Types of Reservation Systems
RESERVATION 1
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Reservation
A well-organized reservation system allows hotels to ensure a steady flow of guests into their properties. Hotel chains offer their members the ability to fill 30 percent or more of available rooms on a nightly basis.
Independent hoteliers have the onerous responsibility of creating exciting marketing programs to capture room business. Easy access to a hotel’s data bank of rooms helps in fulfilling the customers’ needs as well
as in reaching a targeted daily occupancy rate, average daily rate, yield percentage, and Rev-PAR (revenue per available room). A reservation system represents the primary means of producing positive cash flow and
a favorable income statement.
The hotel industry is powered by sales that are derived from the use of computerized reservations systems. The following information on Choice Hotels International, Six Continents Hotels (formerly Bass Hotels & Resorts), Carlson Hospitality Worldwide, and Pegasus Solutions provides a concise view of the importance of computerized reservation systems to the hospitality industry.
Types of Reservation Systems
The franchisee is a hotel owner who has access to a national reservation system and receives the benefits of the corporation’s management expertise, financial backing, national advertising, and group purchasing. A franchise member of a reservation system or a member of a referral system gains significant advantages from combined efforts of interhotel property referrals, a system in which one member-property recommends another member-property to a guest, and national advertising.
A referral member of a reservation referral system, a worldwide organization that processes requests for room reservations at a particular member-hotel, is a hotel developer/owner who has access to the national
reservation system. Hotels that are members of the reservation system are more than able to justify these costs: for example, a chain property may obtain 15 percent to 30 percent of its daily room rentals from the national reservation system, depending on local economic and market conditions. Compared to the costs incurred by an independent property that must generate every single room sale with individual marketing and sales efforts, franchise referral costs seem minimal.
RESERVATION 2
Sources of Reservations
Guest reservations come from a variety of market segments. Some of the more common groups include corporate clients, group travelers, pleasure travelers, and current guests who want to return to the same
hotel. This is only one way of classifying guest reservations. The purpose of analyzing these segments is to understand the needs of each group and provide reservation systems to meet their needs.
Forecasting or rooms forecasts, which involves projecting room sales for a specific period, is a natural next step after the data from the reservation process have been collected. This step includes previewing
the effects of reservations on the income statement, scheduling labor, and planning for the use of facilities. In addition to presenting a practical method for preparing a rooms forecast (sometimes referred to as a
“projection of room sales”), this section also indicates how such a forecast can be used as a means of communication with other departments. One of the purposes of a rooms forecast is to preview the income statement. It enables the hotel managers to determine projected income and related expenses for a certain time period.
The concept of overbooking–accepting reservations for more rooms than are available by forecasting the number of no-show reservations, stayovers, understays, and walk-ins, with the goal of attaining 100 percent occupancy – is viewed with skepticism. As future hoteliers, you will face the onerous task of developing a policy on overbooking. The front office manager has the responsibility of administering this policy.
Confirmed reservations, prospective guests who have a reservation for accommodations that is honored until a specified time, represent the critical element in no-shows. After that time, the hotel is under no
obligation to hold a reservation. The front office manager must keep accurate records of no-shows in this group. Various types of travelers with confirmed reservations – corporate, group, or pleasure – have varying
no-show rates. For example, corporate confirmed reservations may have a 1 percent overall no-show rate. Group travelers may have a 0.5 percent no-show rate, with no-shows all coming from one or two particular bus companies. Pleasure travelers may have a 10 percent no-show rate. The detailed investigation of each of these categories will suggest methods for minimizing no-show rates.
Guaranteed reservations, prospective guests who have made a contract with the hotel for a guest room, represent a less volatile group because the guest provides a credit card number to hold a room reservation.
Stayovers are currently registered guests who wish to extend their stay beyond the time for which they made reservations. Accurate records on various traveler categories (corporate, group, or pleasure) will reveal
their stayover rates. For example, employees of a corporation who travel with spouses may extend a Thursday and Friday business trip to include a Saturday. Similarly, a group conference scheduled from Monday through Thursday may encourage the attendees to stay longer to sightsee.
Understays are guests who arrive on time but decide to leave before their predicted date of departure. Pleasure travelers may find their tourist attraction less interesting than anticipated. Urgent business may require the corporate client to return to the office sooner than expected.
Maintaining accurate records will help the front office manager to predict understays. A welcome sector of the hotel market, walk-in guests, can enhance daily occupancy percentages when effectively managed.
The front office manager must be aware of the activity in the local area.
Heavy tourist seasons, special tourist events, conventions, and the like will increase the number of potential guests in the area. Awareness of such possibilities helps the front office manager plan accordingly.