H & A Report, Volume IV, Issue 2 November/December 1996

Fueled by 11 key developments, 1997 will stand as a landmark year in central reservations for many hotel organizations. A prosperous 1996 recharged budgets, saw the advent of still more powerful and more affordable hardware and witnessed maturing of core CRS applications. 1996, more importantly, was the year for company-wide recognition of the power of technology to deliver operational efficiencies, and, if used creatively, to provide decisive competitive advantage. As a result, many hotel companies have placed Central Reservation System upgrades and enhancements high on their 1997 priority list.

And what are those key developments sparking this interest and activity?

Installation of a New CRS. As Best Western and Wyndham settle-in with new CRSs and as Canadian Pacific and Westin migrate to theirs’, we see Manhattan East Suite Hotels, Inter-Continental, Utell International, Renaissance, Nikko, Hilton and, maybe even Marriott, in various stages of tire kicking, price negotiation or migration plan development.

Suites of Integrated Products. Reminiscent of bundled software packages like Microsoft Office or Lotus Smart Suite, leading hotel technology vendors are striving to devise and deliver not just interfaced but INTEGRATED families of functionality. Today they are offering CRSs integrated with:

• Property Management Systems
• Data Repositories (with extensive analysis and reporting features)
• Revenue Management

Graphical User Interfaces. Today’s GUIs advance the role of the reservation agent from order taker to sales person. This is accomplished through supplying carefully prioritized and appealingly descriptive data reinforced with on-screen incentive reminders.

Single Image Inventory. Recognizing the value of last room sale and capitalizing on new communication network economies, property management systems and central reservation systems are being reengineered to share the same rooms inventory data base, extending the last room sale capability from the property, to the CRO and even to the GDSs.

Seamless GDS Connectivity. Global distribution systems delivered over 50 million room nights in 1995 and will likely generate well over 60 million in 1996. Widespread implementation of seamless connectivity has been an important factor in this growth. Seamless links between CRS databases and global distribution systems now allow hotel organizations to display an unmatched depth of product detail – detail drawn directly from the CRS data base. In doing so, the seamless mode offers the opportunity to achieve product differentiation based on product quality as well as price. Seamless also opens the door wider to effective leisure product sales.

Leisure Travel Representation. In an electronic environment created to sell business travel services, functionality to present leisure options, particularly customized packages constructed to meet each travelers specific interests, is fast becoming a reality. The capacity for fully customized package design and pricing opens the door to effectively serving the lucrative leisure market.

Voice Reservation Centralization. Sometimes it is limited to an overflow or after-hours service application, but increasingly voice reservation centralization takes the form of complete replacement of property reservation office functions. 1997 will witness a growing number of hotel companies following the Hyatt, Red Lion, Manhattan East, and Kimpton lead and moving to to centralization of voice reservation processing. Individual property reservation offices are being downsized, or eliminated entirely, in favor of centralized regional or company-wide CROs where the lessons of salesmanship, scheduling and specialization can be effectively practiced. Two parallel motives drive this initiative: interest in achieving economies of scale and the desire to achieve consistency in customer service.

Outsourced Data Processing. When hotel companies decide that acquisition of a new CRS is not strategically appropriate, they have the option of using outsourced data processing. While continuing to operate their own CROs and enjoy the control that offers, those CRO staff use a central reservation system (made available on a “per transaction” fee basis) developed, maintained and operated by a hotel reservation specialist such as The Alliance or Anasazi Travel Services.

Integrated Revenue Management. Application of the principles of revenue management is increasingly in evidence as RM functionality is integrated into CRS. The result is greater opportunity to precisely control the rates displayed for available accommodation, both at the CRO and in GDSs. The lessons of revenue management pioneers such as Eric Orkin and his Opus 2 organization (especially as exemplified by Outrigger Hotels in their joint development of central reservation agents screens which reflect recommendations, provide sales support of data and display incentive information to agents) to not only steer, but actively encourage, profit maximizing performance, will be increasingly in evidence.

Computer-Telephony Integration. 1997 will see major strides in incorporating CTI technology into CROs. Already widespread outside the hotel CRO environment, CTI will be used to route calls to the most appropriate reservation agents as well as employed to display client profiles, reservation history and other data on the agent terminals simultaneous with the initial response to the call, in what are colloquially termed “screen pops”.

The Internet. No look forward would be complete without examination of the potential impact of the Internet on central reservations. Without question, Internet-based property-to-CRS communication will become increasingly common. TCP/IP will be widely implemented and the Internet environment’s design advances in user screens will appear in CRS displays — to cut training and increase ease of use.

At the same time, CRS-supported bookablility — allowing instant confirmation of Internet-originated booking requests — from safeguarded CRS data bases will expand.

Change on every front? You bet! The pace is building and 1997 will be a record-setting year for increased system sophistication and the number of hotel companies affecting major CRS change. Beyond 1997, who knows. Join me at HITEC in Baltimore June 17-19 and let’s find out together.