Hotel aggregators are complex pieces of technology that create huge efficiencies in the travel industry. Anyone looking to sell discounted hotel rates from more than one supplier needs a hotel aggregator to collect their inventory, map it, analyze it, and return results based on a given query. The more that a hotel aggregator can automate in the very tedious process of managing discounted hotel rates, the more valuable the technology is. When deciding whether to buy this technology or build it in-house, there is a lot to consider.
What is a Hotel Aggregator?
A hotel aggregator is a piece of technology that searches several different hotel room suppliers for available hotel rooms and returns them in one search query. It powers a hotel booking engine.
How Does a Hotel Aggregator Work?
Each hotel supplier—be it a retail website, online travel agent (OTA), global distribution system (GDS), or wholesaler—has agreements with individual hotels allowing them to sell a certain number of rooms at a certain price. The price of a given hotel room varies depending on the supplier’s agreement with the hotel. Some hotels act as their own supplier and offer agreements directly with retail websites.
A hotel aggregator searches several suppliers for hotel rooms and, instead of returning multiple results (one from each supplier) for one hotel, it returns one result.
Similar to hotel aggregators are hotel consolidators, which provide hotel aggregator technology AND the supplier relationships. Alliance Reservations Network offers its partners access to both its hotel aggregator technology and its inventory of hotels through Alliance’s own supplier relationships.
What Does a Hotel Aggregator Do?
A hotel aggregator can perform a number of tasks that make selling hotel bookings easier and more profitable. When comparing options, the following features are important to consider.
One of the primary functions of a hotel aggregator is mapping hotels and their room options. Mapping is the process of matching each supplier’s hotel content to the right hotel location and choosing which content to display to the end user.
Mapping exists because each supplier’s information (pictures, descriptions, contact information, etc.) on a given hotel is slightly different than information provided by other suppliers. Each supplier took their own pictures of the hotel, its rooms, and its amenities, and each supplier wrote their own description of the hotel. They can even have differences in the addresses—one supplier may have spelled out “Street” or “Avenue” while another supplier may have abbreviated those words. Mapping is the process of merging these differences and picking the best representation of the hotel data, pictures, and amenities to show to the end customer.
Alliance Reservations Network has mastered hotel mapping. They have connections with almost all hotel suppliers, and have mapped over 750,000 hotels.
Hotel aggregators should manage complicated pricing rules that exist in the hotel retail industry.
For example, Supplier A provides hotel rooms from a particular hotel at $100 per night, while Supplier B provides hotel rooms from the same hotel at $110 per night. The cheapest inventory is from Supplier A, so rooms from Supplier A will be shown in search results in the hotel booking engine. However, if Supplier B will give a $20 discount on rooms at that hotel after 100 rooms have been sold, then it might be beneficial to sell Supplier B’s rooms for a different price up front and recoup losses on sales over 100 rooms.
Wholesale Markup, Commissions & Fees
In addition to calculating pricing, hotel aggregators need to calculate any wholesale markup, commissions, and fees on each sale. Markup, commissions, and fees can vary depending on the retailer’s business plan and can change over time, so that information needs to be customizable. A hotel aggregator must be able to calculate this information using variable inputs and complex rules.
Who Needs a Hotel Aggregator?
Anyone who wants to sell hotel rooms from more than one supplier needs some sort of hotel aggregator.
Each website that offers hotel bookings to the public needs an aggregator of some sort. Some websites negotiate their own contracts with hotels directly and populate their aggregator with direct sources. Other websites work with a variety of wholesalers and other suppliers and pull inventory into their aggregator from those suppliers.
However, there are many different types of companies that can also benefit from offering discounted hotel rates.
A hotel aggregator or hotel consolidator is a force multiplier for an event planner. Part of planning events is arranging for attendee lodging. When done manually, this is an extremely time consuming task. Procuring housing for a large event requires brokering special “event rate” agreements with multiple hotels near the event venue, disseminating the available list of rooms and their rates to all attendees, and managing the reservation process so that event attendees can take advantage of the event rate.
Event planners who have access to a hotel aggregator can present their list of hotels and their rates in a booking engine where they can collect reservations digitally. Access to an aggregator that also has inventory prepopulated saves a large event planner a huge amount of time in the RFP process.
Get more information on event planning solutions.
Employee Benefits Company
With a hotel aggregator or a hotel consolidator, employee benefits companies can offer travel discounts as part of employment benefits packages. Adding benefits to their employee packages can make them more attractive to companies who do not want the responsibility of managing benefits.
Employee benefits companies have special incentives to offer travel. They generally have a large number of potential travel buyers, which means they can enjoy better hotel rates from suppliers due to economies of scale. Also, because their pool of potential buyers is an exclusive group—exclusive in that the benefits are only offered to people employed by the clients of the employee benefits company—they qualify as a closed user group. In the hotel industry, closed user groups can offer even better hotel rates than public retail sites.
Professional organizations, fraternal orders, and other large member organizations offer benefits to their members in exchange for their dues. Offering discounted hotel rates can be a benefit that keeps members renewing their membership. They qualify as closed user groups as well, so they can offer better-than-retail rates too. Learn more about providing value by offering travel benefits.
Buying or Building a Hotel Aggregator
When weighing whether to build a hotel aggregator, there are a few things to consider.
Hotel aggregators are extremely complicated.
Mapping content/images/amenities, pricing, commissions, markup, and fees, are just a few of the features a good hotel aggregator should have. A hotel aggregator also needs to be able to connect seamlessly into every supplier system that pushes inventory to it. Each supplier’s system is different, so each connection needs to be custom-built.
These complicated systems take a long to time build.
Considering each supplier connection needs to be custom-built, and that’s just the beginning of building a hotel aggregator, it’s easy to see that the process of building one from scratch can take a long time. It can take years, and on that time table, the technology used when starting to build may be obsolete when the project is ready to launch.
Building a hotel aggregator can be very expensive.
A complex system that takes a long time to build will require a significant investment. It can cost millions of dollars to build a hotel aggregator, and even more if it needs to be built in a shorter time frame.
Supplier relationships are expensive too. Establishing a relationship with one supplier involves a deposit (upwards of $10,000). Multiply that by the number of supplier relationships desired and add that to the cost of the build.
Work With Alliance Reservations Network
Alliance Reservations Network’s hotel aggregator technology is extremely advanced and hugely customizable. As a result of years of experience working in the industry since 1995, this hotel aggregator has many customer-centric features and has mapped over 600,000 hotels.
Alliance also maintains relationships with many suppliers. Because of the large volume of business it channels to its partners, it can offer economies of scale on hotel rates that few can match. Alliance’s partners do not have to establish relationships with their own suppliers, meaning they can save on startup costs. And getting started with Alliance’s hotel aggregator takes a matter of months—not years.
For more information on how Alliance can power your hotel booking engine, contact us.