Mr. Kistner

Reservations / Online Pricing / Booking Engines

Booking Process Analysis: Do you Know Where Your Bookings Are?

By Mike Kistner, President, Chief Executive Officer & Chairman of the Board, Pegasus Solutions

I recently presented the “Q&A Worth Distributing” session at HEDNA’s Winter Conference with John Burns, president of Hospitality Technology Consulting. In a single discussion about distribution, we not only agreed that the voice reservations channel was not dead, but also laughed that there may be an opportunity to sell rooms for mobile through iTunes since the payment mechanism already exists.

Simultaneously, we’re seeing reports of consumers fleeing the online booking process for the security of their travel agent, while monthly data from Pegasus shows revenue through the leisure channel setting records from growth over 2009.

In this schizophrenic booking environment, it’s more important than ever to analyze your booking process to understand where your reservations are coming from, and where opportunities to generate more business exist.

Give Voice a Voice

In 2009, various industry reports stated voice reservations were the source of anywhere from 22% to 33% of business for major hotel brands. Additionally, a June 2010 PhoCusWright report cited the “need for personal service” as the number one reason for travelers to book leisure travel offline. While emerging channels like mobile often capture the headlines and our imagination, we can’t forget those that built our industry and remain the go-to for a sizable buying audience.

Bookings coming through the voice channel should account for the geographic markets targeted and served by a hotel, and should place a premium on customer service to put the discerning voice caller at ease. Content for voice, such as correct phone numbers, should be consistent and available 24-7 with the capability to manage overflow. Additionally, the voice channel, which allows use of traditional sales tactics through personal connection, can be integrated with the hotel site through use of “Push to Talk” icons to allow site browsers wanting that “personal service” to speak with a live reservation agent.

Own the Brand Site

Your website design and online booking process is the experience you sell at your virtual doorstep. Today’s traveler is savvy, shopping more extensively and deeper than ever before. They peruse meta-search sites, online guest reviews, Tweets, Facebook fan pages, and, most importantly, your website before booking, which they’re still not guaranteed to do on your site. And, even if they’re not booking through your site, they’re still visiting it during the shopping process and the trip “sharing” process, especially through social media.

The question becomes how your brand, i.e. your site, is going to intelligently capture online shoppers, and provide value beyond third-party sites. Forrester Research has found that many online sites fail to simplify an increasingly complicated travel process, or to meet a guest’s specific needs.

Site design should create and share an experience online, simply, similar to one a guest would receive at the hotel that screams, “we give you personal service” throughout the booking process. We recently worked with Thompson Hotels to do just this by offering guests one click to rates using Pegasus Solutions’ NetBooker NG Internet booking engine. This tool allows the hotel to maintain control of the brand ethos throughout the booking process, keeping the entire transaction on their site and selling according to their standards.

Friend the GDS

A few years ago, I sat in a room while a leading hospitality CEO prophesied that the “travel agent is dead.” Six years later, USA Today published an article last November stating that “for some travelers, do-it-yourself booking is losing its luster.”

While the numbers for the traditionally corporate GDS booking audience comprised of travel agencies, corporate travel departments, travel management companies (TMCs) and consortia have dwindled, the channel remains the sweet spot for hotels. And, research from Forrester shows nearly a third of leisure travelers who booked their trips online in Q1 2010 would be interested in going to a travel agent instead. My guess is that the whole “personal service” factor may be to blame.

The obvious and most important tactic for a hotel is to ensure they are distributed through the global distribution systems (GDS) with fresh and accurate content. According to The Pegasus View, the GDS channel had a record increase of +30.6% over 2009 in late 2010, a rate that is expected to continue through March 2011, at least. Further, hotels can optimize third-party hotel marketing companies like Utell to leverage business-generating relationships with travel agencies, TMCs, online distributors, corporations and consortia groups to cultivate this important booking channel.

Add the ADS

That same USA Today article stated that online booking of leisure travel in the U.S. is projected to rise from $80 billion in 2010 to $86.6 billion in 2011, and to $110.7 billion by 2014. PhoCusWright projects online travel agencies (OTAs) will grow at twice the rate of hotel websites in 2010. Our data shows record increases in revenue for the mostly leisure online channel, and average daily rates climbing out of their recession slump.

While both visible and potentially lucrative, the alternative distribution systems (ADS) channel comes with its own tangle of distribution points and an 800-pound gorilla known as the look-to-book ratio. Today’s average look-to-book ratio, which has been inflated with the advent of online shopping, stands at 3,000 to 1. This means your hotel is “looked” at 3,000 times by OTAs and consumers for every one booking made, which poses a challenge to hotels struggling to compete in the online space.

Earlier this year, we gathered several existing customers for our inaugural Next Generation Shopping Summit where both suppliers and distributors articulated a need to better merchandise the hotel experience through these crowded online channels. The result was ShoppingNG to help hotels shoulder the huge responsibility of maintaining rates, availability and descriptive content characteristic of the ADS channel. From error reporting to understand where your booking process is falling down, to cache enhancements to manage shopping requests, hotels can ensure they are available and bookable for the bargain-hunting buying audience this channel reaches.

Move with Mobile

And finally, there’s mobile, the hottest channel of all. A May 2010 Deloitte survey showed ten percent of respondents had used a hotel application on a Web-enabled smart phone to book a room, access a loyalty program account, view/modify/cancel a reservation, pay a bill, check-in or check-out. However until now, many hotels have been trying to take the PC Web experience and take minimal measures to simplify it for mobile.

There’s a lot of “me too” mobile introductions in the hotel space, however, consumers need a compelling reason to install your mobile app on their handheld device. The branding of your hotel site plays into mobile shopping, but it is the ease of booking offered with mobile that gives consumers the confidence to actually book. Because the browsing experience in the mobile world is difficult, rich content needs to be simplified and presented in accessible and viewable formats (not tailored only to iPhones). For example, Warwick International Hotels recently added mobile booking through www.warwickhotels.mobi by leveraging a next generation booking engine that enables the site to offer the same options offered through the brand’s traditional site at www.warwickhotels.com. The mobile site offers 27 of Warwick’s distinctive hotels and resorts worldwide for booking with any mobile device, not just the iPhone. Hotels moving to mobile also need to adopt reliable and accepted payment technology, which we discussed at HEDNA as the electronic wallet.

And that brings us back to iTunes. In the two decades we’ve been operating the switch, which revolutionized connectivity to the GDS, we’ve seen three new booking channels rise to prominence – ADS, the brand site and mobile – with social media quickly gaining ground. While each has gained acceptance, it has failed to eliminate those that “came before”, requiring hotels to remain invested in both the legacy channels and the new opportunities. With careful analysis and planning, hotels can understand where their reservations are coming from, and capture opportunities across the spectrum to generate more business.

Mike Kistner is Chairman, President and Chief Executive of Pegasus Solutions. He joined Pegasus from Best Western, where he was CIO and SVP of distribution. Mr. Kistner holds a BS from Northern State University, Aberdeen, S.D., and a MS in Information Systems from Colorado State University. He is the past Chairman and current member of the e-commerce committee of the AH&LA. From 2000 to 2005, he served as Chairman of the Open Travel Alliance (OTA) and has been recognized as one of the leading CIOs in the hospitality industry. Mr. Kistner can be contacted at 480-624-6450 or mike.kistner@pegs.com Extended Bio...

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