Going Direct

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October 01, 2010
CounterPoint
Stephen Fitzgerald

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By going direct from a central reservation system (CRS) to a distribution channel (GDS and OTA), hoteliers will gain many benefits, most importantly that of real-time availability of rates and inventory (ARI).  This is a significant difference from caching data (delivering it in large batches), which in many cases means hours of delay and ultimately a chance of lost revenue.  The caveat to this is that the CRS must be able to handle large amounts of shops and push of ARI data.  You must have a dedicated infrastructure to support ARI shopping, including multiple redundant servers for each unique ARI function (availability processing and message transmission for example).

Once connected directly to key distribution channels via the CRS, a hotelier can run all business and revenue management decisions through that central system and those decisions will then be distributed in real time. For a hotel to achieve this revenue management goal, only real time connectivity will ensure that all the appropriate rate calculations are accurately represented, to ensure that the guest has a comprehensive view of the hotel content regardless of the site that they visit while still allowing the hotel to control channels independently as needed.

Unfortunately, with many OTAs and distribution sites the ability to distribute rates in real time is not an option.  However, in those cases, it is still possible to use your CRS to manage all of your rates and use a push model and apply as much calculation of your rates and availability as the third-party sites can handle every time you make an update to your ARI.

The good news is that we are seeing more and more of a trend where OTAs are seeing the need for real-time updates so that they are able to get rate calculations that are accurate for the consumer.  They realize that it has become increasingly more difficult for them to ensure that they are getting accurate rates because a revenue management decision could impact rates on many factors that may not be accounted for in a push of ARI or how rates are updated in an extranet manager. 

The logical next step is that there needs to be more integration of extranet management tools into the CRS or at minimum to those systems to where the revenue management decisions are being applied.  Extranet management systems are an effective way to reach additional sites that may not be big enough or generate enough bookings to warrant a direct connection —this takes into account the “long tail” approach.  However, even the extranet managers do not need to be just stand alone versions —they can connect through the CRS so business decisions about pricing and availability can stay consistent.

While some OTAs are connecting or are trying to connect directly to a hotel chain CRS or even the PMS, it is imperative that those systems can handle the load of queries that are being placed on them.

Still another argument for connecting directly from a CRS to the different distribution sites is the issue of internationalization.   By leveraging a single system with real-time connectivity, hotels can reach a global audience with consistent content, while deploying an international message in multiple languages and currency.

And, a final reason for connecting directly is change.  The pace of change in the hotel industry is accelerating.  Direct XML connections enable the most robust content —both current and future —to be delivered.  Distribution sites will continue to evolve.  Hoteliers need to make sure that they are taking advantage of direct connectivity to those points of sale so that as merchandising, packaging and other opportunities arise on those channels, their connectivity can enable, or can quickly enable, that type of messaging.

Having all of your data in a single, scalable CRS platform and using the appropriate direct connects from that system will provide hotels with a consistent, easy to manage, global approach to reservation management both today and into the future.
 

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