to its business. Its core system targets an entry-level segment of hotels, while Teranga (Advanced PMS) is a solution for more advanced users. With them as part of its ecosystem, the firm is now able to cover everything from apartments and guesthouses, to major hotels and small chains. Its development team is already making good progress integrating Teranga into the HotelOnline ecosystem, sharing its Channel Manager, and bringing in the familiar HotelOnline look and feel.
According to Bauck, price, and steep learning curves are stopping hotels from digitization their operations. Small-scale hoteliers tend to be cost adverse. With low occupancy rates, margins are already being squeezed. Technology is then seen as a cost, rather than an opportunity to help increase revenues.
This is paradoxical, as readiness to adopt new technologies is rarely the issue in most of Africa. People and businesses are generally ready to embrace such change. In the hotel industry, there is a widespread perception that the currently available technologies are difficult to adopt. HotelOnline has therefore made it the core of its business model to lower the entry threshold.
Just how big is the problem HotelOnline is solving? According to Bauck, It is a problem which affects all, except a few hotels and accommodation providers on the continent. Most of them still lack both the skills and capacity to effectively market and distribute themselves online. They also lack the resources to build that capacity internally. The big international hotels, and global chains do this at ease, giving them a massive competitive advantage. Since international travelers plan and book virtually everything online, the local players in the market are no even on their radars.
A Property Management System and a Channel Manager are the cornerstones of an effective approach to online marketing. Most of the solutions available are seen as complicated, expensive, or both. Many hotels therefore skip these crucial steps, leaving them with an amputated online marketing strategy from the onset. hotelOnline says it offers these hotels a turnkey solution. The hotelier backend is super simple to use, and the frontend (the OTA profiles) is set up by us. Our clients just have to log in, and receive the bookings.