Today, the number of walk-ins in the hotel industry drops every year. In the global digitalization era, 75 percent of all hotel bookings are made online. Within that number, 40 percent of the reservations are made via Booking.com, 32 percent — via other aggregators, and 21 percent — through a hotel’s website. That clearly demonstrates the vital importance for hotels to connect to various online booking channels to thrive and attract more customers.
To manage and optimize all the processes related to reservations, reservation software is used. In this article, we will describe the hotel booking process from behind the reception desk, discuss how technology can help you — the hotelier — handle reservations and manage distribution, and give a brief overview of the popular software providers.
So, what is a hotel CRS?
A Central Reservation System, or CRS, is a technology that lies at the heart of a hotel’s functions. It’s a computerized system that contains the hotel’s availability, rates, and inventory (ARI) data and helps manage online and offline bookings. With the help of the channel manager that we discuss below, it distributes the hotel information to various sales channels — such as GDSs, OTAs, independent travel agents, and its own website, — synchronizes reservations, and processes transactions.
Implementing a CRS increases overall efficiency due to the automation of numerous processes, i.e. immediately updating the hotel’s ARI across all distribution channels or sending confirmation emails. Obviously, that speeds up performance, minimizes errors caused by manual operation, and reduces the cost of human labor. Also, the CRS booking capabilities provide an easy way for customers to manage their own reservations which increases their satisfaction and loyalty.
Another benefit involves providing better visibility into the booking activity and other related data, allowing for more comprehensive planning, forecasting, and marketing.
PMS, CRS, channel manager, and booking engine — differences and integration
Sometimes the concepts of PMSs, CRSs, channel managers, and booking engines are understandably conflated as they are closely related and have some overlapping functions. Let’s see how they work and what the distinctions are.
A property management system, or PMS, is a software that helps manage all the operations in a hotel from catering to accounting with a CRS usually being its main module. We have an all-encompassing article about how a PMS and all its parts work.
A CRS is either included in the PMS or can be a stand-alone solution. It’s closely related to the front-desk, as it passes all the information about the new reservations for further processing, and revenue management modules of the PMS, as it makes price changes according to certain variables, thus influencing revenue.
The channel manager connects the PMS and all distribution interfaces. It collects information about the room availability and rates from the CRS and shares it across multiple channels, such as GDSs, OTAs, wholesalers, metasearch sites, and the hotel’s own website through different types of APIs. As rooms get booked, it syncs the inventory information throughout all the online platforms to prevent overbooking and also maintains rate parity. A channel manager can also come as a part of the comprehensive PMS, as part of the CRS if the latter is designed separately, or as an independent software to be integrated with the existing hotel software.
A booking engine is software that is integrated into the hotel’s website and social media pages that helps customers book, pay for, and manage their stay directly. It gets the ARI from the CRS through the channel manager and sends back the booker’s reservation information.
Hotel search and booking process steps
Hotel reservation software is designed to automate and facilitate all the booking-related processes. So, let’s take a closer look at how reservations are created and how technology is involved. A typical hotel reservation process can be broken down into several steps as described below.
- Searching for the options. Nowadays there is a multitude of search engines and platforms to find accommodations. Companies and travel agencies often use a GDS, and individuals mostly browse through metasearch websites and big OTAs. To have all these sources present your hotel’s information to potential customers, you have to integrate with them first and then distribute your ARI through a channel manager. We will discuss the integration options in more detail further on. So, when somebody is looking for accommodations, they have to fill in the dates and room type on the website or terminal to check availability and send the inquiry.
- Receiving an availability inquiry. The channel manager delivers these inquiries to your CRS to get the availability information.
- Checking availability and sending response. At this stage, it’s necessary to verify in the system if the requested room type is available on indicated dates and get back with the result. The two-way integration through a channel manager allows this to be done in a flash, pulling the data from the CRS and shooting it back to the booker.
- Receiving a reservation request. If the booker is satisfied with the rate and decides to stay at your hotel, the reservation request is created with the help of the booking engine (either the booking engine on your side or the OTA’s, depending on the channel) and sent to the CRS. It contains all the essential information about the number of guests, arrival and departure dates, room type, contact details, special requests, etc.
- Confirming and blocking. In case the requested room is still available, it has to be blocked to prevent double-booking. At the same time, a reservation record is created in the CRS that contains all the information related to this booking. An email notification is then generated and sent to the booker to confirm the reservation. Also, it usually contains payment details and cancellation policy.
- Receiving payment. This step is optional as many guests still prefer to pay on arrival. Many OTAs do not require paying in advance, but having a secure payment tool included in your booking engine is a big advantage, as it gives travelers the opportunity to pay in a convenient way and save time during check-in.
- Transferring information to other departments. The reservation record shares all the reservation details with other PMS modules. For example, the housekeeping staff has to be informed about all the expected arrivals in order to appropriately prepare all the reserved rooms; the front desk should have all the information to ensure a smooth guest check-in; the reporting module uses this data to create reports, and so on.
- Optional reservation modifications. Prior to arrival, the booking details might be adjusted. A guest might want to change arrival or departure dates, type of room or desired amenities, number of visitors, etc. If that happens, changes have to be confirmed by the hotel, registered in the reservation record, and shared with other modules.
- Cancellations. Sometimes reservations are cancelled. In this case, the room has to be unblocked to allow for further booking, and, if prepayment took place, a refund has to be issued (if envisaged by the hotel’s policy). As soon as availability changes in the CRS, the channel manager shares this information across different channels.
Depending on the software you choose for your hotel, the number of features offered can be different. Some CRSs only have the basic reservation functionality, while others provide a comprehensive solution having the capabilities traditionally inherent in other modules of the PMS. Let’s take a look at the possible options.
Key reservation features of the CRS
Most CRSs provide similar capabilities to manage the hotel’s reservations. Here are the main features mandatory for a modern hotel to facilitate and streamline the booking process.
Reservations management and synchronization — Keeping track of your reservations can be challenging, especially if you have multiple properties and work with various distribution channels. CRS provides you with an effective mechanism to immediately synchronize all the bookings in one system, not allowing double-booking or overbooking rooms.
Email notifications — besides sending regular booking confirmation and a payment receipt, email automation can be used for promotional purposes, personalized offers, and encouraging feedback.
Group bookings — sometimes there is a need to reserve multiple rooms with a variety of room types and rates, i.e., for a wedding or a big group reunion. A multi-room booking feature facilitates this procedure and allows for making all the necessary arrangements effortlessly.
Cancellations and refund management — this feature allows for handling cancellations, updating room availability in all channels, and automating the refund process.
Integration options — your CRS software has to allow for smooth integration with other solutions and technologies you are already using or planning to implement.
Additional features that come integrated with CRS
A lot of CRS providers offer products with the booking engine, mobile application, and/or channel manager already integrated. That can save you time and money for establishing the connection between separate products and provide better cooperation between these modules. Let’s see what those additional functions are and what they can help you with.
Direct booking (booking engine and website) — With OTAs charging up to 30 percent commission, it’s critical for hotels to encourage direct bookings. This isn’t possible without a modern, mobile-optimized booking engine integrated with the hotel’s website. A good online booking system gives an advantage over competitors as many small hotels still lack online booking capability, and thus, can’t use their website’s full potential. Some providers offer website white labels. They are pre-integrated with a booking engine and have all content management capabilities ready. The only thing a hotelier should do is customize the look to match brand identity.
Today, 90 percent of travelers expect a personalized experience when they plan their trips. So besides displaying the ARI information and processing reservations, a booking engine has to provide personalization options like sending special requests, scheduling an airport transfer, pre-stocking room with preferred amenities, or a “choose your own room” feature as in Hilton hotels.
Online payments — today, a lot of customers still prefer to pay at the front desk on arrival to the hotel, even if they booked the accommodation online (i.e., through an OTA). Since the share of online payments keeps increasing, providing your guests with a secure payment option is essential. Normally, it comes as one of the booking engine’s features, but it’s still necessary to research deeper and decide on the payment gateway type and provider to work with.
Supporting multi-language and multi-currency — to attract visitors from abroad, it’s important to offer translated versions of the interface and automatically convert rates to different currencies. NB: 53 percent of people said that they get frustrated when they see a price in a currency other than their own when looking for a hotel.
Mobile app — today, over 50 percent of the total online traffic comes from mobile devices. Studies show that two-thirds of millennials plan their trip on mobile devices, 64 percent booked a hotel from a smartphone, and 23 percent have checked in using a mobile device.
Compared to websites, applications are usually more user friendly and suggest a variety of features for customer convenience, not mentioning building brand awareness. For instance, the apps of big chains such as Hilton or Marriott allow their guests to find nearby hotels, create and manage their reservations, check in and check out on their own, receive special offers, find attractions or restaurants in the area, use smartphones as digital keys, get driving directions, find friends nearby, and even have a virtual tour of the property. And still, research shows that in general, hotels are far from satisfying their guests’ needs, offering only 3 out of 24 expected mobile functions, so the need for further development is obvious.
Channel manager — if it comes together with the CRS, it’s nothing but convenient. As we already mentioned, this tool allows you to manage your distribution across various online platforms. More about different channels is in the next section.
Additional features that overlap with other systems in a PMS
A lot of providers now offer the all-in-one products that include a broad variety of built-in capabilities, typically characteristic of other solutions, i.e., customer relationship management (CRM), a revenue management system (RMS), or customer support. Here are some of those related additional features.
Rate management — it allows for creating dynamic pricing rules, rate plans and restrictions, set up season or weekend prices, assigning different rates for different channels, generating geo-targeted promotions, and more. You can have your rates changed automatically depending on market demand or your hotel occupancy, or it can set up special discounts for such categories as senior citizens, military personnel, war widows, etc. to encourage additional bookings.
Profiles management (CRM) — collecting customer data is crucial for providing a personalized experience and increasing customer satisfaction and loyalty. So, all the information such as contact details, payment preferences, past stay experiences, membership status, special rates, etc., has to be stored for future reference and providing customized offers. There can be different categories of guest profiles, i.e., individual, group, corporate, and more. If you already have a CRM, check whether it can be integrated with the reservation system in question or consider migrating to a new one that includes a CRS.
Data collection and reporting — you can maintain control of all the reservation-related processes with the help of the reporting feature. Keep track of expected arrivals, total booking activity, occupancy, revenue, and more. All the statistics data can then be turned into the basis for further analysis and forecasting. Check out our dedicated article about hotel data management for more details.
Customer support — research shows that almost 70 percent of people are inclined to spend more money with a company that provides great customer service and about 97 percent will share with others if they had an excellent customer service experience. Obviously, providing your guests with an opportunity to contact you 24/7 with any issue or inquiry and receive professional assistance is vital.
Today, chatbots and AI solutions have become extremely popular as they can answer up to 80 percent of simple routine questions. They also speed up response time, reduce the need for staff to handle customer queries, and help save up to 30 percent of customer support cost. A great example of how this technology is developing is Japanese hotelier Fujita Kanko’s multilingual chatbot that provides personalized 24/7 assistance in various languages.
Even though nowadays the emphasis on direct booking is growing, using different distribution channels is vital. Connecting your CRS with various platforms makes your property visible and accessible to thousands of travelers and travel agents, thus attracting more guests and increasing your revenue.
Fuel Travel research shows that almost 44 percent of leisure travelers start their search for accomodations with an internet search provider such as Google, Yahoo, or Bing, and more than 18 percent — on an OTA website (Booking.com, Expedia.com, or others). Another 30 percent go to review providers, vacation rental websites, deal sites, social media, or use other online sources which adds up to almost 92 percent of people searching for hotel information online!
When choosing a CRS, you might want to consider different integration options and choose the distribution channels that suit your hotel best and can be most profitable.
GDS for corporate travel
Many companies prefer to use global distribution systems, or GDSs, to organize their corporate travel as it lets travelers book flights, accommodation, and other activities in one system. If your hotel is located in the downtown or business area and there is a lot of business travel going on, it can be a great option for you to increase your bookings. Besides, thousands of OTAs and travel agents work with the GDS database.
A lot of CRS providers have a channel manager as part of the solution and offer direct connectivity with major GDSs. They enable a single point of entry so that you don’t have to sign up for each one individually. As for pricing, you have to pay a small initial setup fee to sign up, and then you pay transaction fees for confirmed bookings.
Once your hotel system has integration with a GDS, the process is fairly simple. Live rates and inventories are sent directly to a GDS from the hotel’s CRS. Travel agents and booking websites can then request this data and make reservations. When a new booking is made, the information is immediately passed back to the CRS to update availability across other channels.
OTAs as the main distribution channel
Online travel agencies, or OTAs, spend a large share of their revenue on marketing, thus having a significantly higher customer reach. Besides, they provide a variety of options to choose from and an easy way to compare prices. Therefore, even though OTAs charge frustrating commissions, it’s almost impossible to increase your bookings without integrating with at least major ones — and then encourage customers to book directly in the future.
Most providers offer integration with numerous OTAs. It is not common though that a CRS connects directly to OTAs. Normally, it’s done through a channel manager (actually, Booking.com doesn’t even accept direct connections; it’s only possible via a channel manager) that lets you integrate with a number of OTAs and sync your inventory properly.
The procedure is similar to the previous one and involves establishing a two-way integration. After sending in your hotel’s information and agreeing on the commission rate, your hotel’s description and inventory are listed on the OTA’s website, allowing visitors to check your rates, pictures, reviews, and other information, and make reservations. The details are then sent to your CRS, changing availability throughout the channels.
Metasearch as the biggest search starter
Connecting to metasearch engines is another way to generate traffic, as the role of, say, Google and Tripadvisor in today’s travel research process can’t be overstated. These sites don’t allow for making reservations, but similar to OTAs they use your hotel’s information to present a consolidated offer, letting customers choose between options. Afterwards, they redirect visitors to your hotel’s website to complete the booking. You only pay for advertising, saving on OTA commission. To make maximum profit from this channel, you have to have a strong marketing and advertising strategy, an attractive profile, and a well-designed website with a convenient booking engine.
A lot of CRS providers have a metasearch management tool integrated that pulls rates and availability information from the booking engine and displays it on different metasearch websites. It can process numerous inquiries from those sites.
Every metasearch engine has its own procedure for connection. For example, to be listed on Kayak, you can either connect via your booking engine, or have your property on one of the OTA websites they work with (though in this case, the booking will be done through an OTA with the corresponding commission). Tripadvisor gives instructions for hotels to set up the API connection and enable booking, and Google offers the Hotel Ads option with a set of guidelines to get listed, unless, again, your CRS provider doesn’t offer those integrations.
Wholesalers to contract allotments
Wholesalers, or bed banks, are intermediaries that buy rooms in bulk at a discounted price and then resell them to travel providers such as travel agents, tour operators, or OTAs. That generates volume and guarantees occupancy. Wholesalers either sign 1-year contracts directly with hotels with a net rate, or they contract a so-called best available rate that can be adjusted through a channel manager. In many cases, wholesalers contract allotments, or blocks of rooms that are pre-negotiated and bought out, i.e., for a season or specific dates.
Bed banks can be a good channel to increase distribution. However, before choosing who to partner with, it’s important to consider the discounts you are ready to offer. Other issues include possible discrepancy in the services offered, limited control over end price, and rate parity violations.
Social media to reach customers where they spend most of their time
Today, social media sites are growing in importance. Here are some previously unimaginable 2020 stats: More than half of the world’s population is using social media, spending an average of 2 hours 24 minutes per day, which would total 6 years 8 months per life! No wonder social media became a powerful marketing tool and can’t be neglected when it comes to advertising. People spend more time on social media than anywhere else online. So, if you want to increase bookings, you have to reach your customers right where they are. NB: 51.4 percent of travelers under the age of 35 visited the hotel’s Facebook page before booking.
Booking engine on the hotel’s website for direct bookings
However, relying only on indirect distribution channels would be a huge mistake, as an overwhelming 86.7 percent of travelers visit the hotel’s own website before booking. Thus, it is crucial to develop and maintain an attractive website to present the best of your property and have a booking engine to make the booking process simple and convenient for users, if they decide to book directly with you.
Hotel reservation software providers overview
Not all hotels need or can maintain a full-fledged property management software. Small properties might only need booking functionality. In other cases, the hotel might already have some management solutions but lack specific capabilities like integration with various distribution channels or a rate management module. Let’s take a look at some of the popular providers that offer stand-alone solutions with core reservation functionality.
Pegasus became a 2020 winner as the best reservation software according to the Hotel Tech Report. While prioritizing direct bookings from the website, this cloud-based software offers full connectivity to all major distribution channels. It provides seamless integration with different channel managers, intelligent rate tools, flexible APIs, and great technical support.
SynXis CRS by Sabre is one of the oldest solutions on the market and one of the most popular among big hotel brands. It’s designed for scale, so best suits mid-to-large hotels owning multiple international properties. This CRS has a revenue management feature, an integrated channel manager, and offers easy packaging creation. It also provides all the necessary integration options.
TravelClick’s iHotelier CRS by Amadeus is another web-based solution that connects to multiple distribution channels, boasts a broad range of reporting options to provide maximum visibility, and offers a variety of business intelligence tools.
Windsurfer CRS by SHR, besides the usual integration options, offers a powerful online booking engine with a shopping-cart style booking process. It also has an enhanced rate management feature to optimize revenue strategy.
Cloudbeds or eZee reservation solutions can be recommended for smaller hotels, motels, resorts, vacation rentals, or B&Bs. Both providers offer a comprehensive PMS or a separate booking engine. Having all the essential features, they are easier to use and maintain and also cheaper as the pricing is based on the number of rooms you have and modules you use.
The world is changing rapidly and the travel industry is no exception. The latest statistics show that using new technology in hospitality increases online revenue by 135 percent and reduces guest complaints by 71 percent. At the same time, 81 percent of travelers expect greater digital customer service from hotel brands.
To keep up and succeed in a hyper-competitive environment, hotels have to invest in technology that lets them effectively manage, control, and improve their business. In order to choose the right CRS, the one that would best serve your needs, you, as a hotelier, have to compare the following important factors:
- functionality to cover all the reservation-related processes in your hotel and customization options,
- scalability for future growth and development,
- integrations provided — both with other software and various distribution channels,
- time necessary to implement the software and train staff,
- price, including possible customizations, and
- customer service of the solution provider.
Implementing the CRS software will give you the advantage of working with a broader range of distributors, adjusting rates according to market conditions, streamlining all the booking processes, and providing excellent customer service.
Originally published at AltexSoft tech blog “Central Reservation System for Hotels: CRS Functionality and Software Explained”