HSMAI Section: How to Choose a Reservation Representation Company

HSMAI Section: How to Choose a Reservation Representation Company

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October 27, 2017
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John Burns - john@burns-htc.com

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This article describes the role that reservation representation services play in achieving/enabling wide visibility and online bookability for independent hotels and hotel groups. 
 
It discusses the services that these companies provide and offers guidance on the process of selecting a representation company for a hotel or hotel brand.
 
I wrote the first version of this article in 2001, and updated it in 2011. Since then, electronic distribution – attracting reservations through electronic booking channels, especially direct bookings on the hotel’s or brand’s own website – has become an urgent priority.  
 
Branded hotels generally receive connectivity and distribution services through their affiliation with the parent company. 
 
Independent hotels and many small- and mid-size brands use reservation representation companies to gain full spectrum access to electronic and conventional sales channels. 
 
These companies offer persuasive, easy-to-use booking engines for desktop and mobile sites, plus connectivity to online travel agencies and global distribution systems. They also provide optional access to equally vital services like voice reservation center support, search engine marketing, metasearch management, travel management company corporate programs, and analytics. 
 
Selecting the representation company with a tool kit and support program that will accomplish this objective is one of the more important decisions a hotelier will make.
 
As a distribution and reservations consultant, I’m often asked to help evaluate vendors of these services.  Here’s what I have learned about the selection process.
 
As the number and complexity of reservation channels and the importance of using them astutely has increased, it’s important for hotels to know: 
  • the services they offer
  • the identities of major vendors
  • how the vendor’s capabilities meet their requirements 
Under the Representation Company’s Identity Umbrella 
 
It’s complex and costly to own and operate the sophisticated central reservation system and associated technology a lodging brand needs to sell its hotels in all the electronic distribution channels. But some organizations – primarily the largest ones – consider self-operated reservation technology to be core to their brand’s value to its properties. 
 
Others feel reservation system operation and multichannel connectivity are better left to a reservations representation company. It provides the needed services, freeing the hotel company to concentrate on other activities. In these instances, the GDS listings, the web booking engine, the call center and numerous other activities are branded in the name and style of the hotel company. This is known as private label representation service.
 
In this arrangement, the representation service company processes internet reservations on the hotel chain’s own site. Only that brand’s properties are displayed. Calls to brand-dedicated toll-free numbers are answered with the client’s name: “Good morning, Acme Hotels.” GDS listings are grouped within the hotel chain’s two-letter identification code. 
 
Types of Representation Service Vendors
 
Traditionally, these companies have subdivided into two categories. The first was firms whose core offering was reservation processing – on the website, through OTAs and GDSs, and via call centers.  
 
The second type added extensive sales and promotional programs to those core reservation and distribution service. A membership identity was generally associated with these enhanced representation services. They were often termed soft brands. Examples include Global Hotel Alliance, Leading Hotels of the World, Preferred Hotels and Resorts, Relais & Chateaux, and Small Luxury Hotels of the World.
 
Since this article’s last update in 2011, a third sub-category has emerged -- hotel brand-operated soft brands. These new entrants deliver reservation processing and distribution via in-house systems. They offer brand identity, extensive sales services and critical access to the brand’s frequent guest program. Examples include Ascend Collection (Choice Hotels International), Autograph Collection (Marriott International), Curio Collection (Hilton Hotels) and Magnuson Independents (Magnuson Hotels). These options represent an appealing service opportunity for certain property operators.
 
Timing of Vendor Search and Implementation
 
The process by which an individual property becomes a client of a reservation representation service, regardless of the service subcategory, is relatively simple. It usually takes between 30 and 60 days.
 
If a hotel company has multiple properties and numerous reservation and distribution processes already in place, implementation of a representation service, or switching from one service to another, is a more complex and lengthier process. It can take as long as 60 to 90 days. Steps include:
  • Define requirements
  • Identify suitable vendors
  • Create a request for proposals (RFP)
  • Conduct detailed proposal and capability   examination 
  • Negotiate a contract
Once a service agreement is signed, activation requires a further 45-60 days. In a rush situation, it might take 30 days or less.
 
Hotel chains typically begin to evaluate private label service options and vendor capabilities 12 months before the start date. Sometimes it can take up to 15 months, but it should never be less than 9 months.
 
How to Evaluate Representation Service Vendors
 
The process can range in complexity. It might be as simple as a call or email to the business development staff at these organizations to request a proposal. Or it could be an intensive, detailed RFP process. Regardless of how complicated it gets, you should complete these preparatory steps:
Catalog the services your current vendor provides.
 
Identify what you like and dislike about your current provider. Include vendor responsiveness expectations.
 
Think about your future needs. Identify additional or expanded capabilities you’ll need as your hotel/group and the distribution marketplace evolve in the next several years.
 
Compile channel-by-channel reservation statistics from your current vendor during the last calendar year. Estimate year-end booking volumes for the current and upcoming year. If you want call center services, compile similar data for call volumes.
 
Compile the info you gather in steps 1 through 4 into a document that will serve as your shopping list.  It will help you compare each proposal with your specific needs and rate all your proposals against one another.
 
Key Representation Service Issues 
 
There’s a wide variety of topics to examine when you evaluate representation vendors. A simple requirements summary can be five pages, an extensive hotel chain RFP can reach 75 pages or more. Regardless of the level of detail, these topics are basic to all vendor evaluations. Click here to view the topic list
 
In closing, selecting a distribution partner is one of a hotel or hotel group’s most important decisions. Understanding reservation representation service options and identifying key evaluation criteria can lead to a more structured and successful process.
 
John Burns is president of Hospitality Technology Consulting and he can be reached at john@burns-htc.com.

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