CRS – EVOLVING ROLES, EVOLVING CAPABILITIES

1 June 1998
John Burns
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The ultimate role of the CRS:

  • Storing availability, rate and descriptive information
  • Presenting that information to “front ends” – CRO displays, GDS, Internet sites
  • Processing reservation transactions
  • Dispatching confirmations to hotels

Right?  Wrong!  Examples abound of hotel company executives — in marketing, operations and reservations — revising their expectations of the central reservations and related technology installed within their operations.  They understand that technology now offers the opportunity, and competition has generated the need, for not only efficient transaction processing and distribution through electronic channels but also a broader, deeper and more timely picture of enterprise-wide activity and what it means.

Take Inter-Continental Hotels and Resorts, for example.  Their Global 2000 project has expanded the functions of, and interfaces between, the central reservation, property management and communications systems, as well as installed data base warehousing and analysis tools.  The goal?  To extract complete folio data for every guest stay at its hotels.  The benefits?  Many, including:

  • A rich data base of individual guest activity — and not just the frequent travelers.  Analyzed on a macro level, the result is local, regional and global indications, travel trends and preferences.  On a micro level, data base marketing takes on a new level of detail and accuracy.
  • Complete, chain-wide utilization data for every corporate account, travel agency and channel of distribution.  Finally, real producers can be identified, and the best rates granted to those who are actually delivering (not just reserving) the most business.
  • Immediate availability of company-wide operating statistics based on uploaded hotel production figures.  Booking trends, by promotion, can be detected and analyzed using full and complete data.

A multi-year project, Global 2000 was neither quick, simple nor inexpensive to implement.  Has it been worth the effort?  “Absolutely!  Many companies rely on a ‘gut feel’ when determining trends or who their customers are.  We now identifiy these based on facts,” says Wayne Savard, vice president, Rooms & Reservations, Inter-Continental Hotels and Resorts.

There was a time when such a complex systems integration, data communication enhancement and information analysis effort would only have been attempted by a major, up-market chain.  No more.  Cendant Corporation’s Project Power Up will see one of three PMSs installed at Cendant expense in every Days Inn, Howard Johnson, Knights Inn, Ramada, Super 8, Travelodge, Villager and Wingate.  $75 million has been allocated to equip each hotel with a Multi-Systems, Hotel Software Systems or Anasazi GuestView PMS.  Two-way interfaces will link those systems to the CRS and the central data repository, a site responsible for:

  • Reservation processing
  • Data delivery to each distribution point (CRO, GDSs, Internet, etc.)
  • Data accumulation into brand-specific data bases
  • Activity plotting and reporting
  • Intranet operation for internal corporate communication and staff training

As the Cendant example indicates, hotel executives are asking, indeed demanding, more from their technology.  Stand-alone systems for property-level data processing, for central inventory and booking management, for data compilation and analysis are no longer acceptable.  Last room sale, fully realized revenue management and data base mining — both micro and macro — demand unconstrained, timely data availability.  Concerns about data volumes, data communication hurdles (including cost) and data accuracy must give way.  And they are.

WILL THE VENDORS RESPOND?

A new data management model is forming in the minds of hotel executives.  Do system suppliers sense this need for integration of, until now, disparate, stand-alone systems; of the value to hoteliers in not only performing the transaction, but also understanding who did it, where it happened and its circumstances?  Yes, they do.  CRS vendors large and small are moving to this new functionality configuration, as indicated by their:

  • Partnering with revenue management vendors to offer revenue management technology
  • Adoption of sophisticated data warehousing and data mining tools with which to compile and strategically analyze CRS activity data
  • Acquisition of, merging with or strategic partnering with, PMS vendors to further expand the single-stop product family
  • Movement beyond interfaces toward true system-to-system integration
  • Redesign of CRS electronic distribution interfaces to support not only “seamless” communication with Global Distribution Systems but, simultaneously, real-time inventory access by Internet booking sites

Addition of revenue management, data base analysis, and other major functions to the original transaction processing role challenges the basic architecture of the CRS.  Data storage, retrieval, analysis and presentation are core requirements for revenue management and data base management systems, just as they are for the CRS.

These functions place huge incremental demands on CRS resources, requiring real-time electronic interaction which often vastly exceeds the original design parameters of many central reservation systems.  The impact for CRS vendors has been painful soul searching as they evaluate their basic business directions and the major redesign/redevelopment commitments needed if their systems are to be re-engineered to support 21st century user requirements.

LOOKING FURTHER . . .

So, is an integrated central data storage, information analysis and transaction processing package, seamlessly interfaced to property, CRO, global distribution and Internet sales systems the final shape of hotel technology?  The answer is an emphastic, “No.”  Rather it is one step in a continuing process, the shape of whose next step is already taking form.  Cendant Corporation, merging the hospitality resources of HFS, Incorporated with the contacts and networks of CUC, suggests the shape of the next step.  So does the re-engineering of Carlson Hospitality who, with Accor, co-owns Carlson Wagonlit Travel, and who is embarked on a program to selectively share their data resources.

The next step in the central reservation odyssey will bring merger of centralized hotel data bases with non-hotel data warehouses.  Leveraged by the Internet as a finely targeted, indeed consumer-specific distribution medium and the development of direct supplier-buyer connections (potentially broadening “disintermediation” to include not only travel agents but also GDSs and switches as well), that step will use massive data pools, examined with sophisticated analysis tools, to chart trends and identify marketing opportunities, responded to with highly targeted (often Internet delivered) offers.

The role of the CRS will change in the next five years — remaining a mission critical function but merging into a unified, mega corporation marketing machine — which will reshape the relationship of every hotel with its guest.  At least, that’s the way I see it.