The Future of CRS: a Platformization Model
We’re seeing a dramatic shift in the hotel distribution landscape right now. For the last decade, there’s been a boom in the number of new hospitality technology providers entering the market. These companies introduced fresh ideas and products into a tech landscape that had long been stagnant. We’ve now reached a point of maturity, and the industry is moving toward a “platformization model.”
Through mergers and other strategic consolidations (including the recent one between Travel Tripper and Pegasus), solution providers are upgrading their technology, expanding their product suite, and offering hotels interconnected solutions rather than individual niche products. Tech companies are finding that the most efficient way to help hotels conquer problems inherent in the legacy “tech stack” is providing a single source for connection and interconnection, rather than points of entry provided via disparate solutions.
Hotels have often been slow to adopt new technologies, so this exciting shift will benefit the industry. But in the race to create the overarching platform, many big companies use their size and strength to shackle hotels to outdated solutions (such as charging exorbitant integration fees), rather than bringing new ideas and products to market.
This must change.
Traditionally, CRS solutions were evaluated primarily based on their ability to connect with a variety of third-party distributors, starting with GDS and travel management companies, and later OTAs and metasearch channels. Direct channel applications, such as the booking engine, have long been neglected.
With third-party distributors taking heavier commissions each year, hotels have realized the importance of strong direct channel business as part of a profitable revenue strategy. However, most CRS providers haven’t kept up with the times, leaving hotels with a lack of tools that would help maximize direct bookings.
The role of CRS in direct channel e-commerce
For many CRS companies, the “direct distribution” application is the booking engine. Period. Rate plans and availability from the CRS are distributed to the booking engine in the same way they’re sent to third-party distributors.