Kalibri is from the Latin word for hummingbird. Much like the unusual, high-speed bird, Cindy Estis Green, co-founder and CEO of Kalibri Labs, a hospitality data analytics company based in Rockville, Md., is always moving forward to help hoteliers navigate the changing digital landscape. She sat down with LODGING to discuss her latest projects and how Kalibri is helping to advance hotel technology into the future.
Why did you start Kalibri Labs? About four years ago, I wrote Distribution Channel Analysis: A Guide for Hotels, which shed light on the distribution channels that affect the lodging industry. After I finished writing the initial study, I realized that there was a tremendous need in the industry for better intelligence regarding the digital marketplace, as well as revenue performance information that hotel companies, owners, and operators could act upon. That was what inspired me to start Kalibri Labs: The need to have intelligence about costs of customer acquisition combined with revenue performance; it didn’t exist. And our ability as an industry to understand the dynamics in the digital market will be exponentially improved by this summer, when we plan to release a follow-up to that initial analysis in collaboration with the American Hotel & Lodging Association (AH&LA).
How has the company evolved since its launch? While we opened officially in 2012, we started by building a unique technology platform and collecting guest stay and cost data; we went into live production with clients in the last 18 months. Currently, we work with over 25,000 hotels and we’re very involved with a lot of industry initiatives around digital market and distribution. In fact, one of our most exciting series of projects right now is through the Consumer Innovation Forum. This forum consists of hotel brands, owners, and management companies—under the umbrella of AH&LA—and together we conduct research to tackle issues driven by the digital marketplace.
Are there any particular issues you’re looking to address? We’re working on the challenges of consumer deception, which includes practices that mislead consumers while conducting online travel shopping, a subject that came up often by the members of the Consumer Innovation Forum. Online scams are a huge problem for hotel buyers. Through the forum, we’ve been really successful at pointing to the problem and being able to quantify the cost to the industry and to consumers. Kalibri Labs is gathering the data and making it available both for legislative use and for the benefit of hotel brands and owners.
We’re seeing players like Google and Facebook interested in the online travel market. How do you see that panning out? There’s an opportunity for new players to come into the market. Facebook, Google, and other large entities like them are interested in selling travel products. But it’s hard to come into the hotel market, because you have to have all the rates and availability and hotel descriptions. It’s tough to get from, “OK, now I want to sell hotel rooms,” to having an active platform offering them to consumers. That’s another driver behind the Consumer Innovation Forum—we are trying to make that entire process easier. We’re trying to help new competitors come into the market more quickly, because we think more competition is better for the consumers and better for the hotel companies that serve them.
Rising acquisition costs are making securing guests more expensive. How can these costs be mitigated? A lot of commission rates have been negotiated down by the big brands, but more business in general is going through third-party intermediaries, so commissions have actually risen at twice the rate of revenue growth over the last five years in the U.S. market. Additionally, commissions continued to rise as an aggregate, even though the commission rates are lower. Increased competition is a good way to bring the commission rates back down.
Hospitality often lags in innovation and technology. Why do you think that is? Hotel companies have a very diverse set of responsibilities, so developing technology and creating booking sites aren’t the only things on their plates. Their resources are very diffused, and they have to spend money on a lot of things. They’re not entirely focused on their technology and their booking engine. In spite of this, they have made great strides that you can see in their apps and on-site technology. I think the use of technology for personalization and to make recommendations based on stored knowledge about a guest’s profile will continue to develop and help hotels differentiate the guest experience.
