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Chapter 3 – Reservation System

3.1 Definition
3.2 Sources of Reservations
3.3 Central Reservation Systems (CRS)
3.4 Global Distribution Systems (GDS)
3.5 Internet Distribution System (IDS)
3.6 Affiliate Reservation Systems & Non-affiliate Reservation systems
3.7 Property Level Reservation Systems
3.8 PMS Reservation


Front – Office Applications

The Front – Office area in a hotel is where the front-office staff assists arriving and departing guests. Front-office employees are very critical to a hotel’s success as they may sometimes be the only people that the guests actually see when they arrive or depart. The main function of the front-office is to make guest reservation, an essentials and complex job.

A hotel with departments that take care of various guest needs requires an arrangements by which information can be passed from one system at particular location to another at different location in hotel. To meet this purpose, a PMS has been put in place. Although the components of a PMS vary, the term is generally used to describe a set of computer programs that directly relate to front-office and back-office activities.

Computerized front-office applications consists of series of software programs (or modules) that include Hotel Reservations, Room Management, and Guest Accounting Functions. A variety of stand-alone applications may also be interfaced with PMS.


Request for room reservation may come from number of sources by a prospective guest. Commonly, the sources of reservation are as follows:

a. Personal approach:

If the guests are free individual traveller or chance guests, they may directly give their reservation to the hotel.

b. Travel agent:

Travel agent may make reservation for groups at a hotel

c. Companies:

The companies may book rooms or other services for their visitors or clients in a hotel.

d. Airlines:

Various Airlines may book a hotel for their regular crews or clients in case of cancellation of onward flights.

e. Embassies:

The embassies also provide a large business to a hotel booking for the delegations.


These organisations also book a hotel directly.

g. Government offices:

They can be a good source of income to a hotel as they conduct conference and seminars hosted by the government.


Vacation travellers, business travellers, corporate travel offices, and international visitors are all able to use the web to arrange for their own travel and accommodation needs. The variety of potential guests accessing Internet sites to place reservations has prompted travel and hospitality companies to develop simple, user-friendly reservation procedures. Large and small hotels alike have a presence on the Inter- net. One of their most important tools is the central reservation system.

Increased online interaction between hotel property management systems, central reservation systems, and electronic distribution channels decentralizes the reservation function but centralizes marketing and sales efforts in relation to the reservations process. This results in greater control of reservations handling at the property level and increased sales efforts across various distribution channels on behalf of the participating properties.

CRS Function and Services:

Fully flexible and scalable for growing business. Platform which is easier to use. Manageability of rates, availability and content or information from single point of entry.

Central reservation system is a computerized system that revolves around storage and distribution of information concerning resorts, hotels and host of lodging facilities.

Hotel CRS as a tool is used to reach the global distribution system or GDS along with internet distribution system from a single point system. Hotel managers use this tool to manage their online sales and marketing avenues. They also project their rates and availabilities which are easily viewable by the sales channel i.e. the online travel agencies team aligned with CRS.

Connectivity of hotels to GDS, online travel agents as well as mobile booking engines. Multiple distribution channels emphasized with channel manager usage.

Information is stored in Hotel CRS. Information includes room types, room rates, conditions, inventories, plan rate architecture, reservation information, graphical information in the form of video, pictures and detailed hotel information like address, phone and fax numbers and geographical code information.

Hotel CRS reporting module is very important and calls for a number of standard reports. System reports are those reports which can be run daily, weekly, monthly or yearly and sometimes on need based request. Some of the basic reports include for expected arrivals, reservation, property forecasting, property details, agent activity and daily booking activity summary.

Central reservation services are provided by the central reservation office (CRO). The CRO manages room rate and availability information from participating properties. Information from connected properties is typically sent over communication lines and enters the database directly. In a CRS network configuration, the responsibility and control of room and rate information lies at the property level. The key to successful central reservation management is that the individual properties and the central system have access to the same room and rate availability information in real time. When this is the case, the system is able to confirm room rates and availability at the time of reservation.

The timely transfer of reservation confirmations from a CRS to individual properties is vital. Many chain systems provide multiple delivery alternatives to ensure that properties receive all new reservations, modifications, or cancelations. For example, most central reservation systems relay processed transactions to member properties through online interfaces. Although online interfacing between central reservation offices and property-level systems is fast and effective, some networks may also e-mail or fax the information to properties to ensure successful completion of the reservation process.

The goals of a CRS are to improve guest service while enhancing profitability and operating efficiency. A CRS accomplishes these goals by:

  • Providing access to special room rates and promotional packages.
  • Instantly confirming reservations.
  • Communicating with major airline, travel, and car rental agencies.
  • Creating comprehensive reservation records.
Electronic Distribution Channels

Electronic distribution, or e-distribution, is the means by which hotels make their products and services available via electronic channels, including travel agents, wholesalers, consolidators, and consumers. Such channels are widely viewed as mare convenient far those constituents that have online access and are often a less expensive source of bookings than traditional channels. Electronic distribution includes the following two' major categories:

  • Global distribution systems (GDS)
  • Internet distribution systems (IDS)

Competing hotel companies may participate in the same global or Internet distribution systems. Therefore, e-distribution channels must provide a security system that protects the proprietary nature of roam and rate availability data.

Security is usually maintained through passwords, data encryption. firewalls, and other security methods. Users of a system may be issued passwords that restrict access to' proprietary data. Although passwords may need to' be changed frequently, they can offer effective measures of security.


Global distribution systems (GDSs) are often formed as joint ventures linking a number of diverse businesses. By directly linking the reservation systems of hotel, airline, car rental, and travel agency companies and a worldwide basis, global distribution systems provide access to' travel and tourism inventories around the world. A global distribution system can represent a significant portion of reservations business far many airport and resort properties.

Selling hotel rooms is usually accomplished by connecting the hotel company reservation system with the GDSs. Most travel agents around the world have terminals connected to one or more of the many airline reservation systems to book airline travel. By having hotel accommodations and automobile rentals available in the reservation system at the same time, most GDSs provide single-source access to most of the travel agent's selling requirements. In one transaction, a travel agent can sell an airline ticket, hotel room, and automobile rental.


Internet distribution systems (IDSs) are consumer-oriented reservation systems that have become one of the fastest growing e-distribution channels. In contrast to CDSs, consumers themselves typically use these systems to book airline, hotel, car, and cruise ship reservations. The wealth of information available to consumers has never been greater, and consumers expect and shop hard to find adequate accommodations online. As a consequence, the environment has become very competitive. "Name your own price" sites and last-minute Internet-based bargain notifications have provided an outlet for hotels to dispose of distressed or otherwise underutilized inventory.

Typically, lDSs are operated by independent website sponsors that implement an online hotel reservation booking engine. IDS sites can connect to a hotel property in at least three ways:

1. Connection to the hotel company's central reservation system
2. Connection to a switching company that connects to the hotel's central reservation system
3. Connection to a CDS that connects to the hotel's central reservation system
Intersell Agencies

Domestic competition for hotel reservation commissions is intense since other segments of the travel industry (consolidators, wholesalers, booking agencies, etc.) may also operate reservation systems. Airline carriers, travel agencies, car rental companies, and chain hotels offer stiff competition to independent central reservation systems entering the reservations marketplace.

The term intersell agency refers to a reservation network that handles more than one product line. Intersell agencies typically handle reservations for airline flights, car rentals, and hotel rooms. The spirit of an intersell promotion is captured by the expression "one call does it all." Although intersell agencies may channel reservation requests directly to individual hotels, some elect to communicate with central reservation systems or electronic distribution channels.

It is important to note that a local, regional, or national intersell arrangement does not preclude a hotel property from participating in a GDS or IDS or from processing reservations directly from its own website or via contact with the hotel's reservation department.

3.6 Affiliate Reservation Systems & Non-affiliate Reservation systems

There are two types of central reservation systems: affiliate (chain operated) and non-affiliate (independent) systems. An affiliate reservation system is a hotel chain's central reservation system in which all participating properties are contractually related. Each property is represented in the system database and is required to provide room availability and inventory data to the central reservation system on a timely basis. Chain hotels link their operations in order to streamline reservations processing and reduce total system costs. Typically, a central reservation system of an affiliate system performs the following functions:

• Deals directly with public access
• Advertises a website address or contact information
• Provides participating properties with network technology
• Communicates individual property room rate and availability data to e-distribution channels and non-affiliate reservation systems based on information supplied by individual properties
• Performs data entry services for remotely located or non-automated properties
• Transmits reservations and related information to individual properties quickly and cost-effectively
• Maintains statistical information on the volume of contacts, conversion rates, denial rates, and other statistics (conversion rate is the ratio of booked business to total number of inquiries; and denial rate refers to reservation requests that were turned away)
• Performs customer relations management functions for guest recognition and loyalty programs
• Maintains a property profile of statistical information about online viewers
• Manages a commission or payment exchange for reservation transaction

A non-affiliate reservation system is a subscription system linking independent properties. A hotel subscribes to the system's services and takes responsibility for updating the system with accurate room rate and availability data. Examples of non-affiliate reservation systems are Leading Hotels of the World, Preferred Hotels, and Distinguished Hotels. Non-affiliate systems generally provide the same services as affiliate systems, thus enabling independent hotel operators to gain benefits otherwise available only to chain operators. However, many non- affiliate systems process reservations solely on the basis of the availability of room types. With this method, room types are classified as either "open" or "closed." Most affiliate systems process reservations on the basis of a declining inventory of both room types and room rates. This method helps participating properties to maximize revenue potential and occupancy.

Affiliate and non-affiliate central reservation systems often provide a variety of services in addition to managing reservations processing and communications. A CRS may also serve as an inter-property communications network, an accounting transfer system, or a destination information centre. For instance, a CRS is used as an accounting transfer system when a chain hotel communicates operating data to company headquarters for processing. When a CRS communicates reports on local weather, special events, and seasonal room rates, it serves as a destination information centre.


Prospective guests will sometimes contact a property directly to make reservations. This contact may involve the property's own website (property online reservations) or it may involve a phone call or other direct communication with a person in the reservations department (property direct reservations). Online reservations booked at an individual hotel's website rely on a simple interchange operation. Interactive script at the website is used to capture reservation and guest information used in creation of a reservation record. Once the record exists, the system takes responsibility for placing the record in the reservations database. By comparison, hotel websites will have the lowest associated cost per online transaction. Unlike other online formats, property online reservations incur expenses associated only with maintaining current room rate and inventory updating at the site. There are no transactional fees or commissions paid for bookings at a property online application.

Property direct reservations involve a guest contacting the hotel's reservation department to ascertain room rate and availability information. An on-site staff member processes the reservation inquiry through the hotel's property management system (PMS) and completes the transaction locally.


Reservation System Elements and Procedures

Property-level reservation systems are designed to meet a property's particular needs. A PMS typically supports a reservation module designed to streamline reservations handling and distribution channel management. The specific needs and requirements of individual properties determine whether stand-alone reservation management software is operated separately or as a part of an overall reservation system network.

A PMS carries out a number of front- and back-office functions, including property direct reservations processing. Once the data is captured, a property level application can streamline operations by enabling the reservations module to rapidly process room requests and generate timely and accurate rooms, revenue, and forecasting reports. Electronic reservation files can be reformatted into pre-registration and registration records capable of monitoring guest cycle transactions. Interfacing an external reservation network to an in-house application provides an enhanced data handling procedure.

A PMS reservation module enables a reservationist to respond quickly and accurately to callers requesting future accommodations. This module can also connect to the CRS for seamless reservation processing. The module significantly reduces paperwork, physical filing, and other clerical procedures, providing the reservationist with more time for personal attention to callers and marketing various services the hotel offers. Stored information can be accessed quickly, and many of the procedures for processing requests, updating information, and generating confirmations are simplified.

The reservationist's initial inquiry procedures create a reservation record that initiates the hotel guest cycle. Reservation records identify guests and their needs before their arrival at the property and enable the hotel to personalize guest service and appropriately schedule needed staff and resources. In addition, reservation modules can generate a number of important reports for management's use. The following sections describe typical activities associated with the 'use of a PMS reservation module.

These activities also apply to a majority of the booking engines used in e-distribution channels. These activities include:

1. Reservation inquiry.
2. Determination of availability.
3. Creation of the reservation record.
4. Confirmation of the reservation.
5. Maintenance of the reservation record.
6. Generation of reports.
1. Reservation Inquiry.

A reservation request can be received in person; over the telephone; via postal delivery, facsimile, or e-mail; or through an interface with an external reservation distribution channel. Regardless of its origin, the reservation request is formulated into a reservation inquiry by the reservationist or automatically by the software application. This inquiry typically contains the following data:

• Date of arrival
• Type and number of rooms requested
• Number of room nights
• Room rate code (standard, special, package, etc.)
• Number of persons in party

The reservationist enters the preliminary data through a software template according to rigidly defined inquiry procedures. Simultaneous processing occurs in real time, meaning that the reservationist receives the necessary feedback horn the system in order to respond immediately to the inquiry. The real time capability of many reservation modules is designed to provide instant responses (less than three seconds) and, therefore, enables the reservationist to edit, alter, or amend the inquiry. Once the inquiry is matched with rooms availability data, the PMS can be programmed to automatically block a room, thus removing it from the room availability database.

2. Determination of Availability

Once entered, the reservation inquiry is compared to rooms availability data according to a predetermined inventory algorithm. The algorithm may be an automated formula designed to sell rooms in a specified pat- tern (by zone, floor, block, etc.). Processing a reservation request may result in one of several system-generated responses, including:

• Acceptance or rejection of the reservation request.
• Suggestions of alternative room types or rates.
• Suggestions of alternative hotel properties.
3. Creation of the Reservation Record

Once the reservation request has been processed and the room blocked, the system requires that the reservationist complete the reservation record by collecting and entering necessary data, such as:

• Guest's contact data (name, address, e-mail address, and telephone number).
• Time of arrival.
• Reservation classification (advance, confirmed, guaranteed).
• Confirmation number.
• Caller data (agency or secretary).
• Special requirements (handicapper, crib, no smoking, etc.).

A major benefit of automated processing is the streamlining of the initial inquiry and the collection of secondary reservation record data. For example, if all data were collected at the outset and the system denied the reservation request, the data collection would be an avoidable waste of time.

4. Confirmation of the Reservation.

Property management systems can automatically generate reservation confirmation notification following reservation processing. Information can be retrieved from the reservation record and placed in a template designed for mailing, mailing, or faxing. While there are many formats and styles of confirmation letters, acknowledgments within confirmation letters generally include:

• Guest's name and address.
• Date and time of arrival.
• Type, number, and rates of rooms.
• Number of nights.
• Number of persons in party.
• Reservation classification (advance, confirmed, guaranteed).
• Special services requested by the guest.
• Confirmation number.
• Request for deposit or prepayment.
• Update of original reservation (reconfirmation, modification, or cancellation).
• Cancellation policy.
• Transportation directions or options.

Reservation confirmations may be distributed immediately as part of placement of the reservation into the database. This process is often part of the system update. A system update performs many of the same functions as those performed by the night audit routine in non-automated properties. System updates are run daily to allow for report production, system file reorganization and system maintenance