There’s been plenty of excitement in recent months about the expansion of B2C and B2B marketplaces – some of it justified.
The rise of B2C marketplaces is well-documented with success stories like Amazon, Apple, Google Play and Spotify.
For B2B the picture is less clear. A select few – like Apple, Alibaba and Microsoft – are doing well, but many others are struggling.
This isn’t surprising given how difficult it is to set up a B2B marketplace. To make it work you need a centralised hub, a very broad spectrum of products, and a vast number of vendors and suppliers to trade those products.
But what about B2B marketplaces in hospitality software? Several large software vendors are banking their future on those marketplaces becoming an important driver for technological innovations in the hospitality sector.
Given how asymmetrical the relationship is between buyers and vendors when it comes to software solutions, this seems like a poor strategy.
Larger buyers want deeper partnerships
Most software innovations in the hospitality industry have been driven by a small number of technically-minded buyers and start-ups.
Their CIOs are highly clued-up on latest developments. When it comes to making high-value purchases, they either work directly with trusted partners or indeed build their own solutions.
A B2B marketplace in software brings no benefit to these buyers, because it lacks the personalised customer service and the problem resolution they’ve come to expect from a traditional buyer/seller relationship.
Smaller buyers want fewer partnerships
Some of the smaller buyers may well be tempted by the one-stop-shop promise of a hospitality B2B marketplace – at least initially.
These buyers might be smaller-scale, less digitally-minded, family-owned companies. Or they might be corporates whose executives are too busy managing an already wide enough range of existing delivery partners.
A marketplace won’t serve them either. Not only do they lack the necessary expertise required to make an informed product choice in a marketplace, they’re often also short on the extra bandwidth needed to manage an additional partnership with a new vendor.
Travel APIs and hospitality APIs (including Olery’s own review data API) are a much better tools when it comes to accelerating technological innovation.
This is why they’re one of the driving forces behind the current growth in the travel industry.
They allow vendors to leverage their existing knowledge of a client’s needs and infrastructure by building a customised solution – one that’s very different (and usually way better) than the generic products on offer in a marketplace.
It’s a win-win situation, where vendors can deepen their relationship with existing clients.
At the same time, buyers get an additional set of customised modules without the hassle of having to manage a new relationship with yet another supplier, as would be the case if they purchased in a marketplace.
Doing business with people
It’s worth remembering the old mantra that ‘people do business with people’. That’s why the one-size-fits-all solution offered by a B2B marketplace in hospitality software will never work.
APIs on the other hand offer an integrated ecosystem that allows buyers to focus on what they do best – providing a seamless travel experience – while vendors can use their expertise in hospitality APIs to help them deliver just that.
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