Tourico believes supporting hotel companies with the right technology is key to scaling up a high-volume, wholesale model in China.
NB This is a guest article by Ritesh Gupta, a reporter for China Travel News.
Global travel wholesalers work with hotels by pre-purchasing rooms. The model works for hotels, but wholesalers need to differentiate themselves from their competitors. This is as true in China as in mature markets and there are other factors in play, too.
Tourico believes that a well-rounded localization strategy with cutting-edge technology will help it succeed.
The company is opening a new office in Shanghai this August, which will be the technology hub for its operations in Asia Pacific. Staff numbers will double to 70 by the end of next year.
Intra-Asia business will be important, which requires a team with local understanding of the distribution and technology requirements.
Laser-sharp focus
Franz Nitz has recently taken over as its VP of sales and product for Asia-Pacific.
Nitz believes that Tourico’s expertise lies in bringing incremental value to its partners. “We don’t sell anything directly and do not own the customer," he says.
“We enable hotel properties to reach an audience they wouldn’t have managed to target otherwise, while remaining in control. Our extranet paves the way for hotels to improvise rates as well as control inventory and availability. Overall, there is increased visibility for a brand and there is also a strong billboard effect."
Tourico is data-driven: the team factors in historical trends and demand, predicting future fluctuations in key markets using proprietary predictive analytic software.
Using this approach means it avoids contracting hotels for which there will be no demand. "Our system is all about driving revenue and visibility that traditional marketing strategies and partners are unable to deliver,” Nitz explains.
The company recently signed a couple of deals that illustrate its confidence in its predictions - pre-purchasing 44,000 room nights at the Grand Hyatt New York, and 47,000 room nights at Hyatt Regency Paris Etoile.
It sold over 500,000 room nights in New York in 2014, and has 425 active hotel supplier contracts in Paris with an average of 2,100 rooms sold per day.
Association with Chinese partners
In China, Tourico is interested in 4-star and above, but not exclusively. Nitz says:
"We are not going to ignore a 3-star hotel in Guangzhou if we see an opportunity. We completely go by the indication that emanate from our data-driven process."
Nitz added that one of Tourico's differentiators when talking to Chinese hotels is the reach it can bring via its exclusive distribution partnerships with Emirates, Sams Club/Walmart and American Airlines, among others.
As mentioned, specific tech expertise is vital to Tourico's Chinese growth plans and it is setting up a team of engineers and developers in China.
"Even though there are standardized XML APIs, there is no one-size fit all phenomenon. Challenges in B2B distribution need to be countered at a local level," he adds.
And the challenges are more than just translation difficulties.
Its data caching technology is already helping hotels on pricing and availability, with listings and bookings powered with real-time data delivered, via the XML protocol.
Tourico is expected to approach China the way it has done other markets. The growing team’s main emphasis is going to be on a more diverse, unique and attractive hotel portfolio, backed by localized technology expertise.
NB This is an edited version of an article by Ritesh Gupta, a reporter for China Travel News. Click here to read the original version.
NB2Shanghai image by Shutterstock.