June 22, 2018
Fireside chat with Mike Ford
Integrations are a big headache for us at Pace. Hotels want to use our solution but connectivity is holding them back. Which is why we’re so excited about initiatives like SiteMinder Exchange. To learn more, I sat down with Mike Ford, the CEO of Siteminder, at HITEC Houston to understand their strategy.
How did SiteMinder get started? What were its origins?
SiteMinder began life as a channel manager, at a time when the OTA distribution space was quite chaotic and no one had yet cracked the code to getting all their rooms up on those OTAs at once – and getting reservations sent back to them. As a hotel, it meant that every time your availability changed on one OTA, you’d have to update all the different extranets to make sure your availability was in sync and you didn’t get overbooked.
Together with my cofounder Mike Rogers we built a system that allowed hotels to set and forget their rates and inventory. What we created not only allowed hotels to avoid overbookings but saved them tons of time and meant hotels could get on to more channels and have a better chance of being seen by the millions of travellers planning their trip through the Internet.
The business model was unique. Where others were charging fees for each transaction, we said hotels could pay us just a low, flat subscription fee every month. It was the beginning of Software-as-a-Service in hotel channel management and it was about making sure hotels were rewarded with revenue for filling their rooms.
That was 12 years ago - how did you go from there to the broader solution you are today?
Our first product after the channel manager, TheBookingButton, was borne from the fact that although third party sites were important to hotels, so, too, was direct distribution. Not long after we launched with our channel manager, we saw the need to help hotels focus on their own website and to become bookable through that direct channel. So, that became our focus.
We initially looked at existing booking engines we could simply partner with, until we realised there was an endless list out there – and most weren’t very good. That led us to build our own booking engine in the end, as we felt it would be better for our hotel customers than partnering with solutions we weren’t entirely comfortable with.
Since then, of course, booking engines have come a long way and we now partner with dozens of all the top booking engines in the world. All part of why we’re now moving towards being a platform as opposed a solution provider.
And the next question, (of course), is what the next 10 years will look like for SiteMinder?
If I look toward the next couple of years, I think all the solutions we have at the moment are really core. Distribution will still be one of our core strengths and we plan to only build on that. I think we’re seeing shifts in the direct booking trend already, so that’s something to keep watch of, and obviously anything to do in the way of data – guest, business and market intelligence – is only going to grow from here on in.
Then, from there, I think it’s about giving hotels choice. To give hotels the ability to choose from best of breed solutions and seamlessly plug those into their infrastructure. Ultimately, this will lead to better outcomes for the hotel, whether it’s rate decisions, analytics or distribution decisions or whatever it may be.
Today hotels don’t have these choices. Integrations and weak standards are keeping them locked into a set of solutions. So that’s why we’re building SiteMinder Exchange - to give hotels a connectivity and discovery platform.
Platform means so many different things. What does it mean to you?
Yeah, platform is definitely one of those words that can mean so many things. What does it mean to us? Well, there is obviously the technical stuff, things like single-sign-on, the sharing of data between applications, and the centralisation of things like user management and business intelligence around a central core.
But equally important is discovery, which for a hotel means information and insights from different solutions and applications that allow them to be that much more informed, more strategic, more empowered. For a hotel, the role of a platform is really to blend different data sources and outputs so that the whole is ultimately greater than the sum of the parts.
The beauty of the platform is it offers you solutions you may not have ever heard about or considered before, and didn’t realise could be so valuable to you and your guests.
The counterargument to whole platform idea might be Shopify/Square in the retail world…
The environment for hotels is inherently so different to retail. There are so many moving parts and really complex needs that can be slow to address because of the way hotel technology’s evolved all of which, I think, plays to the idea that it’s really hard for any one company to do a great job in every area.
I think a more useful example to look at might be Salesforce.com. It’s one of the biggest, fastest growing companies in the world. It’s a real success story. But, at its core, it’s really just a database – and when you want to implement something cool, you’re going get something like Zendesk or some other solution and plug that into your Salesforce.com cloud.
Now, if you’re a competitor of Salesforce, think about how hard that is to replicate. So, that’s the analogy for me. There’s no way one company can achieve that focus in multiple areas over the next 10 years. To build something of tremendous value, you have to be focused. And our focus will be on the platform.
So, in terms of how you work with the PMSs, do you want to be a destination for hotels or a connectivity facilitator?
To be clear, it’s not about SiteMinder – we don’t need to be the centre of attention – it’s about connectivity and building the plumbing to enable new possibilities for all hotels.
So we will do what makes sense, for example, PMSs will have the ability to showcase applications on their own websites, for example. From there, if hotels believe it would be valuable to them to come to SiteMinder, they will. If not, they might not even notice us and that’s OK. Their PMS will provide the solution and SiteMinder Exchange will simply power the connectivity in the background.