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Distribution & Channel Management Solutions *

Market Summary – Distribution & Channel Management Solutions

Market Overview

The field of Hotel Distribution Systems is expansive, especially when considering all the technologies that ensure a reservation and its associated information travels from the consumer to the hotel. The field is more concentrated for restaurants and the golf industry but is growing. As a result, Capsolve needed to create an understandable approach to this research report. The simplification chosen to accomplish this was to treat Golf, Restaurant, and Hotel Distribution Solutions as an overlay capability across the top of many technology categories. This causes us to ask one question of each solution considered for this analysis. Does the solution facilitate transactions in any part of their lifecycle?

However, qualifying technology in this manner causes us to consider an unwieldy number of solutions. Therefore, the study excludes the solutions from other categories – CRS, PMS, IBE, Website Management & Marketing, and Content Distribution. It includes subgroups such as Switching Services, Channel Management solutions, Food Delivery Service Aggregators, and selected Mega-Product companies. Finally, solutions typically known to be endpoints, such as CRS, Website CMS, or OTA, may be included if they reach further along the hotel distribution stream in the direction of distribution.

As of this writing, Capsolve has identified 81 industry Distribution Systems. Historically, this category was marketed to larger companies, but this has changed as the solutions began to accommodate individual properties, especially for hotels and restaurants, to a lesser extent. This has occurred over the course of many years due to multiple factors and ultimately stems from the wide variation of needs across the marketplace.

As seen in the above image, Distribution Systems are delivered worldwide by companies headquartered in many parts of the world. The United States has a significant share of those tracked in Capsolve’s research, approximately 46% of the total, followed by the United Kingdom, Germany, and Spain. The international presence is much more prominent when factoring in the complete Hotel Distribution landscape across multiple categories.

Marketplace Context

As with other categories within hospitality, this dispersion extends well beyond the geographic headquarters of the solution providers into the actual functionality of their respective solutions. Depending on your business needs, you will find almost any combination of functionality within this marketplace. However, sifting through these and hundreds more vendors that play a role in distribution may become overwhelming regardless of your technological prowess.

Sales & Marketing Considerations

Hotel distribution solutions are primarily considered an operational center for the industry. Still, they are increasingly being intertwined with marketing solutions of various types in addition to feeding back-office systems. Digital Marketing is connected deeply to Website Management. Advertising, merchant programs, and placement may influence OTA and GDS performance. Sales strategies and tactics will affect Group Sales efforts. And technology may be an important part of nearly any successful marketing or distribution program implementation. We have seen multiple examples of new entrant solutions becoming either new marketing or distribution opportunities for the industry, and occasionally, they provide both values.

Considering our goal of facilitating transactions within distribution channels, we quickly see this category’s permeating effects. Its data may inspire sales and marketing programs as we contact a recent purchasing guest to upsell them. Similarly, we begin communicating with them about their stay to give them the best experience possible while traveling. We may need to account for the transaction in our loyalty program and reward the guest. And this is just the beginning.

Regarding restaurants, the marketplace of Food Delivery Service aggregators continues to expand. The industry has changed from the quick implementation of tablets representing one channel to aggregators that feed food orders straight to the Point of Sale. This subgroup now has multiple companies providing this service as an individual product or as part of a more comprehensive system, such as a POS, Online Ordering, or other functionality combination.

Current Trends

1. Adding to Brand Value: Individual hotels may need to complement the value of their brand’s distribution strength with additional capabilities, often due to their uniqueness.
2. Channel-Loyalists: Food connoisseurs loyal to a channel or a specific Food Delivery Service may not find your restaurant if you are not participating. Being visible is crucial when consumers are deciding among numerous eating options.
3. Independent Properties: These hotels may seek to compete on a more global scale and market their properties and locations to an increased and more reachable audience, partly resulting from technological advancement.
4. More PMS Interconnectivity: A proliferation of interfaces continues to make more hotel distribution channels accessible to more properties. As more distribution channels are connected directly to the industry’s Property Management Systems, more distribution options become possibilities.
5. More POS Interconnectivity: The increased possibilities for connecting to Food Marketplaces have also caused POS systems to take notice and interface with these order systems. This allows online orders to flow seamlessly into your POS and kitchen.
6. More Channels Enter the Tech Realm: As more automation gets invented, channels have become more digitized and automated. Lesser automated channels like Groups and Catering are seeing increased innovation to make them more manageable at various operational levels of the industry.
7. Partner Ecosystem Race: Vendors’ need for a mature set of features and partners pre-integrated into their solution continues to be a salient factor and point of differentiation when competing in the marketplace.
8. Certainly the Cloud: Cloud solutions are often emphasized or required in today’s RFPs due to the benefits they produce for many hotels. The value of the cloud becomes even more obvious when considering connections to external systems.

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About this Report

This document reviews the marketing information and capabilities of this category’s solutions and the surrounding technology ecosystem. It contains original content written by Capsolve to provide a perspective of current trends affecting one or more of the hotel, restaurant, golf course, and country club industries. The analysis covers a statistically significant portion of the previously defined category marketplace.