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Internet Booking Engines *

Market Summary – Internet Booking Engines

Market Overview

When a consumer travels in today’s world, there are many options regarding how to find and book a travel experience. The resulting choice creates a potential need to purchase multiple types of products and services as the trip is planned and confirmed. While most of us take this scenario for granted, those who have to make these ecommerce systems function correctly and fulfill these purchases understand the world of booking travel. The choice mentioned above may include much more than just hotel rooms. Setting other major travel segments aside, it may need to consider a bottle of champagne, a bouquet of flowers, a dinner reservation, a voucher, a spa appointment, lift tickets, retail products, tee time, and much more.

If the hotel booking is for a group, it may need to combine a meeting room, A/V equipment, and catering, and that is just the beginning. As a hotelier, it is obvious this ecommerce booking experience may need to cover the ability to purchase numerous products and services to finalize a booking. Therefore, it causes the industry to wonder about the possibilities of multi-product bookings. As you would expect, it certainly is possible. Still, it may rely on a somewhat capable and complex ecommerce solution or an array of systems that facilitate one or more purchases to complete these hotel booking scenarios.

This Capsolve report uncovers information about the many solutions in this category to allow us to discuss requirements, identify solution paths, and find the software that will simplify and increase the conversion rate for digitally sold products. Capsolve found three primary subcategories of solutions and labeled them Internet Booking Engines (IBE), Group Booking Engines (GBE), and Amenity Booking Engines (ABE) to support efficient conversation.

It’s usually helpful to put definitions around these acronyms despite them being self-explanatory. IBEs are designed to sell hotel rooms as a primary function, but they may also encompass functionality to sell amenities. The GBE solutions allow for the initiation of a lead or RFP in various forms and could even progress to the confirmation stage of a booking. These solutions may also fulfill other parts of the resulting group booking. Finally, an ABE may take many forms but allows the booking of additional products and services. It may be a standalone system, combined with an IBE, or even delivered as a fully integrated multi-product capable system.

As of this writing, Capsolve has identified 414 internet booking engine and amenity booking engine vendors serving hotels, vacation rentals, restaurants, spas, and golf courses. Group booking engines are covered in a separate Capsolve report. Aside from the original implementations of online hotel booking capabilities for brands and chains, these tools eventually allowed hotel companies of all sizes, including independent properties and vacation rentals, to place their rooms for sale on the web. A segment of these systems then began to house the ecommerce inputs for the many amenities that could accompany the purchase of a room, especially in a resort environment.

Most of these vendors focus on hotels: 384 serve the hotel industry, 144 serve vacation rentals, 141 serve restaurants, 63 serve spas, and 26 serve golf courses and country clubs.

Europe is home to 41% of the vendors with a known headquarters, followed by North America at 34% and Asia Pacific at 18%.

Ecommerce solutions are delivered by companies headquartered in all parts of the world, possibly more than any other technology with the exception of channel management solutions. The United States is home to 30% of the vendors with a known headquarters, followed by the United Kingdom, Spain, and India.

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. Most any combination of functionality within this marketplace exists, depending on your business needs. However, finding and evaluating these and hundreds more vendors that play a role in hospitality ecommerce may quickly become overwhelming.

Solution Paths

Changing your ECommerce system is usually more contained than changing other core components of your technology stack. However, the addition of marketing and ecommerce channels in recent years has increased complexity. The web and email channels continue to be joined by numerous mobile and social channels that may be viable volume sources for any given ecommerce strategy. The most common path is to choose a system to support your most important strategic and tactical technology capabilities and then decide what new or existing technology should complement it. A few standard approaches enabled by today’s technology solutions within this category include:

• Comprehensive Core: a solution with multiple modules designed to provide a fully integrated approach to covering most or all property needs
• Best Fit Core: a solution with multiple modules covering the minimum requirements in combination with important strategic capabilities
• Minimized Core: a solution typically covering the most crucial strategic and operational needs but providing significant flexibility to connect to other best-of-breed solutions to complement the core
• Best Strategic Fit: a solution providing a balance between comprehensiveness and long-term strategic needs

These solution paths are not necessarily mutually exclusive. Solutions within the marketplace may create the opportunity to combine one or more paths and meet more of your selection criteria. Appropriately formulating an RFP to share with potential vendors will help to ensure you ask the best questions specific to your business while allowing you to learn about the depth of each potential vendor partner.

Pricing Information

Numerous pricing models exist in the marketplace and it is crucial to understand how each one will affect your total cost of ownership. The standard pricing structures are:

• Base Software Price plus a Maintenance Charge: This pricing is usually charged for on-premise software installed on local servers. It is usually charged based on the number of locations, servers, user licenses, or user accounts. There may be an ongoing charge for modifications and upgrades based on the percentage of the base software price.
• Subscription Price: This pricing is more common with the adoption of Software-as-a-Service. The price is often charged annually, quarterly, or monthly and applied to each location or user account. This type of pricing is sometimes aligned with the number of rooms associated with the property within the hotel industry, the number of courses within the golf industry, or the number of restaurant POS terminals.
• Transaction Price: These fees are based on the volume of activity flowing through the software and closely align with its usage. This type of pricing is usually experienced as part of a corporate or brand affiliation, where the IBE is provided as part of the agreement. It may be defined by a flat transaction fee or a percentage of revenue.

As expected, a combination of these pricing approaches may be applied to any software.

Sales & Marketing Considerations

A Booking Engine Solution is considered a fundamental and necessary website feature. Still, as connected marketing solutions continue to increase in scope and sophistication, the existence and flexibility of ecommerce solutions become more crucial. This is the result of this combination becoming intermingled to deliver bookings. Digital Marketing drives transactions into ecommerce engines, and ecommerce footprints are finding their way into marketing programs as they reach into and across channels in search of customers.

The industry is finding more tools to conduct sales conversations for all group business segments when considering the Group Booking Engine segment. This occurs across channels, including websites and third-party sites that aggregate venues to create efficiencies for RFP generation. This segment also appears to morph with a more recent trend of selling workspace online and other purposes associated with hotels, events, and meeting venues.

Amenity Booking Engines are increasing as more solutions either focus on this capability or enhance an existing IBE to accommodate the segments of the hotel industry that require this functionality. However, as hotel companies of all sizes have found, it is crucial to understand any associated details and how they may affect any potential complexity when deciding to sell various products in the digital ecosphere.

Current Trends

While foretelling the future is entertaining, discussing the potentially crucial happenings in the marketplace is more practical. Here are a few active trends influencing this landscape.

1. AI and Conversational Booking: AI assistants, chat, and messaging are becoming new paths to purchase, and booking engines are adding personalized recommendations and conversational interfaces. Structured, accurate content helps your rooms and amenities appear in AI-assisted searches.
2. Upselling & Cross-selling: The ecommerce ecosystem is increasing with these new solutions that are often additional systems in and of themselves.
3. Guest Experience: Stay grounded in what your guests have to deal with when designing what they are purchasing and how they will buy it.
4. Interconnectivity: While the ecommerce realm continues to create more innovative technologies, planning and simplifying your approach is crucial to maintaining efficiency and effectiveness. Starting with the basics usually requires PMS, CMS, and payment system connections.
5. Channels and More Channels: Marketing channels combined with purchase channels could create an unwieldy array of guest experience paths. Be focused on your solution, or do your best to simplify points of interconnectivity.
6. Partner Ecosystem Race: Despite the number of solution providers in this marketplace segment, partner ecosystems are less emphasized by marketers at the moment. However, there are myriad shiny new objects, and some of them work quite well.
7. Certainly the Cloud: Cloud solutions are often emphasized or required in today’s system RFPs due to the benefits they produce for businesses. A level of simplicity is usually found with this form of ecommerce system when introducing it to other cloud-based systems.

Questions for the Future

As ecommerce continues to change at a rapid pace, here are a few questions you will want to ensure your company is planning to answer.

1. How will AI assistants and conversational interfaces change the way guests find and book directly with you?
2. Which amenities, packages, and add-ons should be sold online, and at what point in the booking path?
3. How will you keep content, rates, and availability consistent across your booking engine and every other channel?
4. What share of bookings should come through direct channels, and what will it cost to shift more business there?
5. How will payments, loyalty, and guest data flow between your booking engine and the rest of your technology stack?
6. What capabilities should your company add to create a competitive advantage in ecommerce over the next few years?

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About this Report

This document reviews 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 and is assisted by AI.