Hotel distribution is technology-intensive and being successful in this online travel business is dependent on proper measuring and understanding of distribution performance in real-time. It is important for the distributors to get the right insight into their distribution performance and know not only how many requests they are getting but the quality of those requests. It is common for suppliers to miss business opportunities, sometimes not even know them because of lack of functional data. All of this can be avoided by finding and tracking the right metric across distribution channels and be able to spot operational or business inefficiencies that might impact revenue.
Two good examples of suppliers who understood and implemented complex analytical tools and achieved immense growth are GTA and Hotelbeds. They are both known for their scale of operations and are known not only for doing pioneering developments in the distribution technology but also for contributing to each other’s growth. Both used XML analytics to get deep insights into performance and better propel daily business.
Enormous system and network capacity is required given the growth in the number of online bookings and the rapid adoption of new technologies. Distributors have these assets in abundance but fail to fully utilize them because of improper management of the performance of each supply chain. We need to understand that each distribution channel carries a cost and delivers varying degrees of benefits in return. It is imperative to find channels that may or may not be adding value to the distributor’s operation and choose the right mix of channels capable of yielding sustainable profit streams.
Below are five critical data sets derived from XML transaction streams that are essential for every distributor in managing their daily distribution needs:
- Timeouts – It is inevitable to have errors and failures in networks, servers, applications or even service requests. There could be timeouts in requests resulting in missed sales opportunities as the customers won’t be able to get through. The costs of lost opportunity are directly proportional to the size of the travel business. The most efficient way of handling this anomaly is to let distributors know exactly when timeouts happen, why they happen, for how long and how they can fix them.
- Response times – Response times play a major role in conversions and examining system’s health and performance. It is important for the distributor to know how long it takes to process a request on his system and how often timeouts occur. Also, this data is more meaningful in percentiles instead of simply calculating an average of multiple response times.
- Inventory – Distributors need to know exactly what people are looking for and if it is available in their system. It is common for distributor’s system to show non-availability when the inventory is actually available or run out of an inventory before taking action to replenish their stock.
- Margin Management – The costs will vary when searching for different rooms and destinations from multiple suppliers and a range of costing and pricing structures with different margins will appear. There will be difference in buying price and selling price due to margin variations from different suppliers. The most efficient way of handling this problem would be to routinely check for system performance, error-check XML messages and analyse real-time search to keep inventory levels in line with demand.
- Revenue per search – The travel industry measures activity levels by analysing the look-to-book ratio. This ratio is the ratio of number of inventories searched and viewed vs number of inventories booked. It is important to know the quality of these requests and whether the system is delivering appropriate results. If not, the underlying algorithms should be modified to deliver appropriate results.
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