Tech provider SiteMinder is the latest firm to make it easier for smaller hotels to adopt new tools from other third-party vendors to manage their properties. The trend could give the little guys more weaponry in online sales — and help SiteMinder become more valuable for hotels.
SiteMinder, one of world’s largest connectivity services for hoteliers, has been long associated with helping hotels list vacant rooms on online agencies such as Booking.com and Expedia. But it’s more recently been broadening its ambition to offer a variety of other services, from managing data to providing data insights.
Customers that manage their rates, room availability, and reservations between 300 property management systems and 400 online booking sites can now have their reservation data pushed to the applications they choose.
Broader Connectivity Trend
SiteMinder joins a cluster of so-called connectivity hubs that make it easier for hoteliers to transfer information between their core operational and front-desk systems and third-party vendors.
Some backstory, first: Many hoteliers know that better technology solutions for running their operations have debuted. New tools include data-backed rate-setting software, automated upselling tools, guest messaging software, guest review management tools, electronic door locks, smart thermostats, and airport transfer booking software.
Many smaller hotel companies and independent hotels, however, are intimidated by the technical work involved to plug into these new services. Plus many of the property management systems they use can’t keep up with the pace of integrations.
Aiming to address this problem, several tech vendors are adding connectivity layers. Metaphorically, these are like travel power converters or universal adapters that enable a device on one electric current to work on another in another country.
Two startups, Hapi and Impala, have emerged with the dedicated job of being like a universal adapter between hotels and hundreds of popular vendors in the market. Plug in once, and you can access any of the others you like.
Several other property management systems, such as Cloudbeds, have been making it easier for hotels that use them to manage their properties to also connect to an array of other tools.
Oracle Hospitality and Protel are some of the property management systems that are creating their own app marketplaces and aren’t yet participating in SiteMinder’s offering. Oracle Hospitality, which offers a widely used property management system, is working with Hapi.
“If you’re a smaller PMS [property management system], you face a never-ending list of applications that they need to connect to,” said Dai Williams, chief growth officer of SiteMinder.
“These systems don’t know what the hotel appetite is going to be for these services and what the return on the research and development for all these apps will be,” Williams said.
Addressing this issue with a workaround, about 80 property management systems today plug into SiteMinder Exchange, a connectivity hub that can push out more data than reservation data to apps.
“Property management systems just need to build one pipe so data can flow into SiteMinder Exchange, and then we’ll connect to all of the apps on their behalf,” Williams said.
The systems can do the same via the standard SiteMinder platform, but less data will go through that path. The Exchange path lets hotels push deeper guest information to apps, for example. That means hotels can create upselling campaigns via, say, Oaky or message their guests via, say, Bookboost or automate the airport transfer process via, say, Welcome Pickups.
SiteMinder’s solution won’t likely appeal to the biggest hotel groups and chains, which can instead afford to plug in to each point solution without needing a layer to manage it.
Beyond Channel Management
The vendor connectivity hub service is free for users of SiteMinder, which primarily makes revenue by charging a monthly fee. The startup generates about $70 million ($100 million Australian) in annual recurring revenue, the privately held company said in May.
SiteMinder helps hoteliers small and large, from independent motels to giant hotel groups, distribute rates and inventory on online channels such as Wotif, Meituan, and Trivago. In the past year, more than 35,000 hotels have used SiteMinder to generate more than 87 million reservations.
While online travel agencies let owners upload rates and inventory to online agencies, many hotels can benefit from using a so-called channel manager tool to automate the steps involved.
For example, smaller hotel companies often rely on manually capturing and entering data. That means that an online travel agency booking might sit for days before an employee puts it into the hotel’s property management system or central reservation system. SiteMinder automates the process to prevent overbookings.
Other so-called channel managers compete to offer similar services, including RateGain, which is backed by private equity firm TA Associates, and Derbysoft, which counts many of the world’s largest hotel chains as customers.
To maintain growth amid a competitive market, SiteMinder is looking to diversify into other services, such as a hotel website builder tool and a global distribution system connection that lets hotels distribute rooms to travel agencies.
In 2014, SiteMinder, founded in 2006, raised a $30 million Series B investment round led by TCV (Technology Crossover Ventures), a venture capital firm that made early bets on Netflix and Facebook.
TCV has had its eye on travel. In November 2018, TCV led a $120 million financing round in Sojern, a travel technology company focused on digital marketing. TCV last year also invested in Klook, a booking agent for sightseeing and experiences.
Photo credit: A photo of the Casa Andina Standard Nasca in Nasca, Peru. The hotel chain uses SiteMinder for help with online distribution. SiteMinder has launched an app store to help smaller hotels adopt new tools from other third-party vendors to manage their properties. Casa Andina Standard Nasca