1. Global Reservations Technologies
Chapter 5

2. Objectives Hotel Terms / Acronyms Global Distribution System (GDS)
Reservation Channels
Current Trends
Automated Revenue Management System

3. Hotel Terms/Acronyms Central Reservations Office or CRO
Central Reservations System or CRS
Global Distribution System or GDS
Last Room Availability or LRA
Application Service Providers or ASP
Close to Arrival or CTA
Minimum Length of Stay or MLOS

4. Global Distribution System
Objective 1
Global Distribution System

5. Global Distribution System
History
Started with Airlines in early 1960’s
Developed technology
Gave Travel Agents access to computer systems
Hotels followed later saving time and money
3 Major GDS Providers
Sabre
Amadeus
Travelport (Galileo and Worldspan)

6. Global Distribution System (cont.)
Seamless Connectivity
Pre-1989 systems were not updated quickly
1989 started exchange of real time info between GDS and CRO
Last Room Availability (LRA)
GDS continued to sell rooms until CRO was closed
Electronic Switch Technology
Ability to link CRS and GDS (speak the same language)
The Hotel Industry Switching Company (THISCO, now Pegasus)
Updated in real-time

7. Global Distribution System (cont.)
Application Service Providers
Software companies who offer a web-based line of applications
Provides the following functions
A CRS
GDS Connectivity
Connections to “alternate” distribution systems
Internet reservations

8. Global Distribution System (cont.)
Application Service Providers (cont.)
Benefits associated with ASP Applications
Hotel does not need to make large investments
ASP maintains the system and upgrades
Instantaneous enhancements
Uses same database to limit error rates

9. Objective 2
Reservation channels

10. Reservation Channels Travel Agent
Changed dramatically due to Airline commissions
Reduced commission amounts
Capped maximum payouts per reservation
Hotels still pay a 10% commission to Agents
At times a hotel will pay more to offset off-peak season
Many corporations use Agents to book travel
Agents complain Hotels are slow to pay
Commission payouts are often inaccurate

11. Reservation Channels (cont.)
Central Reservation Center or CRO
Office in which reservations are booked
Used by Chains for all hotels to utilize
Trending to be outsourced
Chain no longer pays for agents or office
Price per call payment
Some are now home-based to eliminate office
Calls are usually 2-3 minutes
Menu options directs caller to right operator

12. Reservation Channels (cont.)
In-house Reservations
Call to the Hotel directly
Reservation is made by hotel staff
Reduces the fees associated with using CRS
Hotels are not always staffed to give good service
Staff often transfers caller to CRS without telling the guest they are doing so

13. Reservation Channels (cont.)
Internet & Web-based Reservations
Search Engine Optimization
Hotel’s accessibility on internet
Pay to have key words make their hotel appear first
Hotel Websites
Marketing focus for the hotel
Rooms booked are profitable at 100% (no fees)
Chain Websites
Promises lowest price on this site versus 3rd party site

14. Reservation Channels (cont.)
Internet & Web-based Reservations (cont.)
3rd Party Travel Website
Sites ran by non-hotel companies
Site contracts a certain # of rooms from hotel
Resells at a higher price and retains upcharge
Often hurts hotels rate integrity
Opaque Sites do not reveal hotel until after purchase
Meta-Search Technology
Side by side comparisons
Kayak, TravelZoo

15. Reservation Channels (cont.)
Independent Reservation Services
Organization with memberships
Hotel joins and becomes a member
Rooms are booked at member hotels
UTELL International is the largest

16. Current Trends in Booking
Objective 3
Current Trends in Booking

17. Current Trends Mobile Apps Voice Recognition
Smartphone Applications for the Chain
Locates you and searches nearby hotels
Voice Recognition
Recognizes the requests and translates to room
Can be supplemented with an operator

18. Current Trends Mapping Capabilities Guest History Databases
Groups by geographical location
Hotels located near an attraction, etc
Guest History Databases
Typically used by chains to “track” guests
Database is not shared among competitors
Tracks number of stays, rates paid, personal info

19. Automated Revenue Management Systems
Objective 4
Automated Revenue Management Systems

20. Automated Revenue Management Systems
Philosophy used to be “Heads in Beds”
Now hotels are more selective
This is Revenue or Yield Management
Hotels may deny a poor reservation to hold out for one that is more profitable
For example, deny a 1-night stay for a 4-night stay
Technology is allowing this to happen

21. Automated Revenue Management Systems (cont.)
Yield Management
Act of controlling rates and restricting occupancies in an effort to maximize room revenues.
Works best when price influences decision to buy and market segments exist in the industry
Airlines started by adjusting rates based on demand

22. Automated Revenue Management Systems (cont.)
Yield Management (cont.)
Market Demand and Price Points
Demand is Price Sensitive
Corporate Guests – less price sensitive, weekday travel, books at the last minute, location is important
Leisure Guests – very price sensitive, will plan trip during discount periods, can book in advance to take advantage of lower rates
Group Guests – more sensitive to date and location than price, may comprise of business and leisure guests

23. Automated Revenue Management Systems (cont.)
Price-Occupancy Mix
Hotels may vary on what is most important: Room Occupancy or Room Rate
High Occupancy = High Rates and vice versa
Revenue Per Available Room
Money made on all available rooms, not just sold rooms
Contribution Margin
How much of the room contributes toward profit

24. Automated Revenue Management Systems (cont.)
Ideal Conditions for Yield Management
Fixed Supply
Variable Costs
Interchangeability
Segmented Markets
Seasonality

25. Automated Revenue Management Systems (cont.)
Tools for Measuring Results
PHASER Complete Access Report
Provided by TravelCLICK
Separates hotel into GDS and CRS reservations to determine lowest rates of each
Compares to the competitive set
Smith Travel Research STAR Report
Based on Historical Data
How did hotel perform to competition and to last year?
Compares hotel to combined competitive set

26. Automated Revenue Management Systems (cont.)
Tools for Measuring Results (cont.)
Travel Information Mgmt Services (TIMS)
Uses Sabre System in GDS
Lists lowest rates at each hotel in competitive set
Hotelligence Report
Report generated by TravelCLICK
Uses ONLY GDS information (not hotel direct)
Determines the “fair share” of the market
Shows market penetration against competitive hotels

27. Automated Revenue Management Systems (cont.)
Tools for Measuring Results (cont.)
Expedia Competitive Price Grid Report
Shows competition so hotel can manage site better
Other Reports
Sabre.Net Reports
Hotel Information Service (HIS) Reports
CheckRate
TrendFx

28. Automated Revenue Management Systems (cont.)
Automated Yield Management Systems
Artificial Intelligence
Use stored data to form rules that govern decisions
Rules and Triggers
Divide inventory for each segment
Flags at certain occupancy to increase rates
Centralized Yield Mgmt
Hotels update CRS which then updates all systems

29. Automated Revenue Management Systems (cont.)
Automated Yield Management Systems (cont.)
Strategic Account Management
Managing customers for entire chain vs. each hotel
Yield Management Controls
Boxing – segmented certain days to require check out
CTA – closed to arrival
MLOS – minimum length of stay
Nests & Hurdles – ensures high rates are not closed out
Fenced Rates – rate is determined by options chosen