Adam Harris, the CEO of Cloudbeds, the owner of the Myallocator channel manager, has provided clarity on the 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 charged today. In bandwidth alone, they barely break even, and yet they are adding more channels, which means more bandwidth. It is only natural that 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 sending those changes to your PMS and across your other distribution channels. If you compare to the prices of other channel managers, Myallocator's pricing is quite low. This super low pricing makes it more difficult for them to add more channels and remain 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 excel 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 understands this; they want to continually improve their response time and customer relations, but people cost money. So, the pricing hike is related to more than just the technology.
It's Best for the Industry
There has been a rift in industry technology that has grown over the decades. There are technology powerhouses in the industry that have moved closer to being accessible to high-revenue hostels in strong currency locations, leaving everything else behind. This means medium and small hostels do not have affordable access to all the features the bigger hostels can utilize. Of course, not all features are needed, but some of these features can really contribute to a hostel differentiating itself from the others.
Take Myallocator's major competitor, Siteminder, as an example. 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 at the time. 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 the increased demand from working holiday visa holders, high wages, and a strong Aussie dollar. Siteminder recognized that hostels could adapt to their product faster than hotels, so they changed their XML specs to work with hostels and quickly seized the market—a market they still dominate today. Siteminder was small and able to adapt quickly to demands, just like Cloudbeds is today.
Now, things are a bit different with Cloudbeds compared to Siteminder, mostly because Cloudbeds hosts an entire suite of products, whereas Siteminder focuses on its core distribution platform. There are some negative possibilities, such as multiple products distracting 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 is 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. A more competitive Cloudbeds is a good thing. With the price hike, we can expect improved customer relations, more integrations, more features, and perhaps beneficial bundle deals for those who use more than one of their products. Overall, this price hike can help close that gap and make technology (even those not created by Cloudbeds) more innovative and 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.