CHOOSING A RESERVATION REPRESENTATION COMPANY REVISITED – PART 1

A decade ago I wrote a two-part article for Hospitality Upgrade about the role reservation representation companies play assisting independent hotels and hotel companies in developing and operating comprehensive and successful reservation programs.

With the expansion of electronic distribution options, many Web-based, that role has become even more important.  The urgency for hotels to develop and operate extensive reservation efforts through the electronic channels, efforts that benefit from, and often require, use of a reservation representation company, has prompted this updated and expanded edition of that original work.

Compelling property presentation (including an easy-to-use reservation process) on your Website, through the online travel agencies, in the global distribution systems and via strategically located call centers is vital for both hotel properties and lodging brands.  The growing number of sales outlets, complexity of accessing them and the importance of effectively participating in all of these sales channels has never been higher.

Branded hotels generally receive connectivity and distribution services through their affiliations with the lodging brand. Independent hotels and many small and mid-size hotel brands use the services of reservation representation companies to gain full spectrum access to electronic and conventional sales channels.

As a distribution and reservations consultant, hotels and hotel brands frequently ask for assistance in evaluating the vendors of these services, as much today as a decade ago.  Since this article was first published, demand for reservation representation service has not only continued, it has grown.

As the number and complexity of reservation channels and the importance of using them astutely has increased, it is valuable to review the services that representation service suppliers offer, identify the major vendors and aid hoteliers in evaluating their options and making an informed selection of the representation company they will use.  This article series assists in that goal.

Why use a reservation representation service?  In the case of individual hotels, representation services are secured to provide the following:

• Obtain a reservation function for the hotel’s Website; the booking process after the “reserve now” button.
  Significance:  These direct bookings combine the lowest processing cost with the chance to offer promotion, to package services and to create relationships.
• Be listed in the hotel booking displays of the four major GDSs – Amadeus, Galileo, Sabre and Worldspan—for access by travel agents worldwide and to allow participation in various online travel agencies (OTAs) including Travelocity, Priceline and Hotwire.
  Significance:  Global distribution systems, who deliver high-rate corporate business, do not work with hotels individually but only via a brand or a representation company.
• Gain connectivity and automated information maintenance in large OTAs (such as Expedia.com and Booking.com), and in hundreds, if not thousands, of smaller Web-based travel booking sites, reducing the number of OTA extranets to be updated daily.
  Significance:  OTAs can deliver welcome reservations in times when full occupancy will not be achieved through other booking channels; but manual maintenance of numerous individual OTA extranets is impractical, probably impossible.
• Access Internet positioning and promotional services (search engine optimization, search engine marketing), Website design and hosting, and analytics tools to better understand the origin and mechanics of Web shopping and booking.
  Significance:  Being visible in the search engines is key, but is not achieved without specialized effort.
• Be bookable on toll-free telephone lines at voice reservation centers in key outbound markets across the globe.
  Significance:  Some travelers prefer to talk with a person, because human-delivered customer contact and service is a cornerstone of the hospitality trade.

UNDER THE REPRESENTATION COMPANY’S IDENTITY UMBRELLA

When an individual hotel uses a representation service, that hotel is presented and promoted in the distribution channels under the representation company’s brand identity.  Representation company Websites promote all of their client hotels in the selected destination.  Callers to the representation company’s voice reservation centers are asked their travel destination and are then told (usually based on selection criteria such as specific location, rate or amenities) about the representation company’s client hotels in that location, (“Good morning, All Star Reservations. To what city are you traveling?”).  Via two-character identification code, the hotel’s GDS listing indicates the representation company affiliation.

PRIVATE LABELING – VALUABLE TO SOME LODGING BRANDS AS WELL

Operating the sophisticated computer systems needed by a lodging brand to sell their hotels in all of the electronic distribution channels is a complex and expensive undertaking.  Some organizations consider self-operated reservation technology to be core to their brand’s value to its properties.  Others feel reservation system operation and multi-channel connectivity to be better left to a reservation representation company, freeing the hotel company staff to concentrate on other activities.

When the decision is taken to delegate reservation operations activities to an expert third party, hotel companies, like independent properties, seek the services of a reservation representation organization.  In these instances the GDS listings, the Web booking engine, the call answering and numerous other activities are positioned or branded in the name of, and in the style specified by, the hotel company.  This arrangement is termed private label representation service.

In private label service, the representation company provides Internet reservations processing on the hotel chain’s own site (with only that brand’s properties displayed).  Travelers calls on the brand-dedicated toll-free numbers are answered in the client’s name, (“Good morning, Acme Hotels . . .”) and GDS listings are grouped within the hotel chain’s own two-letter identification code.

TIMING OF THE SEARCH AND IMPLEMENTATION

The process for an individual property to become a client of a reservation representation service is relatively simple, although an extended sequence of time-consuming steps makes it a longer process than might be expected.  For a hotel company with multiple properties and numerous reservation and distribution processes already in place, implementation of a representation service, or switching from one service to another, is considerably more complex and a much lengthier process.

Defining requirements, identifying vendors and making the initial selection of those vendors to whom the requirement definition will be sent and proposals requested, detailed proposal and capability examination and, finally, contract negotiation typically consume 60 to 90 days.  Once a service agreement has been signed, activation requires 45 to 60 days, although in rush situations a 30-day or less implementation can be accomplished.

The process is more extensive when a hotel chain is seeking a representation service supplier.  This is largely attributable to the added complexity of each step in the process—defining the requirements, assessing the proposals, negotiating the contract, collecting the property rate and availability data and descriptive information and then entering it into the CRS, the GDSs and onto appropriate Websites, all take longer because of the greater volumes involved.  Adjustments to the look and feel of the booking engine and other required customization can be time consuming as well.

Hotel chains typically begin to evaluate their private label service options and vendor capabilities 12 months prior to activation, with 15 months often an advisable starting point for the process and nine months the minimum in most cases.

NEXT TIME

Whether representation service operations are being considered by an independent hotel or by a lodging chain, the overriding need is to conduct the evaluation process in a thorough manner.  The decision will have long and far-reaching impact on the success of the distribution and reservations program of the property or brand for several years into the future.

The next article will contain an extensive list of the major criteria—used by individual properties and hotel chains alike—in evaluating reservation representation service vendors.  It will also list the major reservation firms currently serving the hotel industry.