WEEK 5

CHAPTER 5: SYSTEM-WIDE RESERVATION

1. Becomes a necessity

2. Should be easily accessible

3. Ensure efficient means of accessing, processing, and

conforming information
IMPORTANCE OF A RESERVATION SYSTEM

Rely on effective marketing principles

A reservation system is the primary means of producing
positive cash flow and a favourable income statement.

- marketing & sales

- on brand reservation system
- Toll-free number
- global distribution system (GDS)
- travel agents
- third sources, such as wholesaler- buy rooms and resell
them on the internet
OVERVIEW OF THE RESERVATION SYSTEM

Global Distribution System (GDS) in securing reservations

- distributors of hotel rooms to corporation, such as travel

agents that buy rooms in large volume

Examples: Amadeus, Galileo, SABRE and Worldspan

- improve room sales by almost 17 %; ADR = 9%

OVERVIEW OF THE RESERVATION SYSTEM, cont...

Role of the Internet in securing reservations

- Background on room rates offered via the internet

- before: obtain from brochures, phone calls, travel agents
- discounts were offered by wholesalers and
corporate clients based on their volume of
business or length of stay
- after: wholesalers advertise these rooms for free on
behalf of the hotel. Soon more other side offered
similar advertising strategy on the internet, leading to
price transparency and low room prices
OVERVIEW OF THE RESERVATION SYSTEM, cont...

Role of the Internet in securing reservations, cont...

- Effect of internet on pricing rooms

- lower rates, increased transparency, price
competition and increased revenue due to
increased booking stimulated by the lower
rates
- due to price transparency, will continue to affect the
ability of the hotels to increase room rates during low
seasons. Yet, during peak seasons, the internet may
enable hotels to increase rates more rapidly than
was possible before the internet.
OVERVIEW OF THE RESERVATION SYSTEM, cont...

Role of the Internet in securing reservations, cont...

- Consumer response to use of the internet-Third party

Website

- Expedia, Travelocity and TravelCLICK

- Financial effects of Third-party reservations

TYPES OF RESERVATION SYSTEMS

Franchisee

- Inter-hotel property referrals

Referral Member

- Reservation referral system, a worldwide organisation

that processes requests for room reservations at a
particular member hotel, is a hotel developer/owner
who has access to the national reservation system.
- Example- chain property charges 15 to 30 percents
SOURCES OF RESERVATIONS

Corporate clients

Social/military/educational/religious/fraternal (SMERF)

Meetings/incentive/conference/event (MICE)

Group travellers

Leisure travellers

Current guests
FORECASTING RESERVATIONS

The purposes of a room forecast are:

- preview the income statement

- scheduling labour

- planning for the use of facilities

- means of communication with other departments

OVERBOOKING (OCCUPANCY MANAGEMENT)

Accepting reservations for more rooms than are available by

forecasting the number of no-show reservation, stayovers,
understays, overstays, and work-ins with the goal of
attaining 100% occupancy

Occupancy management formula:

total no. Of room available

- confirmed reservation x no-show factor
- guaranteed reservation x no show factor
- predicted stayover
+ predicted understay
- predicted walk-ins
= No. of additional room reservation required
PROCESSING GUEST RESERVATIONS

Systemwide Reservation Systems

Outsourcing Reservations
Types of Reservations
- confirmed and guaranteed reservations
Reservation Codes
Cancellations
Cancellation Codes
Blocking Procedure
- blocking on the horizon and daily blocking