August 20, 2018
Third-Party Distribution for the Chinese Outbound Market
Push or Pull?
When evaluating what overseas hotels are doing for the Chinese outbound market, online content is one area that needs attention.
There are hotels whose operations have been adapted for Chinese travelers, from offering Mandarin speaking services to letting guests pay via Alipay and WeChat.
However, availability of tailored digital content – or even entry-level translations – remain an issue.
With more third-party hotel distribution companies targetting Chinese outbound, hotels really need to look at their content. Intermediaries expect static descriptions to be up-to-date, for rates to be dynamic, for rich media to work on Chinese platfroms,
An exec working in China explained:
“Alibaba and Tencent have already worked out entry points for travel’ within their respective sites. Technology has been streamlined so connectivity for hotels’ availability, rates and inventory isn’t an issue.
Language is also a significant factor in the decision-making process. Foreign hotels need to look at areas such as room description, details about the property etc.”
Keeping Pace with Developments
Foreign hotel companies are looking at offering real-time room availability, rates and inventory on emerging options such as WeChat’s mini-program as well as the Meituan platform, in addition to Fliggy, Ctrip, Qunar, Mafengwo etc.
For instance, Pan Pacific Hotel Group (PPHG) has been strengthening its presence on Alibaba and WeChat, in addition to working with other intermediaries including Ctrip. The hotel company recently worked on its WeChat mini-program. to provide travel guides and e-concierge services for Chinese users.
Cinn Tan, chief sales and marketing officer, PPHG, acknowledged that video content and live broadcast are trends that can’t be ignored.
Meituan and WeChat Open Up
Rudy Ruan, regional business development director at DerbySoft, noted:
“When a traveler is using one platform, and they don’t have to fill in any details for making a payment, hesitation is likely reduced which leads to a higher booking conversion.”
For example, users visit Meituan several times a day and its ability to cross-sell is resulting in more hotel and other travel-related transactions. Meituan sold over 200 million domestic hotel room nights in China last year, and foreign brands are starting to take notice of the opportunities
Recently, Club Med worked out a multiple rate plan for all of their resorts, and any user can book any hotel room with different restrictions (such as number of people stay, kids age range) for Club Med via the Meituan Travel app. With the Club Med mini-program, WeChat users can search, book and make payments online to 16 Club Med resorts across China, Asia and Indian Oceans via WeChat.
Both connections were worked out by DerbySoft.
However, Ruan added that its clients in China still see gathering the content from overseas suppliers as a hurdle. One challenge relates to formatting and the need to “normalize” the content for a B2B partner to use it.
“Even today, for most of the Chinese travel companies, they end up loading hotel content manually or (relying on) input from the Excel file. We often are asked by distributors how to get a hotel’s content from the API connection. Distributors can get some data from an API connection, but for static information, such as hotel introductions, room descriptions, facilities, hotel contact, and the like, they will transfer with an Excel file, spreadsheet or another format offline.
When distributors receive such information, they need to upload or input to their system (manually), it takes a long time to complete the same and there is a high cost”.
In response, DerbySoft has created a solution: MAX, a comprehensive content collection, management, and distribution platform for the hotel industry.
“We collect hotel content in different formats to transfer, store and distribute the content through an API. This way, distributors end up accessing the hotel content of different hotel chains through one single API. Through a combination of standard and custom APIs, XML files, spreadsheets, and thirds-party interfaces, DerbySoft manages to secure the content that distributors need.”
Elsewhere, wholesalers have been focusing on their own point of sale, trying to improve their HTML booking site with hotel description in Chinese language.
An exec in the space said:
“A wholesaler’s IT resource is predominantly focused on search and booking functionality while working with B2B partners in China. There are millions of searches a day. Video content is an IT-heavy resource and demands high store capacity plus wouldn’t be a cost effective option if a wholesaler has to shoot video, say for more than 20,000 properties.”
For their part, hotels are working on their content for the Chinese audience, but it seems the priority as of now is to make the on-property experience once they get there as comfortable as possible.
Various Delivery Methods
There are several industry standards that are being used today to exchange a hotel’s content.
Hotel companies and B2B partners also need to assess the push or pull delivery methods for both rates and content. These methods have their benefits and shortcomings.
So in case of the push method, it entails direct publishing of content when it is changed at the source, or pushes changes in batches. The load on the publisher’s systems is entirely under their control and this is termed as the fastest method of updating content. This method is also favored to address the CRS capacity issues, but the data may not be quite as accurate when the booking is executed.
Under the pull method, a hotel company has to handle large volumes of shopping messages. B2B partners have to get the data and may face a corresponding lag in message response times.
Josh Ziegler, CEO, Zumata, a B2B travel technology company, explained:
“(For companies) to work in China, the biggest issue is the language. Second issue is technology – the Chinese market predominantly favors the push-based model as opposed to the pull-based model. So, basically, if one can’t support instantaneous delivery of rates, then you would typically fall behind the competition.”
“In addition to featuring Chinese content in APIs, the speed and accuracy of these APIs also matters a lot. Chinese companies that use pull-based models often have sub-2-second cut-off time, which means anything that takes longer than 2 seconds will never make it into the result set. Price accuracy requirements are often in the 90%+ range, meaning rates can’t change frequently beyond the initial search response.
This is a high bar, and a difficult challenge to meet for companies leveraging only live pull-based systems.”