In The Big Chair - Mike Ford of SiteMinder

Mike Ford, Managing director

SiteMinder is no longer a relative outsider in hospitality distribution - it's a serious player, with ambitions and opinions to match.

The man who helped get the business off the ground in 2006 has plenty to say to Kevin May about the direct-booking debate, intermediaries becoming tech vendors and his style as a boss.

First of all, what do you see as the biggest opportunity for growth in SiteMinder's business?

Great question – it’s actually a really big challenge. Part of the issue is to make sure you don’t grab too many opportunities, because there are plenty of directions a company like ours can take.

One of our natural and obvious opportunities for growth is to continue our geographical expansion efforts. We are very young in some markets, so feel that we still have a tremendous growth opportunity by opening up in new regions as well as cementing our position in existing markets.

Growth opportunities also come from our own product evolution. We started life as a channel manager tool but we have evolved into a much more sophisticated guest acquisition platform which offers hotels the ability to connect a multitude of products – ours and our partners’ – directly into their PMS or CRS.

The ability to play this role is exciting, particularly as we see a future of tightly-integrated products from many different vendors operating in a way that delivers a seamless and intelligent experience to the hotel. We have nearly 30,000 hotel customers who really benefit from tight, seamless integrations that actually work, so there is a big opportunity in them adopting more product and maximising their ability to acquire guests.

A further opportunity I am quite bullish about is the advent of newer distribution channels that are emerging strongly in a number of areas and which empower a more direct relationship with the customer. Google is doing interesting things in the travel space and around direct hotel bookings. I see Facebook getting in on the action and then there is TripAdvisor and the other meta players, amongst others.

Yet with opportunities come challenges. What about those?

From a technology standpoint, the obvious challenge is to make sure you throw your resources at the right opportunities and you don’t spread yourself too thin – balancing focus against opportunity is important. For example, we are very focused on our platform getting the guest to the hotel, and the hotel maximising revenue on the guest’s way in. We aren’t focused on the in-stay piece.

From a geographical opportunity standpoint, each market has its challenges. It takes time and money to break into new ones, and English isn’t always the dominant language. You need to understand what you are signing up for and commit to that.

So, when we enter a market, it’s important to us that we do it properly. For example, we put language speakers in customer support and sales and we fully translate the product into the local language, including the hotelier view. We also deal with new, required features or modify existing ones, such as local tax or service charge models that are particular to a certain market.

That’s crucial, and it requires commitment.

How difficult is it to grow your portfolio of properties? And how do you overcome that?

We are one of the few hotel technology companies that have worked out how to go to market in the independent hotel space at scale. Many companies are effective in addressing the chain layer, and while we have many chains as our customers and have a strong chain offering, we have also worked out how to onboard and sell to independents efficiently.

I should point out, though, it’s not just our go-to-market and sales and marketing capability; our partners and hotel customers generate a lot of business for us as we have large contingent that love our product and services, so we’re happy to refer other customers as well.

What call are you getting from your intermediary partners to include more private accommodation?

We are definitely watching this market closely and partnering with various niche channels that service this market. It hasn’t been our primary focus to date, but we have connectivity into the major players. Expedia and Booking.com also have a real focus to challenge Airbnb in this space, and we already partner with them by virtue of our business.

And are there any inherent difficulties with moving in that direction?

It’s a totally different game from the perspective of who our customer is in this space. You are not selling to the property owner; you are selling to the real estate management company that has many of these. Private accommodation has different challenges like property access, external cleaning services amongst others.

We have seen some of the giants of the online travel agency world offer B2B services to property owners. What do you say to those who see this as a conflict of interest?

I would agree with them. The OTAs are diving into B2B tech in a big way. I don’t think it’s good for properties at all. OTAs also risk fraying relationships with their key suppliers by pushing hard in this space as they are biting the hand that feeds them.

From a hotelier’s point of view, it seems attractive, but I think it’s dangerous for them to align everything with one OTA as they are diminishing their bargaining power and giving away information that ultimately allows the OTA to take more of the hotel’s direct business.

The OTA tech race was inevitable. It’s all about controlling the hotel supply and pricing, and trying to keep it from the other guy.

We don’t like it, but there are many hotels out there that are clued up enough to realise that the only way to go is with an independent technology platform. The last thing hotels want is a world where the only place you can get your tech from is an OTA – that’s not a good place.

Presumably, you have a fairly obvious point of view on direct versus intermediary discussion that tends to come in waves every few years. But do you sympathise with the other argument?

SiteMinder is a guest acquisition platform aimed at enabling hoteliers to maximise their success within the bounds of their revenue strategy. Our job is not to decide on what strategy is best for hotels; it is to provide the technology that enables and automates their strategy.

So if their strategy is to get most business through OTAs because they believe direct is too expensive, then we have them covered. If they want to optimise their direct marketing and booking capabilities, we have them covered as well. My view is that direct GDS, OTAs and other sources should be used in a blended way that maximises the outcome for the hotel and best fulfils their revenue and profit strategy.

We are committed to all our partners – the OTAs, direct booking partners, GDSs, social, reputational, revenue management and corporate – as well as our own direct web capability and direct booking engine for this very reason. Anything that can drive bookings, we want to provide to the hotel in the best and most effective way, whether it’s through booking aggregators, our integrated technology partners or our own products.

Within the context of all of this, a hotel can very easily and inexpensively access technology that will maximise direct bookings without too much effort.

So, they should never neglect their chances of getting direct bookings, but equally they shouldn’t put all their resources into direct if there are other channels that can get them those bookings more profitably. Hotels should look at OTAs as another marketing and sales channel, not as the only solution and not as an enemy.

If it works for you, it’s your friend and hotels should treat it as such. The most important thing is that once a hotel does get a guest, regardless of the channel that guest came through, the hotel makes sure it captures the guest’s email address and preferences so they can win them back directly in future.

What about you - how would you describe your management style?

I’d like to think I’m transparent and approachable. I do, however, expect a lot out of people and I’m a stickler for detail. So when I get presented with uninformed or incomplete thoughts or solutions, the meeting doesn’t tend to go well.

Generally I like to engage with any staff member who wants to share an idea or raise a concern – I’m not big on titles and I believe brilliance can come from anywhere in the organisation. I’m not a fan of micromanagement, so it’s great when I see people owning and running with things, and I see so much of that at SiteMinder.

Can you identify your single biggest achievement in your time at SiteMinder?

No single thing stands out as a beacon; it’s hundreds of small wins that really come together to get you to particular milestones. If I have to single one out, it is probably when we landed our first hotel chain and integrated it seamlessly with their OPERA property management system.

That started a legacy of success in the chain space where we have very successfully provided tight, two-way integration solutions between PMSs, CRSs and booking channels for many years now.

CEOs always say it's their people, customers or technology that are the critical components of their business. What comes after those?

I think what’s really important, and possibly even comes before those, is really deep conviction and understanding of your value proposition and your path forward, including how you plan on commercialising a business model that will ultimately be self-sustaining.

Even with the best people, customers and technology, if your strategy, your market fit and your path to commercialisation is not clear, you may still fail. In a business like ours, you are constantly iterating on these factors because as you evolve and as the technology paradigms evolve, you are constantly needing to reinvent and innovate or you risk becoming redundant quite quickly.

Hotels should look at OTAs as another marketing and sales channel, not as the only solution and not as an enemy.

Mike Ford

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And, finally, what assumption about your company, the industry and travellers have you later discovered to not be true?

I expected the technology in our space would evolve more quickly than it has and particularly the level of integration between players. Selfishly, of course, this is good for us as we remain one of the companies in the space that continues to innovate and we feel we can make a real impact to help players in the industry integrate more effectively. But nevertheless I expected the pace of evolution would have been quicker.

I thought some of the bigger chains would have reacted more quickly to the changing technology landscape and break some of their internal IT fiefdom in favour of better commodity technology. The smaller chains and independent hotels are definitely leading the way in this respect.

And, I thought travellers would have moved away from traditional travel agencies faster than has occurred, but some bricks and mortar travel agencies are thriving and our GDS business continues to be very strong.