The underlying mental approach is either consumer-centric (consumer value proposition first, then campaigns and intermediaries, and finally about the hotels/chains) or inwardly focused (hotel/chain first, intermediaries second, and consumers last). Attribute based-shopping takes the consumer-centric approach to its logical consequences.

That article concluded with the significant implications of committing to an attribute-based shopping future:

• Big impacts in marketing and revenue management
• Fundamental changes in PMS and CRS systems
• A massive expansion of CMS structured data to characterize all salient aspects of each available room, property, and available experiences
• Changes to traditional revenue management and marketing practices

Traditionally, large properties with numerous different attributes model the complexity of choices via combinations of rate plans and room types. In the worst case, they could end up with as many room types as they have room numbers. When multiplied by rate plan, occupancy and date choices this could create a computational problem that makes systems slow, expensive or both. In an ABS future, exact rooms matter far less. A structured awareness of all attributes applicable to each room lets hotels maximize both consumer satisfaction and revenue by allowing guests to select what they value and pay accordingly.

It’s important to keep in mind the distinction between hard and soft room attributes. Hard attributes require construction to become available in a room that originally lacks them. Hotels must inventory them with care. Soft attributes generally don’t need to be inventoried. They can be applied to any room depending on revenue management decisions. Hoteliers on the road to ABS must comprehensively inventory all hard attributes of interest, associate them with specific rooms and ensure that both the transactional systems and the CMS reflect that in a structured and room-dependent way.

Hotel systems need to be significantly modernized in order to start selling collections of specific guest-desired attributes instead of rooms and rates. So, let’s turn to the journey toward attribute-based shopping, and to highlights of the key system architecture and business practice changes needed to enable greater profitable growth along this path. To enable true ABS, both the PMS and CRS systems need to make way for a modern shopping, distribution and inventory platform (SDI). The SDI platform should be both room-aware and specific attribute-aware. It must be able to transact at internet-scale in sub-second speeds. This requires changes to traditional PMS and CRS systems.

Traditionally, room-awareness rests with the PMS while CRS systems are only availability-aware (i.e. counts of what’s available, but not which exact rooms those are). To implement ABS properly, the PMS has to surrender a number of functions. The CRS is either subsumed by an SDI platform or lives on in a reduced capacity.

A number of major vendors have claimed (to different degrees) to be working on changes to enable ABS. One key caution for hoteliers is to make sure that any RFIs/RFPs they conduct reflect the key needs to enable ABS in addition to all the usual legacy topics. Some vendors are farther along the path than others. And few use standard nomenclature in the ABS realm, so caveat emptor!

• Choices may vary greatly between single properties, single brands with multiple properties and global chains with multiple brands. We’re encouraged by evidence of progress we’ve seen among several players:
• Amadeus, which has made by far the largest investments in cloud-based hospitality solutions
• Sabre Hospitality, which is working to converge its cloud CRS and PMS solutions
• Shiji, which already offers an impressive array of hospitality technology products and is rumored to be making significant investments in new product engineering,
• Mews Systems, which offers a leading cloud-based PMS suitable for independent properties and smaller hotel groups and just received €29M from Battery Ventures

But what about all the other key systems? ABS will require plenty of new technologies in other areas. Revenue management will need to move from yielding room types and rate plans to yielding a much greater number of individual attributes and their potential fulfillable combinations. Two companies that have always impressed us in this area are IDeaS and Revenue Analytics. Both are progressive companies with an eye on the future and an excellent understanding of what the full promise of ABS will require from revenue management systems, content management, data management and data science/machine learning. This latter in particular will be key to automating the ongoing offer optimizations that go hand-in-hand with ABS.

Room selection is one aspect of ABS that’s surprisingly easy. Leading chains like Hilton already offer that option. However, when it comes to consumer satisfaction and hotel revenue maximization, encouraging specific room choices can easily lead to suboptimal room assignments. Unless the hotel charges for it, this option will likely hurt revenue.

The promise of ABS is actually the opposite of this case: ABS-driven shopping and room allocation lets hotels maximize the aspects that each individual values most. Attributes that individuals are neutral or negative about can be sold to others with different preferences. The hotel ends up making significantly more money by letting guests express preferences they’re happy to pay a premium for. Guests end up much better served without added property costs.

In simulations, the impact to gross revenues is materially positive. The prerequisites are nontrivial and will be within much easier reach of hotels that start the journey now and begin to prepare what’s needed:

• A modern Shopping, Distribution and Inventory platform (SDI)
• CRS and PMS systems that are either part of that platform or can work with it
• New content management systems with structured attribute data
• Modern data management platforms that allow for machine learning
• And last, but not least, attribute-oriented revenue management systems

The economic opportunity is large enough to dwarf the needed investments. For further details and a sense of how the economics play out, see What does attribute based shopping (ABS) mean for hotels? by George Roukas. Of course, ABS might not be advisable in extreme cases where a property has nothing to offer but a single room type with an invariant set of attributes and no variable soft experience elements. But at that point we’re really talking about a jail or hospital and the owners are probably not Hospitality Upgrade readers.

https://www.hudsoncrossing.com/attribute-based-shopping/

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