After an extremely popular post on Pegasus Solutions, to which I received so many emails, I am pleased to bring you the highlights of an interview between Hotel Insight and Andy Craddock, Senior Vice President Marketing at Pegasus Solutions.
Q: Andy, please introduce yourself to our readers and tell them a little bit about what you do.
I serve as senior vice president of marketing for Pegasus Solutions and Utell® Hotels & Resorts, where I’m responsible for all global marketing strategies and programs across the entire range of the company’s products and services. I joined Pegasus in 2000 after serving in various marketing leadership positions with STC, Nestle, Embassy Hotels, Jarvis Hotels and Best Western. Currently, I’m based in the Pegasus Solutions European Middle East and Asia regional offices in Kew, London.
Q: If you could summarize the role of Pegasus in the hospitality industry in one sentence, what would it be?
One sentence! How about one paragraph? The short answer is that Pegasus Solutions is the greatest global facilitator of electronic commerce for hotels, travel agents, TMCs and hotel bookers. However, I don’t think that does the company justice, so if I may…
Pegasus Solutions is the world’s leading provider of technology and services to hotels and travel distributors, supplying central reservation systems, electronic distribution services, advanced agency commission processing and payment services, and hotel marketing representation services. The company created and launched the hotel switch more than 20 years ago, and today works with nearly 100,000 properties around the globe as well as a majority of the world’s travel agencies. Additionally, Pegasus’ powerful representation arm incorporates Utell® Hotels & Resorts and Utell Connect, services that have been chosen by more than 9,000 member hotels in 146 countries.
Q: Many readers of this blog have been in contact to ask about the distribution chain from a hotel to a travel agent – can you explain this, and how Pegasus is involved?
Electronic hotel distribution is a complicated landscape, which is growing more so every day. Pegasus is involved on several levels, from connecting hotels to the global distribution systems (GDS) and alternative distribution systems (ADS) responsible for presenting rooms to bookers internationally, to delivering rate, availability and content requests to the travel agent requesting information on a specific property or group of hotels.
The best depiction of this complicated equation I’ve seen recently was an in-depth story published in the U.S. trade magazine Hotel & Motel Management during HITEC in June 2010. The article called “Untangling the Web of Distribution” illustrates and explains the distribution chain and all of its connections, painting a clear picture of where Pegasus sits in the equation – as you’ll see, that’s right in the middle. We worked extensively with the reporter who tapped us as his first source in developing the piece, which he agreed was tantamount to a master’s thesis.
Q: To date, what kind of year has 2010 been for Pegasus and for the hotel industry as a whole?
This year has been much more positive than 2009, not just by the numbers that we report monthly in The Pegasus View, but also by the mood reflected by our customers on the supply and demand side. Our CEO, Mike Kistner, attended a conference in January and came away with an interesting anecdote. Rather than dwelling on performance or lamenting 2009, everyone at the conference seemed to be reveling in the fact that they were still there – participating and planning for the future of the industry they loved. Following last year’s casualties, it was a very optimistic message to usher us into 2010.
On a numbers level, we’ve reported increases for both leisure and business bookings for several months now. The volume of bookings has rebounded faster than average daily rate or length of stay, however in May’s The Pegasus View, we saw a remarkable +39.6% increase in net revenue on a date-of booking basis for the GDS channel, which represents predominantly corporate travel. This is good news for the industry.
Q: What are your predictions ahead of 2011?
Forward-looking data shows a more than a +30% increase in GDS revenue for hotels year-on-year through the end of September. The positive data, as reported in the May issue of The Pegasus View, indicates double-digit growth in hotel booking volumes for both corporate and leisure travel.
The Pegasus View sources data from billions of GDS and ADS transactions, representing corporate and leisure travel respectively, for nearly 100,000 global hotels – these are the hotels Pegasus facilitates global distribution for. With forward-looking data indicating sustained increases in GDS average daily rate and length of stay, the May report also showed a remarkable +39.6% increase in net revenue on a date-of-booking basis for the GDS channel. Additionally, leisure travel demand is alive and well. Consumers will be traveling this summer, though they are shortening their stays and expanding searches for the best value.
Q: What are the current challenges and issues facing Pegasus?
While the economy is an obvious choice for the pressure it has placed on travel demand and corporate budgets, a greater threat for the hospitality industry at large is the ever-increasing volume of online shopping transactions.
Pegasus Solutions sits in a unique position processing billions of transactions each month for nearly 100,000 hotels worldwide. Additionally, we work with the four GDS and thousands of online travel agencies (OTAs) to distribute hotels – making them available to business and leisure buyers worldwide. As online shopping has gained momentum, we have seen dramatic changes in the burden hotels must shoulder to remain available, returning rate and availability requests accurately and on-time. In May alone, we saw a more than 50% increase in the look-to-book ratio, which represents the number of shopping requests made for every hotel booking.
For hotels, operating on 20-year-old legacy systems, this increase in demand places an excessive burden on central reservation systems, which often don’t respond to shopping requests in the time expected. For agents and buyers, this lack of response means an incomplete picture of available options.
Q: How do you see the huge growth of social media in the hotel industry, and what does Pegasus do in this area?
Social media has become an essential for hotels working to achieve visibility and credibility in a crowded marketplace. Utell Hotels & Resorts, Pegasus’ third-party hotel representation service, offers social media monitoring through a partnership with Milestone Internet Marketing. Through our agreement, more than 9,000 Utell member hotels can reap the benefits of Milestone’s award-winning Internet marketing services, including social media optimization, as well as Web site design, search engine optimization, pay-per-click advertising and email marketing.
Q: When you stay at a hotel (for business or leisure) what are the most important things to you?
Whether or not they’re a Pegasus or Utell customer :)
Many thanks to Andy for his time and sharing with us his thoughts. If anyone has comments, as always please feel free to leave them on the blog or send me an email.