A hotel reservation system is one of the most essential technology investments for modern guest accommodation businesses. Using such a system, hotels and similar properties can maximize direct bookings, which are not subject to the same commission fees associated with bookings generated via third-party online travel agencies. In this article, you will learn more about hotel reservation systems, their features, and their overall value.

Table of Contents:

What is a Hotel Reservation System?

A hotel reservation system is a software solution designed to assist hotels and similar types of guest accommodation with managing room reservations or hotel facility bookings. The defining feature is the ability for guests to book hotel rooms directly without going through a third party.

Essentially, the system allows guests to book hotels through the hotel website or other direct channels. Data is then synchronized with the hotel’s back end, allowing the fine details of the booking to be managed. Most hotel reservation systems will also automate some aspects, such as sending confirmation emails.

3 Reasons Why a Hotel Reservation System is Important

Acquiring a good hotel reservation system is important for many reasons, but three are among the most significant. You can learn more about these below:

1. No Commission to OTAs

One of the biggest reasons hotel reservation systems have emerged as a valuable part of the hospitality industry is that direct bookings are more profitable for hotels than online travel agencies (OTAs). This is because direct bookings do not require hotels to pay a commission fee.

When customers book a hotel room through an OTA, the OTA takes a percentage of the money they pay as a commission fee. This is considered a worthwhile expense for hotels because OTAs can help them increase distribution. However, hotels should always prioritize direct bookings to maximize revenue and profit.

2. Better Control Over Information and Pricing

Another reason a hotel reservation system can be so valuable to a hotel is that it provides greater control over information and pricing. Using a hotel reservation system, clear rules can be established for setting room rates, allocating discounts, and either upselling or cross-selling.

A good reservation system can also be integrated with a property management system. This combination of hotel reservation and PMS software can then help to update information across other platforms for greater consistency. It can centralize the process of setting room rates or changing hotel and room descriptions.

Additionally, the hotel can retain customer information from direct bookings rather than being obtained by a third-party OTA. This then allows hotels to deliver a greater level of personalization for each customer and allows the hotel to target customers with pre and post-arrival communications.

3. Greater Customization and Branding Potential

Using a hotel reservation system to facilitate direct bookings, hotels have greater opportunities to utilize customization tools to brand the customer journey and present their unique voice and perspective.

As a result, customers experience greater consistency, see the booking process as more professional, and become more likely to complete the process and book a hotel room. Customers who are taken to a booking engine that does not reflect the hotel website they came from may find the experience jarring and less trustworthy.

What Are the Key Features of a Good Hotel Reservation System?

While the precise features of different hotel reservation systems can vary substantially, the best solutions on the market will offer broadly similar core functionality. With this in mind, the following can be regarded as key features:

Easy Customization

A good hotel reservation system, much like high-quality PMS software, needs to be customized so that it is as relevant as possible to your hotel. This means customizing the booking process so that all options reflect the facilities and realities of your property and that it does not come across as generic.

Customers value hotels that appear professional, and customizing a reservation system is a good way to achieve an easy win in this area. In addition to modifying the booking options to be appropriate, your reservation system provides great opportunities to inject some personality through intelligent branding.

Integration With Your PMS

Aside from the independent features of a hotel reservation system, it is also important that any software you acquire can be integrated with your property management system and as many other solutions as possible. Such integration can take many forms, but the most crucial component is the ability to share data between the applications.

When software can be fully integrated, workflows can be optimized, and the two-way data flow can help avoid miscommunication. Furthermore, the sharing of data means that information related to pricing, bookings, and room availability will be kept continuously up-to-date, which can help to prevent double bookings and other costly errors.

Video: What Is a PMS?

 

Compatible With Mobile

An ever-growing number of hospitality customers are exploring their options on a mobile phone rather than a computer, and this market segment provides an exciting opportunity for hotels. After all, many customers find mobile bookings through a third-party platform frustrating or unnecessarily time-consuming.

Hotels that can provide customers with access to a quick, easy-to-use booking engine, which has been optimized for mobile devices, could benefit from more direct bookings. A hotel reservation system that allows for the creation of a fully mobile-optimized booking process can greatly boost your financial results.

Opportunities for Upselling

Another important feature of your hotel booking software is the ability to include upselling and cross-selling within the booking process. On a basic level, this can mean giving customers options to upgrade their room or add extra services, such as breakfasts or access to certain optional hotel features.

However, booking systems can go further than this, including options for entry to local attractions or places on a sightseeing tour. In some cases, hotels may also be able to work with local businesses, offering extras or special offers related to transportation or other parts of the hospitality industry, such as restaurants or entry to nightclubs.

Connected to Your CRM

One of the most significant advantages of direct bookings is the ability to collect customer information. That said, to get the most from this information and use it to improve the guest experience for your customers effectively, you need your hotel reservation system to connect with your CRM software.

Once such a connection has been established, the information shared between the two solutions can be used effectively. Building a better picture of precisely who your guests are means to deliver a more personalized guest experience, and it also means you can tailor your communication to suit their preferences too.

Maximize The Effectiveness of Your Hotel Reservation System

To maximize all the functionalities of your hotel reservation system, it is essential enough research is done into the functionalities the software offers. Many less obvious strategies can help your business in the long run

In the article “Hotel Booking System: 8 Tips to Maximize its Benefits,” you can find eight tips to ensure you use your reservation system to its full potential.

Hotel Reservation System: Tips for Attracting More Bookings

Your hotel reservation software will be connected to your main hotel website, so you must take the right steps to attract direct online bookings. This means capitalizing on search engine optimization techniques, using intelligent web design to make the website more appealing, and highlighting your USPs.

Of course, several other steps can be taken to maximize the appeal of your website. For further insights, check out the article “8 Tips To Gain More Bookings With Your Hotel Website”.

OTAs to Target Alongside Your Hotel Reservation System

To maximize reach and attract as many bookings as possible, hotels must complement a high-quality hotel reservation system with availability via online travel agents. This means finding the best OTAs to work with to achieve strategic goals, with examples including Booking.com, Expedia, and Trip Advisor.

For a breakdown of the main online travel agents to focus on and explanations about the value of OTAs and how commission fees are calculated, read “12 Online Travel Agents (OTAs) to Increase Your Hotel Bookings”.

Compliment Your Hotel Reservation System With an RMS

In addition to effectively using a hotel reservation system, you should invest in a high-quality revenue management system or RMS. Such a system can help you to track key metrics and access information about competitors. At the same time, an RMS will make intelligent, evidence-based room rate recommendations.

To learn how to maximize your revenue through a revenue management system and learn about specific plus points, look at “Revenue Management System (RMS): What Are the Advantages?”.

Add a PMS to Your Hotel Reservation System

A property management system (PMS) can be an excellent way to add to other hotel technology, such as your hotel reservation system. A good PMS can assist you with administrative tasks, performance analysis, payment processing, and other day-to-day operations. However, you need to know the features to focus on.

Learn about the value of property management and the precise features you should look for when exploring the options available in the “PMS System: What Are the Most Important Features?” article.

A hotel reservation system is one of the most important hotel software investments because it facilitates direct bookings over the Internet. When used to maximum effect, this can result in more bookings not being subject to commission fees, meaning your hotel keeps all the revenue.

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Revfine.com is a knowledge platform for the hospitality & travel industry. Professionals use our insights, strategies and actionable tips to get inspired, optimise revenue, innovate processes and improve customer experience. You can find all hotel & hospitality tips in the categories Revenue Management, Marketing & Distribution, Hotel Operations, Staffing & Career, Technology and Software.

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This article is written by:

Martijn Barten

Hi, I am Martijn Barten, founder of Revfine.com. With 20 years of experience in the hospitality industry, I specialize in optimizing revenue by combining revenue management with marketing strategies. I have successfully developed, implemented, and managed revenue management and marketing strategies for individual properties and multi-property portfolios.