Booking Upgrades Go For Up-Sell

A la carte package bookings enhance hotel Web sites, revenue streams.

By Adam Kirby, Associate Editor -- Hotels, 7/1/2007

Though it is not yet the dominant means of booking a hotel reservation, the Internet continues making inroads, lodging some 39% percent of all bookings made through the central reservation systems of major brands last year, according to a TravelClick study. That figure is a 20% rise over 2005. Growth in the European sector is even greater, up 31% year over year, though market share stands at just 15%, according to Denmark’s Centre for Regional and Tourism Research. Nonetheless, the trend is obvious and shows no signs of reversing. Younger travelers in particular not only prefer online booking, but they have come to expect it.

By now, the vast majority of hoteliers offer the option of booking online, but relatively few allow merchandizing add-ons without talking separately to a salesperson. As hoteliers strive to regain for their own Web sites a greater share of the booking commissions nowadays being claimed by the third-party intermediary sites, giving customers the greatest possible latitude to customize their visits becomes paramount. Common sense says a traveler is more likely to book on a hotel’s homepage if, like the Expedias of the world, the site is a one-stop shop not just for rooms but also airfare and ground transportation. It is that next step in the process, though, where hoteliers really stand to make online inroads—the merchandizing up-sell.

Hotels, especially those in the upper segments of the market, have so much to offer beyond rooms—golf, spa treatments, fine dining—and yet few companies allow guests to reserve tee times, massages or dinner reservations while booking a guestroom online. Do not put it to chance that the guest will order a bottle of champagne after arriving at the property—get that extra booked before the trip even starts. 

Omni Hotels has been searching for months for a new reservation system that meets the company’s needs—scalability, the ability to offer multiple rates over a single stay, and, of course, dynamic packaging. “We are at a point where we have just pushed that thing to the brink,” says Brad Anderson, the company’s director of revenue management, referring to Omni’s outdated DOS-based reservations system. “With the advances that have been made in the hotel industry and all the different things we want to do in terms of special packages, we have really pushed it to the limit.” Two leaders in the global distribution systems sector, TravelClick and Pegasus Solutions, are rolling out applications they believe address the concerns of Anderson and his revenue management colleagues, particularly in the area of online merchandizing up-sell.

Pegasus Offers Next-Generation App
 In April, Dallas-based Pegaus purchased hotel software company GuestClick, which had been working quietly for several years on a next-generation central reservation system. Pegasus engineers were giddy when they saw its extensive Web services and open architecture of the program, which will hit the market over the next 12 months as RezView NG, says Pegasus Chief Operating Officer Mike Kistner. After its scheduled unveiling at HITEC, Pegasus plans to begin migrating its clients to RezView NG later this year, and will offer it to new customers beginning in 2008.

The fully Web-enabled platform is scalable and offers the best of RezView’s existing capabilities while allowing hoteliers to add a virtually limitless array of additional sales opportunities to the booking engine, including the capability of airline tie-ins. “In many cases, there is potentially minimal value in doing that, but hotels have substantial interest in adding other internal add-ons,” says Tim Unwin, vice president of product strategy for Pegasus. “It is all down to the idea of the one-stop shop.”

Hoteliers at both the property level and the corporate office will have the ability with RezView NG to directly adjust inventory, prices and special package deals. “If they want to create the information and a timetable whereby they are going to have a promotional offer, and they want to have it ready to go but not necessarily published until a specific date, they can set all that up ahead of time, and away it goes when that date rolls around,” Unwin says. The technology even has the capability to automatically translate the Web page into several languages.

iStay Provides Customization
TravelClick’s iStay booking engine, the newest version of which has been on the market since last fall, likewise offers hoteliers the ability to generate that all-important up-sell. Besides giving guests the chance to tack on amenities like Internet access or pre-paid meal plans, off-site promotions like theater tickets give hoteliers the chance to grab commission revenues, making up for some of that revenue lost to third-party sites that do the same. Plus, it saves time for the guest, which increases the likelihood of return visits.

iStay also allows for easily customizable room package deals, and its guestroom selection feature lets guests see 360-degree images of each room type available. “What is done on the Web site, in terms of creating an exciting visual experience, carries all the way through the booking process,” says Mike Montemurro, TravelClick’s senior vice president for product management. “It is up to the hotel to get as creative as they want.”

The next big project for TravelClick has been creating a dashboard-style tool for computer desktops that simplifies the task of channel and rate management, collecting and displaying information on inventory allotments, pricing and market opportunities from across the industry and the various booking sites. The newly released product, called Search View, also aggregates Web 2.0 feedback, saving time otherwise spent scouring the Internet for news about a property, and it ranks keyword searches to help optimize organic search placement.

Group Bookings The Next Frontier
One glaring area where hotel Web sites have not yet caught up with consumer demand is in events planning and group bookings. Many hoteliers allow planners to submit requests for proposals via the Web, but in most cases, that requires some degree of interaction with the sales office—and, as previously discussed, that paradigm is becoming increasingly unacceptable to customers in today’s immediate-response, do-it-yourself world.

In lieu of effective technology to do otherwise, hotel companies remain largely committed to the request-for-proposal format when it comes to online group bookings, at least for the foreseeable future. Tabatha Kidder, corporate director of revenue for St. Paul, Minnesota-based management company Morrissey Hospitality, would love to be able to offer event planners instant rate quotes online. However, the technology remains out of reach. “The industry is kind of in its infancy with that. It is a challenge,” Kidder says. “There is so much involved in trying to judge, ‘Yes, we have enough space for your event, and yes, we can give it to you.’” In bookings involving properties with limited event facilities, it makes sense to have the sale conducted by an actual person who understands the real-life logistics, Kidder says. “Every property is unique, and for some, the technology could easily assess the offerings. But for smaller properties, it would be hard.” 

As people become more and more accustomed to sidestepping voice bookings, however, it is only a matter of time before event planners begin to demand instantaneous inventory responses. And just as important from a hotelier’s standpoint is that online booking is markedly more profitable than traditional booking methods, like voice. Not only do hotel Web sites not receive paychecks, they do not make potentially costly human errors. 

 At the head of the online group bookings line is Passkey International, whose namesake booking engine is employed by more than 6,000 hotels. The Web-based system delivers bookings directly to a hotel’s property management system or customer reservation system, allowing large numbers of conference attendees, for example, to individually book online using the special event rate and block of rooms. The reservations concurrently tie in with the event planners’ system, making things easier on their end, too. While a powerful tool, Passkey nevertheless only addresses the second half of the online group bookings conundrum, of course —the crucial difficulty, to which Kidder alludes, is reserving the rooms block and the event facilities in the first place. 

Now that the merchandizing up-sell arena seems to be coming into focus, thanks to the new TravelClick and Pegasus offerings, true online events planning could be the next great frontier for the hotel booking sector. With the HITEC unveiling of Newmarket International’s new DirectBook system, it may finally be here. Though catered more toward small one-day meetings than larger conferences, the Delphi-compatible software allows authorized event planners to scan available meeting space for a given date, and then reserve it. The Seaport Hotel & World Trade Center Boston in June became one of the first properties to offer the DirectBook service on its Web site. “We are going to move into this slowly, but we are excited about it,” says Patrick Barfield, the hotel’s director of e-commerce. “People are more and more expecting to do events booking online, and it frees up our sales people up to do other pieces of business, too.”

Truly automated group booking technology like DirectBook cannot arrive soon enough for Anwen Parry, director of e-commerce for London-based Rocco Forte Hotels. She figures the technology is about two years away from being functional and reliable. “It has a long way to go, but it is absolutely crucial,” Parry says. “Before the days of the Internet, when you had to request a hotel booking and you had to go back and forth, it slowed down the whole process. So, the sooner you can automate this, the group bookings sector will be so much bigger. It could really take hotel revenue to a much higher level.”