Revenue Management and Reservation Systems

• Burj al Arab

Objectives • • Outline the different types of reservations and describe reservation inquiries and their distribution channels.

Gain an understanding revenue management and how forecasting is critical to the success of an operation.

What is a reservation?

• Advance booking to reserve space for a designated time.

– Restaurants – Hotels – Airline – Cruise Ships

Reservation Sales Planning Process • • • Committing rooms for the future – Months or Years in Advance – Foundation of Revenue Management Guest Mix – Group Guest – Transient Guest Group Allocation – Rooms allocated for group use

Group Reservations • • • Group Block – Rooms set aside for a group Booked – Blocked rooms that are reserved Cut-Off Date – Unreserved rooms released at predetermined date

Hotel Statistics • • Occupancy % Average Daily Rate

Forecasting • What is Forecasting?

– An approach to determine what the future holds.

Forecasting Room Availability • Why Forecast?

– Foundation for making Pricing Decisions – Departmental Scheduling

Forecasting Data • Forecasting relies on historical data – Takes the guesswork out of forecasting

Revenue Management • • • Techniques used to determine whether prices should be raised or lowered.

Determines whether a reservation should be accepted or rejected.

Supply and Demand – Raise rates when demand exceeds supply – Lower rates when supply exceeds demand

Elements of Revenue Management

• • • • • Group Room Sales Transient Room Sales Food & Beverage Activity Local and Area Wide conventions Special Events

High Demand Tactics

• • • • Close or restrict discounts Apply minimum length of stay restrictions carefully Reduce group room allocations Raise rates to be consistent with competitors

Low Demand Tactics • • • • • • • • Sell value and benefits Offer packages Keep discount categories open Encourage upgrades Offer stay-sensitive price incentives Remove stay restrictions Involve your staff Lower rates

Types Of Reservation Systems • • • • Property-Level Reservation Systems Central Reservations Systems (CRS) Global Distribution Systems (GDS) Internet Distribution Systems (IDS)

Property Level Reservation Systems

• • Reservations module of the Property Management System (PMS).

Designed for individual properties

Central Reservations Systems (CRS)

• • A reservations system in which each participating property is represented in a computer system database.

Two types of CRS – Affiliate Reservation System • • Chain Properties – Non-Affiliate Reservation System Independent Properties

Sheraton Airport Westin Providence Starwood CRS Sheraton Boston Westin Waltham

CRS Functions • • • Services are provided by the Central Reservations Office (CRO).

Rates are provided by the participating properties.

Responsibility and control of the CRS lies with managers at the property level

Global Distribution Systems (GDS)

• • Developed by the Airlines Links together: – Hotel CRS – Airline Reservation Systems – Car Rental Reservation Systems – Travel Agency Companies

GDS Systems • • • • Sabre Galileo – United Amadeus – Air France WorldSpan

Starwood CRS Choice Hotels CRS Global Distribution System GDS Marriott CRS

Internet Distribution Systems • • • • Electronic Reservations Consumer Orientated Provides a greater distribution of inventory.

Examples: – Travelocity.com

– Hotels.com

– Priceline.com

• Burj al Arab