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Twitter, corporate blogs, LinkedIn, or a myriad of other platforms, social media is rapidly changing the networking landscape. In addition to SEO [search engine optimization], now social media optimization (SMO) and, online reputation management (ORM), are emerging as viable factors in managing effective online visibility.1

Overview of the Reservation System

The hotel industry is powered by sales derived from the use of computerized reservations systems. The systems used to fill rooms consist of the hotel’s primary efforts (via marketing and sales and use of their own brand reservation system), their toll-free number, global distribution systems (GDS), travel agents, and third-party sources such as wholesalers who buy rooms from the hotel and resell them on the Internet. The following information shows how hotels rely on a combination of these well-organized systems to produce a profit.

Choice Hotels International

The following information on Choice Hotels International, (formerly Bass Hotels & Resorts), Carlson Hospitality Worldwide, and Pegasus Solutions provides a concise view of the importance of computerized reservation systems to the hospitality industry.

Choice Hotels International, with 5900 franchisees in 30 countries and territories, and with more than 479,000 rooms, operates under the Comfort Inn, Quality, Clarion, Sleep Inn, Econo Lodge, MainStay Suites, Rodeway Inn, Comfort Suites, Cambria Suites, Suburban Extended Stay Hotel, and Ascend Collection brands. Choice’s implementation of a new training program for reservations in 2004 assisted in the success of their reservation system.

By fall 2007, [the] central reservation system had handled six $10 million days and two $11 million days of gross revenue. The training improvements also resulted in a conversion increase from 36 percent to 43.8 percent in the last four years. This conversion brought an incremental $5.6 million in revenue through [the] reservations centers in 2007.2

Hilton Hotels

Hilton Hotel Corporation has taken a new approach to managing its reservations services by developing a home-based reservation service.

Hilton currently has more than 3000 hotels and 500,000 rooms in 74 countries and territories. Keeping those rooms booked is Hilton’s top priority. The challenge for managers at Hilton Reservations & Customer Care is to provide high-quality customer service as efficiently as possible. The company decided that a work-at-home program for

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its call center staff could both increase its quality of customer service and decrease its call center costs. Hilton Reservations also saw in work-at-home programs an opportunity to reduce its number of call center locations, potentially resulting in savings on real estate, power, natural resources, and other physical support costs. The group has since reduced call center staff numbers enough to close one full call center and shift the work out to 200 home-based agents. In this way Hilton Reservations avoids costs associated with rent, utilities, and maintenance.

To outfit an agent completely, Hilton Reservations supplies a Wyse client, Netgear firewall, Citrix license, and a Microsoft Terminal Server license. This costs approximately $1200, which compares favorably with the $1300 it costs to outfit an agent station at a call center. “Saving $100 on equipment costs per employee may not sound like much,” says Rick Sloane, IT support manager for Hilton Reservations and Customer Care, “but we are rolling this out to 2500 individuals throughout time, representing close to $250,000.” Hilton also saves resources by adjusting the hours available to its work-at-home staff to match changing levels of demand. This enables Hilton to respond to seasonal variance and to deliver excellent customer service, with minimal wait times for incoming callers, without having to pay staff when it doesn’t need that extra capacity.

Although the amount the company pays per hour worked has gone down significantly, overall the performance and quality of services agents deliver to Hilton customers has dramatically increased. “With the convenience and flexibility of working at home, we attract more applicants and can afford to be more selective,” says Sloane. “Many applicants already have full-time jobs, but [they] can work extra hours if they don’t have to drive to a workplace and if they can choose their own hours. Agents use an online program to build their schedule each week, signing up for specific hourly slots to meet expected levels of demand.”3

Marriott International

Marriott International has more than 3200 lodging properties in the United States and 66 other countries and territories. Executives have sought additional marketing expertise in booking sources, rates, and length-of-stay patterns from TravelCLICK, Inc. The following information provides insight about managing a reservation system, reviewing guest-stay data, forecasting, and evaluating the competition.

Marriott International recently signed an agreement with TravelCLICK Hotelligence® in 150 of its select service and extended stay properties including Courtyard, Residence Inn, Fairfield Inn, TownePlace Suites, and SpringHill Suites. Hotelligence reports will provide Marriott properties with insight on booking sources, rates, and length-of-stay patterns for their individual hotels and for hotels they define as their competitors. By 2012, 65% of the largest companies—like Marriott—will leverage information, processes, and business intelligence tools to make informed, responsive decisions on significant changes in their business and markets.”4

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Global Distribution Systems (GDS) in Securing Reservations

A global distribution system (GDS) is a distributor of hotel rooms to corporations such as travel agents that buy rooms in large volume. GDSs that play a prominent role in securing guest reservations include Amadeus, Galileo, SABRE, and Worldspan. The following details the concept of their operations.

TravelCLICK, is a Global Distribution Systems (GDS) that also has capability for measuring advertising, reach to a travel agent audience. A new feature that has been added is the best available rate (BAR) display in their ads. These features increase transparency and functionality. The constant update of BAR data increases the likelihood of a booking. Also, next-generation methodology pinpoints participating travel agents.5

How important is electronic distribution as a means of gaining reservations and boosting revenue? Representing almost 30 percent of hotelier bookings, in 2008 GDSs delivered over 115 million room-nights with a revenue value of almost $20 billion.6

Role of the Internet in Securing Reservations

The business and pleasure traveler have entered the marketplace with a great degree of sophistication. Armed with information from advertising television promotions, direct mail promotions from credit cards, airline frequent flyer incentive plans, Facebook, LinkedIn, Twitter, and other promotional sources, they want to secure the best rates and value for their accommodations. They search the Internet for the best price and make sure they are satisfied with their hit. How did this free marketplace come about? How did it seem to become a buyer’s marketplace? Why do hoteliers grimace at the thought of the Internet rate? The following discussions on the background of room rates offered via the Internet, the effect of the Internet on pricing rooms, and consumers’ use of the Internet in making reservations show how technology has changed the way hoteliers do business. Jerome Wise, vice president of eCommerce for TravelCLICK International, reports, “According to Google™, networking is going to be the second-most-popular online activity by 2012, overtaking shopping and surpassing both communication—such as email—and entertainment.” He adds, “Hoteliers who explore social networking early on in its development will have a clear competitive advantage as it matures.”7

Background on Room Rates Offered via the Internet

Sharon H. McAuliffe outlines thoughts for you to consider on room rates offered via the Internet. Prior to the Internet’s entrance into the marketing of rooms, the only public rates available for consumers were those published in brochures or obtained by telephoning the hotel property or a travel agent. Any discounts were offered to wholesalers and corporate clients based on their volume of business or length of stay. When the dot-com

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mania hit consumers, wholesalers decided to advertise free offers to entice consumers to use the Internet. This left a lasting impression on the consumer’s purchasing manner. An initial wholesaler offered to take empty hotel rooms into inventory on the Internet, and hoteliers were grateful to sell the rooms at low sale prices. Internet volume was light, and everything seemed fine. Then other Internet sites began to offer similar models with discounts and a guaranteed lowest price. The result is a transparency of rates. Guests can explore room rates before check-in to see if their guaranteed room rate has been offered at a lower price online.8

However, a new concept—customer relationship management (CRM), or management of guest services with technology—has entered the hoteliers’ workaday world via electronic media. Max Starkov provides insight into the electronic application of CRM.

The truth is that CRM in travel is much more than technology or database management. CRM and its online application, e-CRM, are business strategies aiming to engage the customer in a mutually beneficial relationship. Electronic customer relationship management (e-CRM allows travel companies (travel suppliers and online travel agencies—OTAs) to engage customers in strong, personalized and mutually beneficial interactive relationships, increase conversions and sell more efficiently. The main components of an e-CRM strategy in travel and hospitality include the following:

■Know Your Customer

■Customer Service

■Personalization

■More Efficient Marketing

■Build Customer Loyalty9

Effect of Internet on Pricing Rooms

Visitors to a hotel’s website must be turned into guaranteed reservations. An article from SynXis shows how this marketing challenge of room pricing is managed:

Hoteliers using Guest Connect Booking Engine are already reporting significant increases in both the volume of bookings and conversion rates from visitors to their websites. Guest Connect was developed by SynXis, the Sabre Holdings.

Guest Connect templates guide the flow of the booking process and enable the hotelier to incorporate the specific product elements that will best merchandise their property or chain, from expanded property descriptions and rich images to dynamic packaging, promotional pricing (with “slash-through” pricing), room preference selection, upgrades or links to a virtual concierge for additional services. In addition, hotel managers have access to integrated, comprehensive tracking tools that give a complete view of their return on investment (ROI) for online marketing efforts.