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Should Your Inventory Be Managed Through the PMS or the CRS?

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June 16, 2006
Hotel | Distribution
Scott Brodows

© 2006 Hospitality Upgrade. No reproduction without written permission.

The central reservations system (CRS) is the place where a hotel should distribute and sell its rooms. CRS providers have developed technology that enables hotels to flexibly merchandise rates and inventory so as to increase the property’s sales conversion rate. The property management system (PMS) is best used to facilitate a guest’s stay and to manage guest profile data to be used for future stays.

There are several other arguments to support managing inventory through your CRS including the all important distribution which can be simplified with a good connectivity solution. Using the CRS to manage inventory also helps with customer loyalty and enables disciplined revenue management practices.

Connectivity – CRS is King
Depending on a hotel’s market mix, a large percentage of rooms may be sold through distribution channels outside of the hotel (e.g., call center, travel agencies using GDS, consumers booking through the myriad of travel Web sites). In order for a hotel to have access to these outside distribution channels, to display their inventory, they must be connected. CRS technology provides such a connection. Since consumers access hotel availability through these channels directly from the CRS, hotels must manage their room rates in the CRS to ensure accuracy. So instead of having the property personnel manage two separate inventories, why not have them manage rates and also sell from the CRS and limit the use of PMS to walk-in reservations?

More and more PMS companies are attempting to connect directly to the third party Web sites. However, the CRS has greater benefits to developing these connections for the hotel as well as for the third party sites. These include:

• When the PMS connects a hotel directly to the third party Web site, it is a one-to-one relationship. Meaning there is a huge time and configuration investment on the hotel’s behalf for each and every site. Since each hotel has very unique rate and room set ups, the PMS companies do not gain efficiencies in this process. The CRS companies have already solved this problem. If the hotel uses the CRS for a connection there are repeatable processes across multiple vendors and hotels that exist to make the connections easier after the first one has been developed.

• A third-party Web site wanting access to a hotel’s rates and inventory would prefer a one-to-many solution. A CRS is an enterprise solution, offering inventory and rate accessibility to thousands of hotels from a one time development effort. If the distribution portal chooses to connect to a hotel’s PMS, the distribution portal also has to develop and configure each time due to the uniqueness of each property. Using the CRS as an enterprise solution saves the parties utilizing the direct connect significant time and development dollars.

Customer Loyalty
For those hotels that want to create loyalty with its customers through hotel-direct rate promotions, it is easy to manage the rates in the CRS by a specific distribution channel. Since the CRS has the capability to manage the rates by distribution channel hotels can make rates available on its own Web site while not allowing other channels access to certain promotions or packages. Hotel guests benefit from being loyal to your hotel and hotel Web site. This "channelness" does not exist in most property management systems because they were not designed to distribute inventory across multiple channels.

Revenue Management
Managing rates in the CRS ensures that the revenue manager knows what consumers, travel agents and call center agents are seeing. Marriott was a pioneer in hotel revenue management. Marriott revenue managers perform all rate management within the CRS and they have designed tight interfaces from the CRS to the yield management and property management applications.

The CRS is the single application that is common across 100 percent of the properties within a hotel chain. Some chains offer several different PMS options but there is always only one CRS per hotel chain. Therefore, mastering rate and inventory management within the CRS ensures that revenue managers will be effective regardless of what property they transfer to within the existing hotel chain.

Selling by Class of Room, Not Room Types
There is the on-going battle of trying to accommodate each guest’s room type requests. Should you sell by the class of room or by each specific room type? Relief for this dilemma comes in the way of the CRS. The PMS only allows a room to be sold in a specific room type assignment, but the CRS allows a room to be sold not committing at the time of sale to a room assignment yet indicating a certain class of room should be removed/reserved from inventory.

Offering rooms to the consumer by class offers the hotels the flexibility of committing to a class of room such as deluxe, standard, suite and ocean-view while not necessarily forcing a customer to choose king or double, smoking or non-smoking at the time of reservation. The ability to sell by class of room in the CRS allows for the customer who truly has no room type preference beyond class of room to specify deluxe or concierge as the room class and a run of house room type. This CRS feature is significant and advantageous for a hotel to allow for rooms to be sold while not forcing a commitment of room type to every customer. This offers the flexibility of having certain room types not go completely sold out and allows a customer to check in and decide on a choice of room types at that time.


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