Distribution: Part 2 - Securing Broad Electronic Connectivity for Hotels & Lodging Brands: Choosing a Reservation Representation Company Revisited

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June 16, 2011
Distribution
John Burns - John@burns-htc.com

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Part 1 of this article from the spring issue of Hospitality Upgrade identified several of the key issues related to selection – by a single hotel or by a hotel chain – of a reservations representation company. It identified the variety of reservations representation service options available and the timetable for the evaluation and implementation process.

Part 2 will identify suggested steps in vendor evaluation, recommending a structure which will lead to a thoughtful, sufficiently detailed vendor selection process, as well as identify many of the prominent representation service vendors serving the lodging industry today.

The initiation of the evaluation process can range in complexity from a call or email to business development staff at these organizations to request proposals from them, to a considerably more intensive approach involving development, distribution and evaluation of a detailed request for proposal (RFP). Regardless of the degree of complexity selected, completion of several preparatory steps is wise:

  1. List your service needs and performance priorities that you expect from your representation service vendor (and service vendors in general).
  2. Catalog the services supplied by your current vendor.
  3. Identify the strengths that you value in that service as well as shortcomings that are a concern to you.
  4. Think about your future needs.  Identify additional or expanded capabilities you will require as your company and the distribution marketplace evolve in the next several years.
  5. Compile channel-by-channel statistics for reservations delivered by your current vendor during the last calendar year and estimate the year-end booking volumes for the current year and upcoming year.  If seeking call center services, compile similar data for call volumes.
  6. Drawing on the above preparatory research, prepare a comprehensive list of the services needed and performance standards expected from your representation services vendor.

Step 6 is essential. At its most basic level, it is your shopping list to use in discussion with prospective vendors. At the other end of the spectrum this list is the core of an RFP. Fleshed out with detailed questions probing the presence of specific capabilities, it provides a definitive description of your needs and asks the vendor’s capacity to address them. Regardless of the degree of detail you determine to be appropriate, the document allows you to compare each proposal to your specific needs, as well as to compare the proposals against one another.

This summary only overviews the topics to be raised and evaluated with prospective service suppliers. Typically, several, sometimes many, more detailed questions would be asked on each of these topic areas. It is easy to see how these documents – be they requirements summaries or detailed RFPs – can quickly become lengthy.

Once the requirements document has been prepared, the next step is to classify individual reservation-related services as essential, desirable or useful. This process serves two purposes. First, the absence of one or more items classified as essential would probably eliminate that vendor from further consideration. Second, once the time comes to compare vendors, you and your staff will be better equipped to weigh the appeal of the features a vendor offers against their importance to your operation.

Typically, several vendors are contacted. In due course replies, ranging from brief proposals to detailed RFP responses, are received. The next task is to examine those replies, to determine if – and how fully – they indicate the presence of the essential, desirable or useful functions or services. Then comes the fee comparison.

Reservations representation fee structures differ substantially from vendor to vendor. An apples-to-apples fee comparison is not easily achieved. Such a comparison is most accurately achieved by taking a year of your reservation activity statistics and then, after dividing the fees into the categories of implementation fees, annual/monthly fees and transactional fees, calculating the total cost for processing of that year’s activity using each vendor’s proposed fees.

Evaluation of proposals from several vendors generally results in identification of one or two companies for further examination. Intensive meetings with representatives of the finalists, during which they demonstrate their systems and answer your detailed questions related to their proposal and their overall capabilities, are often very valuable.

While rarely the primary element in the final decision, fees are always a key consideration in the vendor selection. Frequently the opportunity exists for negotiation of these fees.

Once a vendor has been selected, and an acceptable service and fee formula negotiated, the final step is review, and possibly revision, of the vendor’s service contract. Written as they are by the vendor, they will naturally favor them. Addition or revision of sections, to ensure adherence to agreed service levels, to document addition of custom services and to provide appropriate balance between the parties to the agreement, is the next and final step.

With completion and signing of the service agreement, the implementation process is ready to begin, culminating in successful activation of your property or chain as a reservations representation service client.

John Burns is the president of Hospitality Technology Consulting. He can be reached at John@burns-htc.com or by phone at (480) 661-6797.

©2011 Hospitality Upgrade
This work may not be reprinted, redistributed or repurposed without written consent.
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Choosing a Reservation Representation Company Checklist

Key Issues to Query
There is a wide variety of topics to examine when evaluating representation vendors. A simple requirements summary can run five to 10 pages; an RFP developed by a hotel chain can reach 50-75 pages or more. Regardless of the level of detail in which you chose to examine and evaluate the vendors who you are considering, the following topics are basic to all vendor evaluations:
 
Vendor Organization
Corporate history and structure
Key staff
Customer base and references
Financials
 
Reservation System Functions/Capabilities
  • Central reservation system (CRS) ownership/management–direct or gained from a third party
  • Availability/rate data capacity– Unlimited capacity for room types, rate types, room types/rate type combinations, rate seasons in year, number of days in advance that data may be loaded, that reservations may be accepted
  • Restrictions available for use (MLOS, CTA, etc.)
  • Level at which restrictions and policies (guarantee, deposit, cancellation) may be applied - At room type level, rate type level, room type/rate type combination level, etc.
  • Revenue management supporting functions including availability of rate tiering, rate offsets, hurdle rate and  BAR facilities; interfaces to stand-alone revenue management systems
  • Currency conversion facilities, ability to support many nations’ tax structures
  • Length of property descriptive information held in the CRS for presentation in each distribution channel, options for multilingual content
  • Content management facilities for storing and distributing photographs and rich media
Web Booking Engine (WBE) 
Capability of the WBE to fully and persuasively present your lodging, including ability to adjust IBE’s look and feel to harmonize with your website, adequate length of room descriptions, option for multiple photos of each room type, dynamic packaging facility, up-sell option, overall clarity/ease of booking process, pre-arrival and post departure email options and analytics facilities.

 
Mobile Booking Applications
The presence of shopping and booking applications for mobile devices, and a commitment to continue evolving these at a rapid pace.

On-property System Access Portal
Capabilities available to authorized on-property staff, including: reservation download, inventory and rate management, report production and other functions.
Clarity and user friendliness of the displays.

Interfaces (CRS/PMS)
Brands/versions of property management systems for which one and two-way interfaces are currently available. Data transferred in these one and two-way interfaces.
 
 
Interfaces (GDS)
Global distribution systems to which the CRS has connections; data maintenance tools and services for data maintenance.

 
Interfaces (OTA)
Online travel agencies to which direct electronic and non-direct connections are maintained, data transmitted on those links.
 

Reservation Services
Voice Reservation Services

  • Central reservation center (CRO) location(s) – North America and Worldwide – and countries/languages served CRO operator – the vendor or a third party?
  • CRO operating hours
  • Guaranteed maximum average speed to answer and maximum abandon rate for calls to the CRO
  • Private label voice reservation service options
  • Overflow/after-hours voice reservation processing on a private label basis
Implementation Process
Implementation process; typical implementation timetable
Training resources available to property, regional and corporate staff

 
Data Base Maintenance
Data maintenance responsibilities of property staff and corporate;
Data maintenance duties completed by vendor’s staff and performance commitments

 
On-going Training
Available classes, coaching and online resources

 
User Support
User support services available to on-property and corporate staff including days/hours of availability

 
Reports/Data Warehousing/Data Analysis
Reports available, including on-demand report production options; graphical options
Options for subscription to periodic automated distribution of reports
Dashboard availability and report customization options
Supplementary data warehousing and data analysis facilities, available either free of charge or at an additional fee

 
Other Functions/Capabilities
Travel agent commission processing services
Corporate/preferred/negotiated rate program administration
PCI DSS compliance certification
Adherence to HTNG and OTA
Other functions or services

 
Fees
All fees within these categories:
  • Implementation fees
  • Annual/monthly fees
  • Transactional fees
  • Other fees that may apply
  • Minimum monthly/annual revenue requirements
  • Formula for fee increases in subsequent years
  • Contract length
 
 
Reservations Representation Service Vendors
 

A number of long-established organizations offer reservation representation services to the global lodging industry.  These organizations include:

  • Design Hotels AG – Berlin, Germany (http://www.designhotels.com)
  • FastBooking – Paris, France (www.fastbooking.net)
  • Genares Worldwide Reservation Services – Irving, TX (www.genares.com)
  • InnLink Central Reservation Services, Hendersonville, TN (www.innlink.com)
  • InnPoints Worldwide – Albuquerque, NM (http://www.innpointsworldwide.com)
  • Luxe Worldwide Hotels – Los Angeles, CA (www.luxehotels.com)
  • Magnuson Hotels – Spokane, WA (www.magnusonhotels.com)
  • Pegasus Solutions (including Utell Hotels & Resorts) – Dallas, TX (http://www.pegs.com)
  • Preferred Hotel Group (including Summit Hotels & Resorts, Sterling Hotels, Historic Hotels of America) – Chicago, IL (www.preferredhotelgroup.com)
  • Relais & Chateaux – Paris, France (www.relaischateaux.com)
  • Sabre Hospitality Solutions – Southlake, TX (www.sabrehospitality.com)
  • Sceptre Hospitality Resources – Greenwood Village, CO (www.esceptre.com)
  • Small Luxury Hotels of the World – London, UK, (www.slh.com)
  • SupraNational Hotels – London, UK (www.snrhotels.com)
  • The Leading Hotels of the World – New York, NY (www.lhw.com)
  • TravelClick – New York, NY (www.travelclick.com)
  • TRUST International – Frankfurt, Germany (http://www.trustinternational.com)
  • Worldhotels – Frankfurt, Germany (www. worldhotels.com)

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