LESSON 2.

1-1

Learning Objective

After reading this INFORMATION SHEET, YOU MUST be able to access

reservation system information.

RESERVATION SYSTEM INFORMATION

Introduction
Hotel owners have traditionally been very practical in the approach of
running hotels. They believe that people make guest experience and their
efficiency and effectiveness makes the difference in these times of fierce
competition. Many medium and small properties still cling onto manual
systems of operation for several reasons:
1. Cost of technology is prohibitive. Revenue do not justify their inclusion.
2. Labor cost are cheaper than technology costs in their country and
location.
3. Non-availability of knowledge workers in their locale.
4. Owners prefer to keep information confidential. They believe that they
have the privilege to information to maintain their authority on
operations. This philosophy goes against the worlwide movement
towards transparency.
5. Owners fear that competition will gain access to hotel information.
6. Belief that people and not technology makes the difference.
Guest visiting smaller hotels may also not expect certain standards of
technology because of low rates of room offered. Resort properties in forest,
remote beaches and deltas may also be excused from technology because
guests come from far and in between. However, other hotels have been caught
in the whirl wind of technology advancement that makes them more
competitive. Let us look at some reasons why hotel owners opt for technology.
1. Market segments that they cater to, expect it.
2. Revenues justify technology costs.
3. Revenues can be increased by having better technological facilities.
 4. Technology replaces several layers of supervision.
5. Technology reduces human error.
6. Competition already has it.
7. Improves efficiency.
8. Speeds up transactions.
9. Guests are in control of their stay by accessing information.
10. Introducing transparency in operations as a way of life.
11. Older equipments are obsolete and unavailable.

E-Commerce
A significant development with the development of computerized systems
is the concept of e-commerce (electronic commerce) in the way hotels advance
room reservations. We have already seen how distribution systems like the
central reservation system, regional reservation systems, global distribution
systems, intersell agencies and websites have impact on the reservation
process. They have brought the world to the doorstep of the hotel. The e-
commerce is a new way of doing business. Let us examine how it influences
the way reservations are done:
The first step in the process is for a hotel to open an e-commerce site.
This site can be part of the hotel’s website with a click of a button. What e-
commerce does is to make rooms available to the travel market at discounted
prices either year long or during a season so that they can ‘buy’ rooms in bulk.
There are several ways that people buy rooms.
Retailers are small time players like travel agents who have the capacity
to negotiate for rooms from 10 to 25 rooms. The rooms purchased are in their
inventory bank as a special facility that they can offer to their clients the year
round. For the retailer to get this discounted facility, he will have to guarantee
the hotel a minimum number of room nights throughout the year.
Wholesalers, on the other hand, purchase rooms at discounted prices
for bulk rooms ranging from 50 to 100 rooms. They are those who organize
tour groups, conference packages, or any mass group movement. Again, they
will have to guarantee the hotel a minimum number of room nights, which
obviously higher number than a retailer. Wholesalers like to purchase rooms
in advance to have the flexibility of rooms whenever they launch a group
package as also to take advantage of discounted prices to make their package
competitive. We often see tour programs at attractive rates to a destination
that brings about a frenzy of bookings for that package. This is because the
tour operator has purchased rooms at reasonable rates to offer such attractive
packages.
Auctions are another way to sell rooms. This method employed by lower
rated hotels and some remote resorts. In this situation hotels do not announce
their name but give certain parameters like star rating, facilities etc. The
concept is to ‘sell’ rooms as a commodity to the highest bidder. Once the
purchase is completed the hotel identity is known and the auctioneer will
either sell the rooms to travel agents and group operators or to reservation
companies. Naturally the auctioneer will take a mark-up on the rooms passed
on to other vendors.
In other occasions, hotel announces their names and is subject to
inspection by auctioneers to determine whether they wish to bid. Some
examples of such site are Expedia (www.expedia.com); Hotels.com
(www.hotels.com); Site 59 (www.site59.com); and Travelocity
(www.travelocity.com). With the supply of rooms available, promoters can now
package their offers. Some event planners can even further build packages
around the room availability with meal options called “dynamic packaging”,
banquet space or conference equipment.
A great stride in e-commerce in the future when hotel websites offer a
menu of room and ancillary options from which a guest can mix and match to
create his or her stay options. The menu will include:
• Type of rooms
• Range of room prices
• Meal plans
• Choice of menus
• Health club membership
• Business center usage
• Meeting space option
• City tours
• Airport pick-up
While these are some options, hotels can offer many more based on their
own flexibility in pricing. Guest can create their packages and price bundles.
This is an exciting way to empower the guest in the future.
Global Distribution System (GDS)
A distribution system is a network of providers that brings products and
services, geographically spread across the world, to the doorstep of the
consumers anywhere in the world. Below are the different GDS and how they
can serve the traveler.
Sabre Computer System
SABRE (Semi-automated Business Research Environment) is a
computerized GDS used by airlines, railways, travel agents and other travel
companies. It is a system promoted by Sabre Travel Network division of Sabre
Holdings. The system was developed to help the American Airline in 1950 to
solve a major problem of bookings by outdated manual method. The old
system used a rotating file with cards to every flight which a team of eight
operators would sort through. If a seat was booked they would place a mark
on the side of the card and knew visually whether the flight was full. The
entire process to the point of writing out a ticket took 90 minutes on an
average. The system was limited for growth as it could only take eight
operators who could not cope with additional flights. An automated system
was definitely required in the jet age and when people were more time
conscious.
Originally used only by the American Airlines, the system was expanded
to travel agents in 1976 and today connects 30,000 travel agents and 3 million
consumers with more than 400 airlines, 50 car rental companies, 35,000
hotels and dozens of railways, tour companies, ferries and cruise lines. IBM
used their successful technology to other Airlines developing the DELMATIC for
Delta Airlines and PANAMAC for Pan American World Airways.
In 2000, American Airlines made SABRE a public corporation under
Sabre Holdings. The Travelocity is owned by this company and serves as a
consumer interface to the system. Today, it has a market share of 30.8% of
global reservations. It is partnered with Abacus, a CRS which was founded by
All Nippon Airways, China Airlines and Singapore Airlines, to cover the Asian
market.
Amadeus Computer System
Amadeus, founded in 1987, has the most extensive distribution network
with most of the international bookings of the world. Amadeus was formed by
an alliance between Air France, Lufthansa, Iberian Airlines and Scandinavian
Airlines System (SAS) specializing in IT solutions to manage airlines, train,
cruise ship, rental car, and hotel and travel bookings. Through Amadeus,
67,000 travel agency locations and 10,000 airline sales offices worldwide are
able to make booking with:
• 490 airlines, representing more than 95% of the world’s scheduled
airline seats
• 70,000 hotel properties
• 45 car rental companies, serving over 29,000 locations
• Other travel providers e.g. ferry, rail, cruise liners, insurance companies
and tour operators
Amadeus has subscribers in more than 217 countries worldwide
delivering localized solutions for marketing, customer services and support
through a network of over 70 National Marketing Companies (NMC’s). It has
headquarters in Miami, Florida and Madrid, Spain. Other major offices are in
Sophia Antipolis, France and Erding, Germany. There are IT service centers in
London and Sydney. The Amadeus Global Distribution System is the world’s
largest electronic reservations system by market share, used by the entire
travel industry. Today, it has a market share of 31% of airline reservations.
Galileo Central Reservations System
The Galileo Central Reservations System is one of the main computer
reservation systems designed for the travel industry by a consortium of
airlines. It is currently owned by Travelport.
Galileo was created by a group of European airlines to replace the
existing multi-access systems that allowed a single travel agent terminal to
switch between the reservations systems of different airlines. Such systems
were used in UK, Ireland, Italy, Switzerland and Austria. The Galileo system by
contrast holds information on all airlines in a single database and allows a
single booking record to be created.
The system is not confined solely to ticket sales. Depending on the
restrictions of the airfare and the airline policies, requests can be made for
specific seats, special meals and other requests. Galileo, like other GDS, can
also be used to book hotels, car hire and even some train tickets.
In 1997, Galileo International Inc. bought the Apollo Reservation System
designed by United Airlines in 1976. In December 2006, Travel Port agreed to
buy and merge with Worldspan GDS. Due to merging delays, both systems are
currently working in parallel. It has a market share of 26.4%.
Worldspan
Worldspan is a technology company with headquarters in Atlanta,
Georgia that specializes in travel related software and systems. Its primary
system is known as Global Distribution System that is software used by travel
agents and travel related websites to book airline tickets, hotel rooms, rental
cars and associated products and services. Worldspan also developed and
maintains the Delmatic system which is used exclusively by Delta Airlines for
reservations and operations.
Worldspan was formed in early 1990 by Delta Airlines, Northwest
Airlines and Transworld Airlines to operate and sell its GDS services to travel
agencies worldwide. In mid 2003 Worldspan was sold by its owner airlines to
Citigroup Venture Capital and Ontario Teachers’ Pension Fund. In December
2006, TravelPort, owner of Galileo GDS and Orbitz agreed to buy and merge
with Worldspan. It has a market share of 15.1%.
Scandinavian Multi Access Reservations for Travel Agents (SMART)
SMART is a computerized system for ticket reservations created in 1979
by SAS, Braathens and the Swedish Railways. Before SMART, travel agents
and travel companies had their own computer reservation systems often
involving widely different codes and procedures. It was cumbersome and
expensive for a travel agency to have multiple terminals, each one connected to
a different provider. SMART solved this by providing a single interface over the
public data network Datex. It worked by having a Host Interface Processor
(HIP) at each travel company. These would translate a number of terminals,
translate message, codes and addresses, wrap them in SMART’s own
communications protocol, and provide the interface over Datex to the various
travel agencies.
On the side of travel agencies, there would be a SMART Terminal
Equipment (STE) with the reverse function, translating a server and providing
interface terminals. A travel agent could easily switch between screens for the
different companies. The STE would also allow printing of documents, tickets,
bills and interface with accounting systems. SMART was bought off by
Amadeus and is now called Amadeus Scandinavia.
List of Global Distribution Systems
• Amadeus
• IB Abacus (Asia/Pacific)
• IE Travelsky (China)
• IF Infini (Japan)
 • IG Galileo International
• IJ Axess (Japan)
• IP Worldspan
• IS Sabre
• IU ITA Software
• IV Apollo (Galileo)
• Atraxis (ex Swissair now EDS)
• Topas (Korea)
• Fantasia (South Pacific)
• NI Nextres’ Iridian Project (Scandinavia)
• SITA’s Gabriel
• Ix-Hotel (international)
• Techspan

Key Terms
Reservations The process of booking rooms
Rack Rate quote rate on a given date
Room Plan A package proposal of rooms and meals
A la carte a menu in which each individual food item is priced
Table d’ hote a menu that prices the entire meal
Tour operator wholesaler of travel programs
Tour agent retailer of travel products and services
GDS Distribution a network of providers of products and services,
System geographically spread, to the doorstep of consumers