Emerging Platform Business Models in Hospitality industry

A Platform business is a business model (not a technology infrastructure) that focuses on helping to facilitate interactions across a large number of participants. These interactions could take the form of short-term transactions like connecting buyers and sellers or they could involve formation of longer-term social relationships, longer-term collaboration to achieve a shared outcome or sustained efforts to accelerate performance improvement of participants by helping them to learn faster together. The role of the platform business is to provide a governance structure and a set of standards and protocols that facilitate interactions at scale so that network effects can be unleashed.

Aggregation platforms bring together a broad array of relevant resources and help users to connect with the most appropriate resources. These platforms tend to be very transaction- or task-focused: Express a need, get a response, do the deal, and move on. Marketplace and broker platforms like eBay and Etsy are well-known examples. Aggregation platforms tend to operate on a hub-and-spoke model, whereby the platform owner and organizer brokers all of the transactions.

Social platforms are similar in that they also aggregate a lot of people—Facebook and Twitter are leading examples—but rather than supporting the completion of a transaction or a task, they support engagement among people with common interests. They also tend to foster networks of relationships rather than hub-and-spoke interactions—people connect with each other over time in ways that usually do not involve the platform organiser or owner.

Mobilisation platforms move people to work together to accomplish something beyond the capabilities of any individual participant. They tend to foster longer-term relationships rather than focus on isolated and short-term transactions or tasks. In a business context, the most common form of these platforms brings together participants in extended business processes like supply networks or distribution operations.

Learning platforms facilitate learning by bringing participants together to share insights over time. They tend to foster deep, trust-based relationships, as participants have the opportunity to realise more potential by working together. Business leaders who understand this will likely increasingly seek out platforms that not only make work lighter for their participants, but also grow their knowledge, accelerate performance improvement, and hone their capabilities in the process.

Everywhere we look today, platform businesses are in the news. From the most valuable start-ups that are disrupting traditional markets, to established companies that have shifted their business model from a traditional linear to a platform-based approach.

Why platform businesses are nothing new?

Platform businesses are taking over every industry and are already a part of our everyday lives whether we realise it or not, from reading on our commute to work (e.g. Amazon Kindle), to borrowing money to opening a small business (e.g. LendingClub).

The concept of a platform business is not a new phenomenon. Think about the old ancient marketplaces or the massive American shopping malls or even exhibition centres. The types of businesses have mostly used brick-and-mortar approach to enable interactions and to facilitate value exchanges. Nowadays platforms are increasingly supported by global digital technology infrastructures that help to scale participation and collaboration, but this is an enabler, rather than a prerequisite for a platform.

As case in point - with the auction house example in mind - think about the e-commerce company eBay. Through its platform, eBay facilitates consumer-to-consumer and business–to-consumer sales by enabling interactions between 170+ million buyers and 25+ million sellers across the globe 24/7.

Hospitality Sector

In Hospitality sector there are brands of hotels which are working on business platform phenomenon.

ITC Hotels have four distinct brands under which ITC’s brands Fortune and Welcomheritage’s Business model used to be an aggregator. The company manages the properties owned by others. The consumer purchases the room from ITC but the property is of someone else ITC is just providing them a brand name. By providing them a platform of their brand name they are sharing profits in a certain ratio which is defined in MOUs and AOUs.

OYO Business Model used to be a lodging aggregator. The clients used to purchase the administrations from the brand OYO rooms and couldn't have cared less who the accomplice was. Much the same as Uber, OYO gave rooms normalized quality and cost.

OYO Rooms have a system of inns that are at present working in 5,000 urban areas in India, Malaysia, UAE, Nepal, China, and Indonesia. OYO began its activities by building its plan of action around the aggregator plan of action.

Already, the organization is in arranging the collaborate with inns, rent a few rooms, and sell them under its own image. The fundamental focal point of the OYO rooms is to offer quality types of assistance to their clients. They cause the accomplices to offer types of assistance at foreordained norms to keep up the brand picture while they make them progressively noticeable to their client base.

Majorly all the big hotels use to have aggregator platform. Under which they manages different properties by giving their brand names which helps them to create their own brand awareness whereas owners of the property shares good profit margin by collaborating with them in the form of rent, profit-share.