Dynamic Hotel Sourcing – Time With Tom
Tom Ruesink interviews Steve Reynolds, CEO of TRIPBAM to discuss Dynamic Hotel Sourcing in the travel industry.
Check out TRIPBAM below: https://www.tripbam.com/main.aspx
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Welcome, everybody, to another edition of Time with Tom and with the time with Tom, we just do video snippets with industry thought leaders. My role as I head up a product strategy and marketing for Cornerstone Information Systems. And today I’m glad to be joined by Steve Reynolds, the president and CEO of Bam! And today we’re going to talk a little about dynamic hotel sourcing. And so thank you, Steve, so much for joining us today, Chris.
You’re welcome. Yeah, thanks for having me.
You bet. And so dynamic hotel sourcing. Can you just for those who are not familiar with it, can you give kind of a quick overview of what it is?
Yeah, it means different things to different folks. I mean, we’re not necessarily talking about dynamic rates, which is what most folks kind of think of it. It’s more of, you know, the historical legacy process have been very batch oriented, which met once a year. Every other year. I take a deep review of my hotel program. I look at where we’ve got volume, where we might need new discounts. I think about which discounts are performing well.
I benchmark a little bit. I kind of go out, do my bidding, get it all in place, do an audit to see if it’s loaded correctly, and then I forget about it for the rest of the year. And so what we found is hotels are travelers are a lot more dynamic than that. I mean, yeah, they probably do go to similar destinations, but, you know, the quality of the hotels tend to change. Locations need to change.
You’ve got hotels that play games with availability that need to be removed from the program. You’ve got discounts you negotiated that are no longer valid. So if you really want to maximize the savings, it just needs to be more dynamic. You need to be on top of it on a much more regular basis and have the ability to source deals and renegotiate deals, you know, as needed. And so most travel managers don’t have resorts to do that in any meaningful way.
So with the usage of technology and applications and such and benchmark data, we feel like we are now providing a platform that makes it a lot more easy, simpler, real time dynamic, so to speak, so that someone can stay on top of this daily, weekly, monthly, however often they want to. And it just ends up being you get a lot more value from your hotel program.
So it’s almost like a continual a little more of a continual sourcing where if something is falling out or something, you’re seeing something. You’re actually reacting to it more and you’re in real time as opposed to the yearly procurement. Exactly. Yeah, it’s always on real time sort of hotel program audit, and what I mean by that is, you know, we’ve got all these dashboards and such hotel intelligence and then our daily rate shopping and our smart sourcing solution where we identify easily, we believe, for opportunities where here’s a hotel not performing well.
You don’t click a button. Let’s renegotiate the deal. Here’s a market where you’ve got a lot of travelers staying in a non-preferred hotel. And if you had a negotiated deal with that hotel based on industry benchmarks, we believe you could save ten thousand dollars on an annual basis. Whether it might be click this button, let’s get a deal in place. And then thirdly, for our consulting clients, they have a lot of project work and so they get sort of ahead of time.
We need a hotel in downtown Dallas for Star near this location. Would you go and get one for us? And so we make it real easy to see all the hotels that are performing well in that market and then they can click a button and get a deal in place so that they immediately save the money. It’s not after the fact. Right.
Which is kind of how it’s been working for the past. Evergreen Yeah.
And so from a data standpoint, I’m a data geek at heart. And so what types of data or data elements are how are you using data to be able to do this more effectively than just your traditional sourcing?
Yeah, I mean, just good timing on the question. Just because we just launched a new dashboard, which is more holistic around across the whole industry. But, you know, we’ve got over the last eight years, we’ve grown significantly. We’ve got about 2000 clients. We’ve got 50 of the Fortune 100. So we’ve got a lot of booking data specific to corporate transient travel in our system. We also have all the contracted deals that those clients have in place.
We know which hotels are performing well and which ones aren’t and so on. So the data is used in all kinds of different ways, sort of starting at a very high level. We can tell you by market, by city, by hotel, what has covered DUNTA rates. You know, this particular market is down 37 percent. Volume at this particular hotel is off by 85 percent. You know, it sort of gives you an indication of what kind of new rate you should be able to get if you renegotiated deal with that property.
So that’s one example. We look at chains and brands to see who’s kind of a winner and loser right now, you know, in the shift of market share. So, for example, a lot of the volume is going down market. You’re seeing a lot more bookings in two and a half to three star hotels rather than the four to four and a half. So that means the Hiltons and the guys that have those downmarket brands are actually getting a lot more share than they have in the past.
So that’s kind of a high level view. But then you get into a client specific perspective where we can tell you you’ve got a rate of one eighty nine at this hotel. Well, everybody else has a rate of one sixty nine. And you actually have more volume going into that property and into this market than the other companies of similar size.
So you should have a better deal. Right. It’s those kind of insights, I think, that really helped get that incremental value from a hotel program and say, look, you’ve got 189, everybody else is 169. Based on your volume, you should be 149. Let’s go get that deal right now.
And then as far as, you know, feedback and reaction from the industry, I mean, what’s been the reaction from buyers?
What’s been the reaction from hotels and chains to it’s a dynamic sourcing specifically. You know, buyers seem to have really adopted it. Well, I mean, it was surprising. You know, we thought, look, let’s just have a way to do incremental sourcing and then you can use your legacy process, whether that be the saber solution or landing solution, you know, when the time comes. But fairly quickly and partially due to covid, they said, look, we want to migrate to this 100 percent.
I don’t want to have to go back to that legacy process. So we had to add somewhat of a batch capability to transition their thousand hotels off the old way over to new, and then they incrementally sourced from that point forward.
So that was kind of the big surprise, you know, the acceptance, the adoption, whatever. I think the industry is hungering for something new and different. The properties have been extremely receptive to it. I mean, the average discount we’re getting, you know, is around eight percent on a dynamic deal, equivalent on a static, you know, as compared to what the chains have been offering, which is around a five to six percent discount. So the properties are all on board.
They’re now calling us, asking and how they can get in the program, how can they get promoted, you know, and so on.
The chains have been a little bit mixed in that they’re concerned that we’re going to go around them. And to be honest, we don’t care. I mean, we don’t have a dog in this fight. If the travel manager wants to go direct property, they can if they want to go to the chain, they can. If they want to go to both, they can all. It depends on I’ve got a bid, where do you want it to go?
And we give them the ability to send it, you know, to these different folks how that’s all going to get worked out. You know, I think time will tell. Some chains are on board wanting. Work with us providing APIs so that we can feed it directly in the system. Others are a bit more standoffish, saying we really don’t want to go into the properties at all. And I’m like, look, call the buyer, go talk to them.
We’ll do whatever you whatever you want they want us to do. But I think over time, you know, they’ll be APIs available to us that we can poke this deal directly into the system, the PM’s, the CRC and so on. And it can we can automated end to end. And at that point, you know, it really doesn’t matter whether it’s exciting stuff.
Steve, I’ve always enjoyed talking with you. Definitely an industry leader, an industry disrupter in the most positive way. And, you know, I always enjoyed the conversation. Now I always end time with Tom with some sort of fun question. And it was going to be something about, you know, crazy stories about teachers or classmates or things. But you’ve got a deer behind you that in the picture here in the video that that has a Hawaiian lei on a captain’s what’s what’s the story with the deer behind you?
I got to ask about that. Yeah.
So I inherited that from my grandfather. I did not shoot that deer. Let’s first of all, I’m not a hunter by any stretch. The picture below it is actually the picture of my grandfather with a whole bunch of other folks. Well, you know, the deer is in that picture. And so, you know, I put it up there and then it’s been on these webinars and everybody seems to ask, what’s the story behind the deer? So that kind of led to, all right, now I need to decorate the deer.
So I try to follow some sort of seasonal approach. I don’t know why I picked that Hawaiian lei and the ship for this for this particular month, but it’s time to transition it to you because you’re in Texas and I’m in Minnesota.
And if I were in Hawaii, that might make sense.
It might be time to go to Valentine’s Day or St. Patrick’s Day or something like that. But I’m going to try and keep it a little bit more up to date. You know, I’m kind of going forward, but it’s really funny how everybody wants to talk about that, dear, you know, on these webinars, you know, just ask questions about it.