The hospitality sector is currently undergoing significant disruption in terms of the product, industry dynamics and consumer trends, and it is happening in both the B2B and B2C landscapes. The pressure is on for the hospitality tech industry to keep up with this new world order.
Channel managers have emerged as vital part of the ecosystem, giving hotel owners or managers control over how the pricing and availability of their property (or properties) is (or are) presented to the consumer.
Italy-based Octorate is one of the businesses active in this sector, and claims that its tech backbone can work for single-owner B&Bs and multi-property chains alike.
Before the Q&A here's its 80-second elevator pitch:
What problem does your business solve?
Our mission is to simplify online distribution management for properties such as hotels, b&b, hostels and apartment, to provide a solution to control availability and special offers, pricing, minimum stay and much more. Our single interface is simple and responsive and can works with OTA,s GDSs, metasearch and wholesalers.
Our channel manager comes with a complete API package to help that integration.
We are connected with more than 120 OTAs and we keep integrating new channels every month. We also make partnerships with online payment gateways, PMSs and other hospitality service providers.
Names of founders, their management roles, and number of full-time paid staff?
Fabrizio Scuppa founded the business in 2015 and is the CEO of Octorate. Today the team is composed by 16 people.
Funding arrangements?
As the first Italian company specialized in software solutions for accommodation properties, in August 2015 we received a funding round of €500,000 from Venture Capital P101 led by Andrea Di Camillo, an early investment specialist for digital market, and Marco Corradino, founder of Bravofly and business angel.
We have used the funding to expand the team, expand into Central and South America and develop an iOS and Android apps so that hotel owners can access our system from their smartphones when they are out and about.
Revenue model?
The channel manager has several functions and its cost varies according to the number of channels connected. Our model is pay-as-you-go, the customer makes payments on a monthly basis without any contract or obligation. As a freemium service, Octorate offers an advanced booking engine that can be integrated inside your own website.
Why do you think the pain point you are solving is painful enough that customers are willing to pay for your solution?
The main goal of a channel manager is to make hoteliers self-governing when managing all distribution channels online. Every extranet not only has its own number of difficulties but also handling them requires a lot of time. Mistakes such as overbooking, coupled with the waste of resources can hit a business' credibility with its partners and in the market, as well as impacting profits.
Our solution was made to help out hoteliers and tourism professionals minimizing efforts and maximizing revenue.
External validation?
Since the beginning of 2016 we became Preferred IT provider of Booking.com: it is a really prestigious award, given only to a select few partners worldwide. The standards to achieve this huge goal are very restrictive and based on reliability, efficiency and ability to implement updates and technological innovations on a short term.
More than 10,000 establishments use Octorate technology to manage online reservations generating a turnover of more than 500 million euros.
Tnooz view:
The hotel distribution landscape is a complicated and fascinating mix of two gigantic global OTAs whose advertising spend is greater than the GDP of many small countries, smaller OTAs, metasearch engines which may or may not be connected to the aforementioned global OTAs and hotel chains trying to sell direct to the consumer.
Throw in the GDSs and the bedbanks and the fully integrated tour operators and loyalty schemes and group leisure bookings and Airbnb and you end up with a delightful headache of potential and possibilities.
So where does Octorate fit in? As a channel manager it sits between the hotel manager and the guest, doing the dirty work of automating and optimizing tasks which are time consuming and prone to human errors. Without getting into a qualitative comparison of Octorate's pricing and product with its peers, it is safe to say that channel managers play a vital role in feeding that distribution ecosystem and Octorate has developed a strong presence in a relatively short space of time.