Adam Harris, the CEO of Cloudbeds, the owner of the Myallocator channel manager has added some clarity to a rumor of a Myallocator price hike. Cloudbeds is restructuring the pricing of all their products. So simply put, yes Myallocator will raise its pricing, however, we here at HostelTrends believe it isn’t much to worry about. Here are three reasons why.
Myallocator is Super Undervalued
The amount of tech involved in developing and operating Myallocator is worth way more than the $18 a month today. In bandwidth alone, they barley break even, and yet they are adding more channels, which means more bandwidth, it is only natural they will raise the rates to compensate. They have bots that pretty much crawl every OTA and your PMS every 3-5 minutes, looking for changes, and then send those changes to your PMS and across your other channels of distribution. If you look to the prices of other Channel Managers, they are prices well below. This super low pricing makes it more difficult for them to add more channels and be more competitive in the industry, which we will mention later.
They Come with The Team
Cloudbeds has a dedicated team to help you with your concerns across all products. This is where they are excelling compared to their competition. Human capital is important in the industry, and operators are less hesitant when there is a face to the product. Cloudbeds get this; they want to continually improve their response time and customer relations, but people cost money. So, the pricing hike is going to more than just the technology.
It’s Best for the Industry
There has been a rift in the industry technology that has grew over the decades. There are technology powerhouses in the industry, that moved closer and closer to be accessible to high revenue hostels in strong currency locations, and there has been everything else. This means that medium and small hostels do not have affordable access to all the features the bigger hostels can get. Of course not all the features are needed, but some of these features can really contribute to one hostel differentiating itself from the others.
Think about Myallocator’s major competitor, Siteminder. They were originally created because RateTiger was too buggy, and they did an excellent job. Hotels loved them, but many hostels were locked into contracts for the time being, so while they loaded leads into their sales pipeline, they turned to hostels for an added revenue stream. The Australian backpack industry is booming, due to increased demand of the working holiday visa holders, high wages, and the strong Aussie dollar. Siteminder saw that hostels could adopt to their product faster than hotels, so they changed their XML specs to work with hostels, and rapidly grabbed a hold of the market, a market they still dominate today. Siteminder was small, and could adapt quickly to demands, just like Cloudbeds is today.
Now, things are a little different with Cloudbeds than Siteminder. Mostly because Cloudbeds host an entire suite of products where Siteminder kept to its core distribution platform. There are some negative possibilities such as multiple products can distract resources from their Myallocator product but the positive possibilities outweigh the negatives, especially considering that they can share resources from multiple products, including their dedicated teams.
Cloudbeds are actively listening to their customers, which is great. They will only raise their prices to justify all their costs, and make them more competitive in the market. Cloudbeds being more competitive is a good thing. With the price hike, we could expect improved customer relations, more integrations, more features, and perhaps good bundle deals to those who use more than one of their products. Overall, this price hike can help close that gap and make more technology (even those not made by Cloudbeds) more innovative and more accessible to more hostels. Generally, as Cloudbeds becomes more competitive, their competitors will have to restructure their pricing or innovate their features to compete. And for the industry as a whole, this competition is a good thing.
See the statement Adam Harris has made on Hostelmanagement.