Most people use large online travel agency (OTA) channels to book their hotel stays. This makes hotels a slave to their systems, especially when it comes to the commission they have to pay to the OTAs. Investing in channel management software will help hotels continue to improve their rankings while saving significant amounts of money by not paying OTA commission.
The market share from global distribution systems (GDS) generated reservations are falling. Major premium channels require direct merchant level agreements with hotel owners. Estimations in the US market for premium OTA channels, including Expedia, Hotels.com, Booking.com, Priceline, Orbitz, Travelocity, and Hotwire, are more than eighty percent of all online reservations for hotels.
This means that, in order to get the best rankings and more exposure, hotel owners need to make direct contact with these channels. These channels need direct merchant agreements to get the best ranking. The regular GDS contract is not enough to get into a proper position because it does not provide listings to premium channels.
What is the point of all of this? Central reservation system (CRS) software will overcome this hurdle by offering hotel owners a direct interface to all major OTA networks. With CRS software, owners do not need a channel management interface or a GDS interface. Direct contact will be made through the CRS.
The best part about this method of contact is there are no commission charges when guests reserve through OTAs. There is no pass through fee either, just direct commission solely for the hotel. This can supply a huge savings for hotel owners. All OTA connections and promotions on these sites can be managed with the front desk property management system (PMS).
Properties that are highly dependent on the travel agency business or properties that want more exposure that is not being achieved through OTAs would do well with a CRS. A CRS has direct connections to all of the major GDS that exist in the world. This includes Sabre, Galileo, Amadeus, Pegasus, Travelport, and TravelWeb.
With a CRS, there are no third party middle men and the PMS interface charge by GDS companies is completely free. The normal fee that is paid to a PMS company is also free. This is a unique advantage hotels will be receiving with a GDS sign up. On average, this could mean almost $2000 a year in savings.
Great CRS software will offer the industry’s lowest commission structure for the GDS interface. The interface will connect hotels to thousands of travel agencies all over the world. The GDS interface is directly connected to the front desk PMS.
Some CRS software offers Opaque selling, which is beneficial for major OTAs and GDS. A CRS is an amazing interface that is developed to sell last minute inventories. The interface is tightly integrated to the yield management and can trigger logic at specific time intervals. Opaque selling is highly integrated with front desk PMS.
CRS can also offer package selling. Hotels can combine their inventories to packages which can be linked to flight booking and car rental booking. A package discount and booking control restrictions can be adjusted with the CRS. Package selling is also highly integrated with the front desk PMS.
A CRS engine should provide a two way interface, allowing both desktop and mobile reservations to be completed. The ways to reserve a room should be tightly integrated with the front desk software system to reduce booking errors due to technology malfunctions. This kind of software is perfect to sell properties through multiple sources.