Imagine if Expedia and Priceline saw selling flights as an increasingly important part of their business and started offering airline IT solutions. That's what they and Trivago are essentially doing on the hotel side of the ledger, embedding themselves as hotel-technology providers. Now it has become a downright trend.
Trivago acquired Switzerland-based hotel-tech startup Base7booking more than five months ago, securing a 52.3 percent stake, and now it’s making a big push to get small and independent hotels to sign up for Base7booking’s cloud-based property management system.
The move by Expedia-controlled Trivago punctuates how online travel sites, including Trivago, Expedia and Booking.com, are no longer content focusing single-mindedly on their consumer businesses but to varying degrees are getting deep into the business-to-business side of the hotel business too.
Consider that Trivago’s Hotel Manager product already offered hoteliers marketing capabilities, especially when it came to improving performance through Trivago metasearch, and now Trivago is integrating Base7booking’s property management system, which enables hoteliers to manage daily operations, run reports, send invoices and enhance their digital and email marketing.
Expedia Communications Tool
Trivago’s announcement today about its acquisition of an integration of Base7booking solutions comes a day after Trivago parent Expedia, which owns 63 percent of Trivago, unveiled a tool that enables hotel properties to communicate with booked guests through an Expedia platform.
Expedia PartnerCentral Conversations, as the product is called, began a rollout in January to a limited number of properties in North America. It enables consumers to send a message to hotels through the ExpediaPartner Central platform at the time of booking, or hotels to follow up and message guests.
Expedia’s release of the tool, which the company says is now widely available to hotels throughout North America, comes on top of Expedia investments in hotel-communications’ apps Checkmate (6.1 percent) and Alice App (30.54 percent).
Booking.com Offers Digital Marketing and Analytics for Hotels
Meanwhile, the Priceline Group’s Booking.com last year launched a new division, BookingSuite, which offers digital marketing, website-building and a booking engine for hotels.
Priceline has made string of acquisitions, including Buuteeq, Hotel Ninjas and PriceMatch, over the last year to build up the BookingSuite offering.
Darren Huston, the Priceline Group CEO, said February 17 that the company is investing in cloud-based technologies to enhance its BookingSuite offering to hotels.
“On Just on BookingSuite, we feel really good about the business,” Huston told analysts in discussing fourth quarter results. “We don’t have any numbers to share for competitive reasons. But we’ve built up a team, we added a new product, PriceMatch, it’s a revenue management cloud-based tool, in 2015, which has been a nice addition.”
“But generally, the demand for the product is very high and it’s been as much an issue, how do we fulfill the demand for the team,” Huston added. “But I’m proud of where it’s at and we hope 2016 will be another big year for BookingSuite.”
Trivago’s Invitation to Small and Independent Hotels
Johannes Thomas, a Trivago managing director in charge of hotel relations, says only a minority of small and independent hotels use a property management system, and that the integration of Base7booking’s PMS with Trivago’s own hotel offerings will be an affordable solution for these hotels.
Hotels will be able to subscribe to the property management system on a monthly or yearly basis starting at 69 euros (about $75) per month at the low end.
The service is available in many of Trivago’s core European markets with plans to introduce it elsewhere in the future, Thomas says.
On the roadmap, too, is to incorporate Trivago’s new facilitated bookings for hotels into Base7booking solutions. These streamlined bookings, which don’t actually take place on Trivago, are Trivago’s differentiated answer to TripAdvisor’s Instant Bookings.
Much of Trivago’s pitch about the property management system and its other digital marketing tools is that they will enable hoteliers to “drive direct bookings through their own websites.”
Although hoteliers will be free to use the property management system to launch campaigns through channels of their own choosing, it is clear that Trivago’s goal and definition of direct bookings for hotels is for them to conduct marketing through Trivago.
Metasearch sites such as Trivago and TripAdvisor, for example, often offer superior economics for hotel distribution compared to the big online travel agencies although using them isn’t really “direct booking.”
Thomas says Trivago and Base7booking, with offices in Switzerland, Spain and Germany, will be working on plans to incentivize Base7booking property management system customers to distribute through Trivago.
Founded in 2008, Base7booking has about 35 employees who joined Trivago last year.
Like Booking.com and Expedia, Trivago’s moves are designed to make it an integral partner for hotel-distribution clients.
Photo credit: Trivago took majority control of Switzerland-based Base7booking in the third quarter of 2015 but announced the move on March 1, 2016. Pictured are members of the Base7booking team. Trivago