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IT 118- Chapter 3


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IT 118- Chapter 3

  1. 1. Chapter 3 Reservation Systems Managing Technology in the Hospitality Industry Sixth Edition (468TXT or 468CIN)© 2011, Educational Institute
  2. 2. Competencies for Reservation Systems1. Describe the role played by e-distribution systems and distinguish global distribution systems from Internet distribution systems.2. Explain the use of distribution service providers and extranets in meeting the needs of hotels and the e- distribution channels they use.3. Summarize the services provided by intersell agencies.4. Distinguish affiliate from non-affiliate central reservation systems.© 2011, Educational Institute (continued) 2
  3. 3. Competencies for Reservation Systems (continued) 5. Identify the basic functions and services performed by a central reservation system. 6. Explain the elements and procedures of a property- level reservation system. 7. Describe the revenue effects of using various distribution channels and explain the difference between the merchant model and the wholesaler model.© 2011, Educational Institute 3
  4. 4. Electronic Distribution Systems • The selling of products or services over the internet or some electronic medium. • A less expensive source of bookings compared to traditional models© 2011, Educational Institute 4
  5. 5. Electronic Distribution Systems • Has 2 major categories: – Global Distribution Systems – Internet Distribution Systems© 2011, Educational Institute 5
  6. 6. Global Distribution Systems (GDSs) • Owned by airlines • Used by travel agents • Formed as joint ventures linking a number of diverse businesses.© 2011, Educational Institute 6
  7. 7. Global Distribution Systems (GDSs) • Access travel/tourism inventories worldwide • Link to reservation systems of: o Hotels o Airlines o Car Rental Companies o Travel agencies© 2011, Educational Institute 7
  8. 8. Global Distribution Systems (GDSs) • Smart Switch – Translation of reservation transactions into as many unique formats. – Allows users to share data from different reservation systems without having to deal with complex formats, files and operating systems.© 2011, Educational Institute 8
  9. 9. Global Distribution Systems (GDSs) • Seamless Integration – Links GDS and a hotel/suppliers CRS. – All distribution channels operate from the same data base (Singe image inventory)© 2011, Educational Institute 9
  10. 10. Global Distribution Systems (GDSs) • Examples include: – Sabre – Galileo – Amadeus – Wordspan© 2011, Educational Institute 10
  11. 11. Internet Distribution Systems (IDSs) • Owned by independent Web companies • Used by consumers; functions as self- service e distribution channels. • Links to: o Hotel central reservation systems o Switching company o GDS© 2011, Educational Institute 11
  12. 12. Internet Distribution Systems (IDSs) • Two types of Processing Models – Transparent Sites – Opaque Sites© 2011, Educational Institute 12
  13. 13. Internet Distribution Systems (IDSs) • Transparent Sites – The names and locations of Candidate hotels appear in the qualifying range of a customers search criteria. – Examples: Expedia,, travelocity© 2011, Educational Institute 13
  14. 14. Internet Distribution Systems (IDSs) • Opaque Sites – The names and locations of Candidate hotels do not appear. – Marketed by price and star stratification. – The hotels brand and location is revealed on the completion of the purchase. – Opaque Sites work on an auction basis – Examples: and Hotwire© 2011, Educational Institute 14
  15. 15. DSP Connectivity • Distribution Service Provider – Also known as the Switching Company – Links between a room and rate data source and the Electronic Distribution channel. – Communicates room and rate availability data from a CRS to a participating GDS and IDS entity. – Examples include: Pegasus, Travel Click© 2011, Educational Institute 15
  16. 16. Extranet Connectivity • Extranet – A secure external website that links e- distribution participants to the hotel/airline. – A website or partitioned and password- protected portion of a website that is available to a select users. – Simplifies data transfer and acquisition. – Examples: and© 2011, Educational Institute 16
  17. 17. Intersell Agencies • A reservation network that handles more than one product line. • Handles reservations for an airline, car rental and hotels. • A one-stop-shop© 2011, Educational Institute 17
  18. 18. Central Reservation Systems • An external reservation network that centralizes marketing and sales efforts in relation to the reservation process. • Has 2 types: – Affiliate – Non-Affiiate© 2011, Educational Institute 18
  19. 19. Affiliate reservation systems (hotel chains) • A Hotel chains central reservation system where all participating properties are contractually related. • All properties are represented and is required to provide availability and inventory data on a timely basis.© 2011, Educational Institute 19
  20. 20. • Overrun Facility – Properly selected to receive reservation requests after chain properties have exhausted room availabilities.© 2011, Educational Institute 20
  21. 21. Non-affiliate reservation systems • A Subscription system that links independent properties. • Subscribers take responsibility for updating the system with accurate room rate and availability of data. • Leading Hotels of the World • Preferred Hotels • Distinguished Hotels© 2011, Educational Institute 21
  22. 22. CRS Functions and Services • Real time information should be given • Its goal is to improve guest service while enhancing profitability and operating efficiency.© 2011, Educational Institute 22
  23. 23. CRS Functions and Services • Providing access to special room rates and promotional packages • Instant confirmation of reservations • Communicate with major airline, travel and car rental agencies • Create comprehensive reservation records© 2011, Educational Institute 23
  24. 24. CRS Functions and Services • Provides properties with necessary technology • Communicates room availability to e-distribution channels • Delivers reservations to properties • Maintains statistical information (call volume, talk time, conversion rates, denial rates) • Provides customer relationship management (loyalty programs) • Maintains demographic information about callers • Bills properties for handling reservations© 2011, Educational Institute 24
  25. 25. Property-Level Reservation Systems • Includes a property’s own website. • Involves a guest contacting the hotel’s reservation department directly to ascertain room rates and availability information.© 2011, Educational Institute 25
  26. 26. PMS Reservation Process 1. Reservation inquiry 2. Determination of availability 3. Creation of the reservation record 4. Confirmation of the reservation 5. Maintenance of the reservation record 6. Generation of reports© 2011, Educational Institute 26
  27. 27. PMS Reservation Reports • Rooms availability report • Revenue forecast report • Reservation transaction record • Expected arrivals list • Expected departures list • Commission agent report • Turnaway report© 2011, Educational Institute 27
  28. 28. Distribution of Revenues • Arbitage – The simultaneous purchase and sale of an asset in order to profit from a price difference. – Purchase of a hotel room/airline ticket using a GDS entails losses for the supplier due to discounts and commissions. – To offset or mitigate the effects of the losses properties try to sell more.© 2011, Educational Institute 28
  29. 29. Distribution of Revenues • Merchant Model – Also called the mark up model – Negotiation of reduced room prices with a supplier hotel. (net rate) – Merchants are responsible for marketing the rooms at discounted rates – Adds interest to net rate – Examples:, orbitz and travelocity.© 2011, Educational Institute 29
  30. 30. Distribution of Revenues • Wholesaler Model – Commission Model – The hotel pays a commission to the wholesaler based on a percentage of the hotel’s net rate. – Hotel sets the selling price and the wholesaler receives an agreed upon sales commission. – Suppliers prefer this type of arrangement – Examples: Expedia,© 2011, Educational Institute 30