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The Evolving Role of the Central Reservation System

H & A Report, Volume IV, Issue 3 January/February 1997.

    Traditionally hoteliers have mentally positioned central reservation systems as stand-alone, essentially single purpose, units. Their role was to support the central reservation office(s) and deliver bookings to properties.

    With installation of links to an array of sophisticated sales channels and development of integrated information collection and data analysis capabilities, that thinking, as we enter 1997, is considerable changed. While once, to borrow Max Hopper’s phrase, an "island of automation", the CRS now functions as the server in a massive and mission critical data collection, processing and analysis environment This evolution impacts how we maintain and enhance our current systems as well as the priorities we set when we shop for a new Central Reservation System.

Distribution Support

Today’s CRS functions as the central data depository and booking engine for a variety of distribution front-ends. While the CRS’ importance in supporting voice agents at any number of CROs remains unquestioned, it simultaneously supports up to half a dozen Global Distribution Systems, providing confirmations through Type A channels. Today major hotel companies commonly list themselves in Amadeus, Galileo/Apollo, SABRE, System One and Worldspan. Some add secondary GDS such as SAHARA as well.

Production of over 30 million net hotel reservations by GDSs in 1996 (source: HEDNA), equating to more than 60 million roomnights, illustrates the importance of this steadily growing booking source. Moreover, the CRS role in interfacing with GDSs is increasingly being escalated beyond just returning a confirmation number. It now plays a fully interactive role as seamless connectivity results in travel agent data displays being built from data supplied real time by CRSs.

And electronic distribution support duties no longer end with the GDSs. Now, the CRS also supplies product data, and performs transaction processing to varying extents, for a range of Internet and on-line services front-ends. As a consequence, demands on the CRS have grown from support of possibly several hundred CRO agents positions to the users of the 455,000 of GDS terminals, and the millions of "hits" the Internet can generate.

The Marketing and Guest Service Support Role

While serving a relatively "active" role as the server for a growing number of distribution front ends, the CRS concurrent play a comparatively "passive" but no less vital role as a data repository, warehousing, retrieving and analyzing information crucial to effective management and guest service. In this function, it supports a range of revenue management, decision support, data base marketing and guest history specialist front ends.

Revenue Management 

    Validity of revenue management in the central reservations environment has been established. It is no longer solely the domain of the Property Management System. As demonstrated by systems such as the Holiday Inn Revenue Optimization (HIRO) system, analysis can be successfully performed and recommendations generated from the CRS level. In supporting centralized revenue management, the data retrieval and supply resources of the CRS are further relied upon.

Decision Support 

Rising occupancies and ADRs are leading hotel management (corporate and property alike) to seek more timely and more comprehensive activity data. Increasingly user friendly software is becoming available to allow them and their staff to analyze the wealth of data captured in the relational data bases of modern CRSs. Through use of recently released software tools which eliminate the multi-week, multi-thousand dollar investment to develop activity reports, executives can view full color, immediately definable displays to support fully fact-based decision making, tapping and exploiting the wealth of trend data resident in the CRS data base.

Data Base Marketing 

Decision support allows management to detect trends and patterns - to spot opportunities and uncover weaknesses - in a timely manner. Placed in a marketing context, decision support becomes the foundation for data base marketing. The CRS contains a treasury of past activity information, from which geographic, sector and segment source information, demographic profiles and potential repeat guest information can be mined. Again, enhanced analysis and reporting tools have opened access to CRS data in an economical and timely way. In doing so, they have also further increased our demands on, and expectations of, the CRS.

Central Guest History 

Finally, the CRS is increasingly being equipped to function as the chain’s master data source for guest history and preferences. Sometimes supplementing, and increasingly replacing, property level guest history, this CRS function is increasingly viewed as a competitive necessity. And like so many of the previously mentioned features, centralized records add heavy demands on both the CRS and its supporting communication network. These are demands to meet rigorous speed and reliability requirements, as guests complete guest activity data, plus accounting and property specific management records, are collected and consolidated for enterprise-wide review and analysis.

And What Does All This Mean?

Today’s and, even more so, tomorrow’s CRS serves as the heart of a family of distribution, analysis and service functions. It serves many clients simultaneously and is expected to function reliably and speedily, all the while accommodating additional "clients" as they emerge.

The challenge for hotel executives in establishing today’s CRS enhancement priorities and tomorrow’s new system features list, is to set the technical foundation capable of underpinning emerging or potential functions. Their challenge is to avoid feature inaccessibility due to system limitations. More than ever, scalability, both of hardware and software, will be a key system criterion, its presence assuring the capability to exercise future opportunities.